U.S House of representatives committee on financial services
Polaris venture partners, a venture capital firm
Mission to identify and invest in exceptional entrepreneurs and operating companies with innovative ideas and the
promise to become market leaders.
Areas of information technology, life sciences, digital media, and consumer and business services.
At Polaris we build companies by actively partnering with each entrepreneur and management team to help propel their
ideas into market leading businesses. We do this by providing a small amount of capital and a large amount of operating
expertise and strategic counsel over a long period of time. While providing capital is the first order of business, it is the
least time consuming of all our activities. We also recruit and attract employees at all levels. We identify and structure
strategic partnerships. We raise additional equity to help the company make it to the next milestone. And, we're available
24/7 to support great teams, solve problems, identify opportunities, and detect "land mines."
1) Why the venture capital industry does not create systemic risk,
2) Why the government must continue to embrace entrepreneurial risk,
3) How sweeping venture capital into the originally introduced regulatory proposals would have been harmful to our
industry and economic growth, and most importantly
4) How we might work within the framework of your legislative draft to achieve transparency and oversight without
burdening our asset class.
Venture capital investment overview
The contained structure of a venture capital fund, the long term nature of our investments, and the straightforward cash
for equity model make our asset class unique.
Venture capital funds typically are organized as private limited partnerships.
Our investors, referred to as the limited partners (LPs), commit to our fund a fixed amount for a fixed term of at least 10
years, sometimes extending to 12 or more years. During that time, the venture capitalists that make investment decisions
on behalf of the fund form the general partnership (the gp), and we supply the rest of the capital for the fund from our own
The venture industry has focused on high technology areas such as information technology, life sciences, and more
recently, clean technology.
Once we have identified a promising opportunity, we vet the management team and conduct due diligence research on
the company, the market, the financial projections and other areas. For those companies that clear this investigation, we
make an investment in exchange for equity ownership in the business.
Our ultimate goal is what we refer to as an exit – which is when the company is strong enough to either go public on a