New Beta Fund has raised $5 million to invest in New England tech and biotech startups

By Scott Kirsner, Globe Columnist

Two local angel investors, Dan Von Kohorn and Norman Meisner, are launching a new $5 million micro-VC fund that will invest in early-stage tech and biotech companies in New England. Von Kohorn, right, tells me that about half of the money for their new Beta Fund is already in the bank, with the other half available when the firm's investment partners are ready to put it to work.

"We have been talking to some companies over the past six months, with the expectation that they might be a good fit for the fund," Von Kohorn tells me, but Beta hasn't made any investments yet. That could happen before the end of 2012, he says.

A typical Beta Fund investment will be in the $100,000 to $200,000 range, with some money reserved for future rounds. "We'll aim to invest in about 15 companies with this fund," Von Kohorn says. He and Meisner will consider investments in software and IT companies; materials science; nanotech; and biotech. Biotech? Really? Von Kohorn says that he and Meisner were investors in SmartCells, one of those rare drug development companies that raised just $9 million in funding before being sold to Merck for $80 million (and as much as $420 million if it hits certain milestones). "We liked that story a lot, even if it is a bit of an outlier," Von Kohorn says.

The fund may invest alongside other angel investors or angel groups, he says, usually before venture capital firms are willing to jump in. He says that Beta's backers, or limited partners, are all individuals from the New England region, but they will be passive investors.

Von Kohorn is an organizer of New England AI, a group of artificial intelligence experts who meet regularly at Google's Cambridge offices, and also a portfolio manager of Apt Capital, a commodities-focused investment fund. He is chairman of the screening commitee of Beacon Angels, a Boston angel investment group. Meisner is a member of Beacon Angels and Launchpad Venture Group, another local angel organization, and a former sales and business development executive at Authentica, Chantry Networks, and Connected Corp.

"We're particularly excited about this region and its breadth of awesomeness across tech sectors," Von Kohorn says. Both he and Meisner operate out of Newton, but the new firm won't have an office of its own.