Tuesday, September 16, 2008

Domain, No More

In what's become a familiar storyline over the past five years, a general partner--this time Robert More--has parted with Domain Associates.

More has joined Frazier Healthcare Ventures becoming a full partner in the Seattle-based firm's $600 million fund. More leaves Domain after eight years as general partner.

More is the third general partner to leave the venerable firm since 2004. Arthur Klausner was the first, leaving the firm shortly after it raised its $464 million fund. He went on to join Pappas Ventures, which is in the middle of raising a new fund. The following year, Olav Bergheim, another Domain general partner, left the firm to start Fjord Ventures. Both left the firm on good terms, saying their personal investment preferrences differed from Domain's.

In an industry where stability is highly valued, the departure of two general partners in two years raised some questions about the firm's succession plans, particularly as some of the firm's founding partners approached an age at which others might consider retirement. More, who first joined the firm as a Kaufmann fellow, appeared to be part of the long-term succession plans, but things played out differently.

More says his joining Frazier presented a new opportunity. "From my perspective, I'd been there for a long time," More said in an interview yesterday. "I really enjoyed the interaction with the partners. Jim Blair is someone I admire. But I think it's the right time [to move on] and I've known Frazier for some time."

More is jumping from on top-tier firm to another. But VCs rarely break from a general partnership merely to try something different. When asked why he'd leave a firm like Domain, More acknowledged that he'd had some "philosophical differences" with his former firm. He declined to give further detail, directing any additional questions to Domain. Partners Jim Blair and Brian Dovey couldn't be reached for comment.

Despite any differences, More says he leaves Domain on good terms, saying he'll likely co-invest with his former partners when possible. He'll also retain some of his board seats on Domain companies. At Frazier, More will work from the firm's Silicon Valley office, which is moving from Palo Alto to Menlo Park, investing in both biopharmaceutical and medical device companies. More has invested from Domain's San Diego area office for the past three years. He'll continue to live in the San Diego area.

Managing Partner Alan Frazier likewise says the hiring won't impact his firm's positive relationship with Domain. "We're pleased to get him and pleased this is supported by his friends at Domain," Frazier says. Frazier says the firm wasn't searching for a new partner when it began discussions with More. He said couldn't pass up the opportunity to bring aboard More, who counts among his wins Novacardia Inc., ESP Pharma Inc., Esprit Pharma Inc., Intralase Inc. and Proxima Therapeutics Inc.

To be sure, Domain will continue to be regarded as a top firm as it should be. But More's departure likely will raise questions about Domain's succession plans. Four of the firm's eight partners have been with the firm for at least two decades, including three--Blair, Jesse Treu and Chief Financial Officer Kathleen K. Schoemaker--who have been with the firm since its start in 1985. Dovey joined the firm in 1988.

In fairness, Domain's addition of new partners doesn't tend to draw as much ink as the departures, but the firm has added talent. Partner Eckard Weber, who you can read about here, joined in 2001. Partner Brian K. Halak made partner in 2006 after five years at the firm. Nicole Vitullo came aboard to manage the firm's public equity fund. She made partner in 2004.

Most recently, Dennis G. Podlesak became a partner in 2007 after founding and leading two successful portfolio companies, Cerexa Pharmaceuticals, and Peninsula Pharmaceuticals, which were sold to Forest Laboratories and Johnson & Johnson, respectively.

No word on whether Domain will be in the market for a new partner to replace More.

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