Avalon’s Kinsella Says San Diego, Like Any Robust Startup Ecosystem, Needs Local VCs

Xconomy San Diego — 

My favorite journalistic description of Avalon Ventures founder Kevin Kinsella came from former San Diego Union-Tribune reporter Penni Crabtree, who wrote in 2005: “He has an exacting intelligence, a steely competitiveness, and a passion for big ideas. On the flip side, those who know him say Kinsella tends to lose interest when the grunt work begins, sometimes makes an indifferent team player and can hold a grudge when crossed or imposed upon.

” ‘Guilty,’ said Kinsella, after taking a minute to consider the list of virtues and foibles.”

That description only does partial justice, though, to Kinsella’s broader Renaissance-like interests, which includes his passion for theater—he was a principal backer for the Broadway musical Jersey Boys and related productions—collecting art, and growing cabernet grapes in Healdsburg, CA.

Kinsella tells me he also has acquired what’s known as “The Copley Library,” the office building in La Jolla that previously housed the corporate headquarters of the Copley Press, the former longtime publisher of the San Diego Union-Tribune (and other newspapers) and the former home of the Copley family’s private collection of artwork and historic documents. (Sotheby’s is currently offering the Copley collection at auction.) Kinsella says he is now overseeing some modest improvements and remodeling, and plans to move Avalon into the building this summer.

At a time when many of San Diego’s homegrown venture capital firms seem more like a setting sun, Kinsella and the firm he founded 27 years ago have been ascendant. As we have recently reported, Avalon’s investment in San Francisco-based Zynga ranks among the firm’s best investments, and Avalon is now raising its ninth venture fund, with a targeted range between $150 million and $200 million.

Kinsella specializes in funding early stage life sciences companies formed to develop promising innovations that he has often identified himself, and as Avalon’s founding partner, he’s had a direct or indirect role in funding more … Next Page »

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One response to “Avalon’s Kinsella Says San Diego, Like Any Robust Startup Ecosystem, Needs Local VCs”

  1. Good article. Confirms what we all know. Lots of good mechanics and car parts (metaphorically speaking), but no gas for the tank.

    Avalon appears to have started in bootstrap mode almost 3 decades ago with $400,000. Is this the model for seeding new local funds? I’d be interested in understanding if most of Avalon’s deals were local or if a large portion of the capital was invested outside of the San Diego area.

    Also, I hear of friction related to encroachment from outside capital coming into the San Diego market to fund our local entrepreneurs. I don’t think the friction is from external funds, but that the startups leave the San Diego area as a condition of funding (often heading to the Bay Area). Is this a real problem? If so, what can we do to become attractive as a local venue to fund businesses that don’t have to move?

    Also, is angel / venture capital as local as it used to be? …or are seed stage deals becoming more independent of geography? …or have they been that way, but not very noticeable? I know many wealthy San Diegans that apply their wealth across the country and globe, even as we often hear that “venture is local”.

    Anyway, great article, and I’m glad to see Avalon back in the market for yet another fund, even if some of the former perennial powers are dissipating.