The Vertical Group Research
Investment Thesis
The Vertical Group is a specialist venture capital firm focused exclusively on medical technology and biotechnology. Founded as the successor to the venture capital division of F. Eberstadt & Co., the firm has been an independent partnership since 1988, giving it one of the longest continuous track records in healthcare venture investing. The firm's stated thesis is that its general partners' direct, decades-long operating and investing experience inside the medical device and biotech industries (sales and marketing, R&D, regulatory affairs, transaction structuring, tax planning, and portfolio management) is the differentiated edge that lets it underwrite deals other generalist funds cannot properly diligence. The partners have personally been founders, early investors, major shareholders, and executives at many of the medtech industry's most successful companies, including American Medical Systems, SciMed Life Systems, Kyphon, Xomed Surgical Products, Wright Medical Group, and Silk Road Medical.
Sector Focus
The firm invests exclusively within medical technology and biotechnology, with the heaviest historical concentration in cardiovascular and endovascular devices, orthopedics and spine, neurosurgical and neurostimulation tools, diagnostics and lab instrumentation, and, more recently, digital health and digital therapeutics (Omada Health, Luminopia).
Stage Focus
The firm explicitly participates in "early stage angel financings, and both early and later stage venture capital financings." In practice this spans seed/angel rounds (e.g., founding investments in Incumed and BioSET) through growth-stage follow-ons in companies it has backed for years (e.g., continuing to invest alongside new lead investors in Radiaction Medical's Series C2 and MicroTransponder's Series F).
Check Size
Per the firm's own "Our Approach" page, investment size ranges from $250,000 to $5,000,000 depending on the transaction and stage, spanning angel through later-stage venture rounds.
Lead Tendency
The Vertical Group has both led and followed across its history. It has been a founding/lead investor (Incumed, Tepha spin-off from Metabolix, Kyphon, Metabolix itself, OncoMed's founding round), a change-of-control/recapitalization lead (Galil Medical, Wright Medical Group, Tornier with co-investor Warburg Pincus), an incubator (Silk Road Medical, later invested in by Warburg Pincus), and a participant/follower alongside other institutional leads (Omada Health led by USVP; Outset Medical's Series A led by Warburg Pincus; Radiaction Medical's Series C2 led by InnovaHealth Partners; MicroTransponder's Series F led by USVP).
Recent Activity
The firm's own website news feed goes quiet after October 2023, but the partners remain active as existing investors in follow-on rounds for portfolio companies: MicroTransponder closed a $65M Series F in March 2025 (existing investors The Vertical Group and Exceller Hunt Ventures, new lead USVP), and Radiaction Medical closed a $12.6M Series C2 in August 2023 led by InnovaHealth Partners. Luminopia closed an oversubscribed $16M Series A round in June 2023. Given the gap in public announcements since early/mid-2025, fund deployment pace and current fund status could not be confirmed with confidence.
Portfolio Highlights
Notable historical exits include Kyphon (acquired by Medtronic for $3.9B, 2007), ev3 (acquired by Covidien for ~$2.6B, 2010), Ventana Medical Systems (acquired by Roche for ~$3.9B, 2008), Lifecell (acquired by KCI for ~$1.8B, 2008), Masimo (public company, ~$2B market cap at time of writing on site), Xomed Surgical Products (acquired by Medtronic, ~$800M, 1999), Cardiothoracic Systems (acquired by Guidant, ~$250M, 1998), Proteolix (acquired by Onyx Pharmaceuticals for up to ~$800M, 2009), Lutonix (acquired by CR Bard, ~$300M+, 2011), and OncoMed Pharmaceuticals (IPO, July 2013, ~$83M net proceeds). Active portfolio companies span Silk Road Medical (public, NASDAQ: SILK), Outset Medical (public, NASDAQ: OM), Omada Health, ProteinSimple, Tepha, ViaCyte, TetraLogic Pharmaceuticals, MicroTransponder, Luminopia, and Radiaction Medical, among others.
Team
- Richard B. Emmitt, General Partner — 30+ years of healthcare investment experience (Cyrus J. Lawrence, F. Eberstadt); boards have included American Medical Systems, ev3, Galil Medical, Tepha, Tornier, SciMed, Wright Medical, and Xomed.
- John E. Runnells, General Partner — Joined 1992; formerly a cofounder of special-situations investor Paddington Partners and a partner at law firm Webster & Sheffield; boards have included Lifecore Biomedical, Incumed, and Suture Concepts.
- Jack W. Lasersohn, General Partner — 40 years in healthcare VC, joined predecessor firm F. Eberstadt in 1981; corporate attorney background (Cravath, Swaine & Moore); has served on 30+ medical company boards including Kyphon, Masimo, Metabolix, and OncoMed (lead director); past NVCA Medical Industry Group chair and 2008 NVCA Outstanding Service Award recipient.
- Tony M. Chou, MD, General Partner — Former interventional cardiologist and Abbott Vascular executive (VP/GM, Vascular Closure); boards/advisory roles include Silk Road Medical, Outset Medical, Omada Health, Hinge, and founder/CEO of Route 92 Medical.
Decision Process
A small, four-general-partner partnership; individual partners typically lead specific deals and take board seats, consistent with a partnership-style decision process rather than a large investment committee.
Founder Preferences
The firm favors technical and clinically credentialed founding teams in medical devices and biotech, and frequently backs founding teams where a partner or affiliated operator has direct domain expertise (e.g., Tony Chou co-founding and serving as CEO of Route 92 Medical).
Geographic Focus
Primarily United States (New Jersey and Northern California, where the firm's two offices are based), with selective international investments including Israel (Galil Medical, Radiaction Medical) and France (Tornier).