Mid-Atlantic Movement

Intersouth Partners today announced that partner Don Rainey is leaving “to join another venture capital firm.” peHUB has learned that mystery firm is Grotech Capital Partners – which is where the more interesting story seems to be.

Grotech employs a stage-agnostic investment strategy, with a focus on companies located in the Mid-Atlantic and Southeastern regions. For years, that’s included both technology and life sciences, plus a sprinkling of consumer. But not anymore.

Grotech has decided to become tech-only – going so far as to remove any mention of life sciences and consumer portfolio companies from its website. Thanks to the wonder of Internet caching, however, you can still view Grotech’s entire portfolio, circa last December. Here you go: GrotechPortfolio.pdf.

I tried asking Grotech if that meant it had sold off the positions via secondary sales, but have not yet had my messages returned. Many of its healthcare portfolio companies (or perhaps former healthcare portfolio companies) still list Grotech as an investor on their websites.

One certainty is that that the strategy shift has resulted in a change to the Grotech partnership itself. Not only is techie Don Rainey in, but the firm’s only healthcare-focused general partner – Terry Hyman – is out. Hyman had been co-head of healthcare M&A for CSFB prior to joining Grotech, and is uncertain as to his next move. He told me during a phone conversation that he may join another VC firm, but also might launch his own shop with Joel Radke, who had been a healthcare-focused principal with Grotech.

Two other related notes: (1) Grotech is currently raising up to $250 million for its seventh fund, according to a regulatory filing. (2) Rainey had been Intersouth’s only partner in the Washington, D.C. area, and the firm has not yet decided whether it will try to replace him. Rainey will retain some of his Intersouth board seats, while the rest will be filled by remaining Intersouth professionals.