Case | HBS Case Collection | December 2004 (Revised March 2007)

Cutlass Capital, L.P.

by Richard G. Hamermesh and Brian DeLacey

Abstract

David Hetz and Jon Osgood are forming a new venture capital fund in 2001 to invest in health care start-ups. Describes their fundraising activities at a time when venture capital investing has reached an all-time high. Although their background skills and experiences fall outside venture capital, they have identified a large investor and a number of smaller investors to back their small fund. They believe their fund's strategy uniquely addresses the strategic needs of large, corporate acquirers. At the same time, their approach addresses venture capital's reliance on public markets for liquidity events--which all but evaporated with the dot-com collapse of March 2000. Hetz and Osgood face challenging negotiations to close the fund. Raises the question of whether there is a need for a fund like this at the time of the case. Supports discussion of specialized versus generalized venture capital funds.

Keywords: Venture Capital; Negotiation Process; Entrepreneurship; Investment Funds; Health Care and Treatment; Business Startups; Health Industry; United States;

Citation:

Hamermesh, Richard G., and Brian DeLacey. "Cutlass Capital, L.P." Harvard Business School Case 805-075, December 2004. (Revised March 2007.)