Launching a new venture fund is notoriously challenging for emerging managers. In a traditional VC fund model, managers must typically raise a large pool of capital upfront and are then under pressure to deploy that capital quickly (often within a few years) to meet investor expectations and the fund’s mandated timeline. This model can introduce several problems:

• Rushed Investments: Managers may feel compelled to invest in suboptimal deals just to utilize committed capital within the investment period. The ticking clock of a typical 10-year fund (with, say, a 3-5 year investment window) can force decisions that prioritize speed over quality.
• High Fundraising Barriers: Raising a whole fund upfront is time-consuming and difficult for new managers without an established track record. It diverts focus away from sourcing and researching deals.
• Inflexible Structure: Investors in a traditional fund commit capital blindly to all future investments, meaning limited partner (LP) expectations are tied to the fund’s overall performance. The manager must manage the portfolio as a whole, often unable to pause deployment if good opportunities are scarce without disappointing investors.

For Scalpel Ventures, which values deep due diligence and picking only the best healthcare startups, these traditional constraints were a serious concern. Dr. Parekh and Saket Jain did not want the typical pressure of “use it or lose it” with investor capital. They preferred an open-ended approach, where they could take their time to research companies thoroughly, invest selectively, and deploy capital gradually as truly compelling opportunities arose. The challenge was to find a fund structure that allowed this patient, quality-driven strategy while still attracting investors.

Scalpel Ventures found its solution with Avestor’s Customizable Fund® platform, adopting an innovative fund model that perfectly aligned with their needs. Avestor’s Customizable Fund® is essentially a hybrid between a traditional blind-pool fund and deal-by-deal investing. It allowed Scalpel Ventures to create a single fund umbrella under which they can raise capital and execute multiple investments, but with a crucial twist – investors can choose which specific deals they participate in.

Key features of this model include:

• One Fund, Multiple Deals: Instead of setting up a separate LLC and legal process for each investment deal, Scalpel Ventures operates one fund entity. Under this umbrella, they can include as many startup investments as they find attractive – all covered by a single set of fund documents (PPM). This significantly reduces administrative overhead and legal costs compared to doing individual syndications for every deal.
• Deal-by-Deal Investor Choice: Unlike a traditional fund where an LP’s money is automatically spread across every investment the fund makes, Scalpel’s investors get to make a separate decision for each portfolio company opportunity. In practice, the fund presents an investment (e.g. a promising medical device startup raising capital), and each investor in the fund can opt in with their capital for that deal or skip it, depending on their interest. This ensures investors are only in deals they believe in, providing greater control and transparency into where their money goes.
• Flexible Capital Timing: The Customizable Fund® structure is inherently more flexible on timing. There is no pressure to deploy a pre-committed pot of capital within a short window. Scalpel Ventures can raise capital continuously or in tranches and invest deal-by-deal over an extended period. In fact, Scalpel set an initial target fund size of $10 million with a long 10-year fund life (plus optional 2-year extension). This open framework means Dr. Parekh and Saket can be patient and wait for the right opportunities, rather than rushing to invest for the sake of meeting a schedule.
• Streamlined Investor Onboarding: Since investors come into the overall fund (as limited partners) once, Scalpel does not have to re-onboard the same investors or file new paperwork for each deal. All investors have already joined the fund, so when a new startup investment is available, it’s as simple as allocating portions of the fund to that deal for those who opt in. This makes raising capital faster and more efficient under this model.

By using Avestor’s platform to implement this Customizable Fund®. Scalpel Ventures essentially engineered a fund that operates on their terms. It gave them the structural flexibility to honor their careful, research-driven investment approach while still providing a clear framework for investors to participate. Avestor also provided a ready-made infrastructure: an investor portal and back-end fund administration, so the Scalpel team could focus on evaluating startups rather than paperwork.

Implementation: Building a Portfolio One Deal at a Time

With the Customizable Fund® in place, Scalpel Ventures began sourcing and vetting deals in their specialty domain. The investment approach adopted is highly selective: “Each opportunity we present is evaluated by our experienced team, ensuring that we only bring forward companies with the potential to drive meaningful change and deliver significant returns.”

On the investor side, Scalpel communicates each opportunity through Avestor’s platform, providing full information and updates. Investors can review the details of a given startup (market, product, team, terms, etc.) and then decide to allocate part of their committed capital to that deal. If an investor prefers to skip a particular deal, they simply keep their capital un-deployed until the next opportunity – a level of granularity not possible in a traditional fund.

Early results have been very promising. Within a few months of launch, Scalpel Ventures closed its first investment deal under this model, raising a significant round for a groundbreaking company utilizing 3D printing technology to create personalized implants. This company, Oxford Performance Materials (OPM), exemplified the kind of high-impact

innovation Scalpel seeks. OPM’s proprietary 3D-printed orthopedic implants attracted Dr. Parekh’s interest immediately – in fact, he personally had collaborated with OPM and even performed the world’s first surgery using their implant, validating its medical value. By leveraging the Customizable Fund®. Scalpel was able to quickly mobilize capital from its LPs to invest in OPM’s round.

Beyond OPM, Scalpel’s team continues to carefully build a diversified portfolio in the healthcare sector. They have already seen noteworthy successes. One example is Artelon, a regenerative medicine company in orthopedic implants – an investment that yielded a 5× return in just 11 months for Scalpel’s team. Another is Paragon 28, a musculoskeletal-focused company that went to a successful IPO, demonstrating the kind of high-upside opportunities Scalpel targets.

Benefits Realized: Flexibility, Quality, and Alignment

Adopting Avestor’s Customizable Fund® structure has yielded clear benefits for Scalpel Ventures and its stakeholders:

• No Pressure to Rush Deals: Free from a rigid deployment schedule, Saket and Dr. Parekh do not feel pressure to “invest fast” just to satisfy a timeline. They can take the time needed to diligently vet each startup, which helps avoid costly mistakes.
• Higher Confidence and Quality: Because every deal in the fund is optional for investors, Scalpel’s team is motivated to ensure each opportunity is top-tier. This dynamic creates strong alignment and a curated portfolio of standout companies.
• Investor Empowerment and Transparency: Scalpel Ventures’ LPs appreciate the unprecedented control – they can shape their own personalized venture portfolio by choosing deals. The transparency of seeing each deal’s specifics and receiving performance updates fosters trust.
• Efficient Fund Management: With one fund covering all deals, Scalpel avoids duplicative legal fees and admin for each investment. This efficiency not only saves money but also accelerates deal execution.
• Strong Early Performance: While still a young fund, Scalpel Ventures is already delivering results that validate its approach. The firm reports impressive equity multiples and strong returns to investors.

The Power of a Balanced Team

The partnership of a medical expert and a finance expert is somewhat uncommon in venture funds, and it has paid dividends. Dr. Selene Parekh’s deep medical knowledge means Scalpel can rigorously assess the clinical merit and market need of healthcare innovations. Meanwhile, Saket Jain’s business and fundraising expertise ensures that the fund’s operations are sound and that portfolio companies receive guidance on scaling and strategy.

This balance reduces risk: Scalpel leverages insider knowledge to minimize risks and deliver substantial returns. For example, when evaluating OPM’s 3D-printed implants, Dr. Parekh understood the surgical value and unmet need, while Saket could evaluate the company’s business model and plan the investment terms. Startups see value in this combination as well – portfolio founders know that beyond capital, Scalpel brings connections in the medical community, clinical trial insights, and seasoned business mentorship.

Conclusion

Scalpel Ventures’ experience illustrates how an innovative fund structure can solve the classic challenges faced by new venture managers. By adopting Avestor’s Customizable Fund® model, Dr. Selene Parekh and Saket Jain built a healthcare-focused VC fund that aligns with their philosophy: patient, high-conviction investing in game-changing startups. They successfully avoided the trap of rushing investments, without sacrificing growth – in fact, they accelerated it.

This case study highlights several key takeaways for the venture capital industry:

• Flexibility can enhance performance: Funds that allow flexible timing and investor choice can produce better-curated portfolios and strengthen manager discipline, ultimately driving strong returns.
• Investor alignment is paramount: By giving investors more control and transparency, Scalpel built greater trust and a truly engaged LP base.
• Domain expertise adds value: The combination of deep sector expertise with a novel fund model created a powerful synergy in Scalpel’s case.

Scalpel Ventures demonstrates that when you remove the artificial pressures and align incentives properly, venture capital can truly focus on what matters most: finding and funding the best innovations that will transform industries and improve lives.

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