Waiting for the Payday

This year is likely to wind up as one the venture capital industry would like to forget. Investments are down. Returns are off. Cashing out comfortably—either by selling stakes to a large, wealthy acquirer, or by going public—has become much harder to do.

But the business shoulders on, sometimes with truly remarkable prospects. There are few places where this is more evident than at the nondescript Brooklyn Park home of CVRx, Inc., a medical device firm specializing in the reduction of high blood pressure. According to the National Venture Capital Association, CVRx has sponged up more venture money—$208 million in five rounds of funding since 2001—than any other Minnesota-based company. Ever.

That amount is notably more than Minnesota’s runner-up venture magnet, Xiotech Corporation, a data storage company in Eden Prairie that has pulled in $163 million in seven rounds since 1997. Nationally, CVRx ranks among the top 25 companies ever for attracting venture money.

The size of the CVRx venture rounds just keeps growing:

• $8 million in 2001
• $22.5 million in 2003
• $30 million in 2006
• $65 million in 2007
• $84 million in 2008

The venture capital subsidiary of New Jersey–headquartered med-tech giant Johnson & Johnson led the fourth round. Johnson & Johnson co-led the fifth with Baltimore-based New Enterprise Associates.

Persuading the Funders

CEO and President Nadim Yared says that CVRx was able to build up its treasure chest thanks largely to the immense need to moderate high blood pressure, or hypertension. One of the most difficult-to-treat causes of death and disability, hypertension afflicts some 65 million Americans. It can trigger strokes, heart attacks, and other serious ailments.

CVRx’s Rheos system places thin lead wires on the baroreceptors—sensors inside blood vessels that measure blood pressure—of the carotid arteries in the neck. When a patient’s blood pressure rises, the lead wires, which are connected to a small device implanted below the collarbone, transmit electrical signals through the baroreceptors to the brain. The brain interprets this as a rise in blood pressure and works to counteract it by sending signals to other parts of the body, such as the heart and kidneys, to reduce blood pressure.