Harry Rein has left Canaan Partners for a position with Foundation Medical Partners, a small venture firm located just one floor below Canaan’s Rowayton, Conn. headquarters. Rein was a co-founder of Canaan in 1987, and has served as a general partner on each of the bi-coastal firm’s three general investment funds, in which he retains a carried interest.
Rein says that his decision to retire from Canaan was mostly the result of wanting to do something new. “I had been with Canaan for a long time, and there is now a new generation of partners there who are more than capable of doing a good job,” he explains. “I’m really interesting in helping to build up [Foundation Medical].”
His move should serve as a high-profile boon to Foundation Medical, which recently launched a new fund-raising effort that lists Rein as a general partner. The firm is currently investing out of a $61 million inaugural vehicle raised in 2001.
“Harry was obviously a founder here, but he was also instrumental in starting Foundation Medical, which is partially supported by The Cleveland Clinic,” says Jim Furnivall, a general partner with Canaan. “That’s where he wants to focus his time.”
Furnivall adds that Rein was not cited in any key-man provisions for Canaan’s latest fund, and that any new general partners would likely come from the firm’s existing principal ranks. He also says that Rein’s departure will not result in a decrease to Canaan’s traditional 20%-25% health-care investment allocation.
Canaan plans to name new members to most of the boards Rein sat on, although no replacements yet have been made official. Rein also may stay involved with some of his former investments, as at least five of Foundation Medical’s portfolio companies also count Canaan as an investor.
“The board seat from the Canaan investment is theirs to keep, but we’ve actually created a new seat for Harry because we want to keep his expertise,” says Don Wood, chief executive of Mansfield, Mass.-based Biolink Corp. (a Canaan, but not a Foundation Medical, portfolio company). “In the future, we’d obviously love to have Harry and Foundation as investors.”
Rein is the third of four Canaan Partners founders to either leave the firm or retire, joining James Fitzpatrick and Robert Migliorino. Eric Young remains with the firm, actively investing in communications systems and enterprise automation deals.
Prior to co-founding Canaan, Rein spent over four years as president and chief executive of GE Venture Capital Corp. He also has operating experience at Polaroid Corp. and Gulf Oil Corp., plus was the recipient of an Outstanding Service Award from the National Venture Capital Association.
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