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Virtual Radiologic founder hatches new venture fund

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Dr. Sean Casey, a founder and former CEO of Virtual Radiologic Corp., launched a new early stage venture fund, MedCity News has learned.

Bloomington, Minn.-based Omphalos Venture Partners is targeting healthcare, consumer and information technology companies — Omphalos means central, or focal, point.

Casey, a radiologist who graduated from Johns Hopkins University and Albert Einstein College of Medicine at Yeshiva University, founded Virtual Radiologic in 1999.

Using high-speed broadband connections and a proprietary software system, Virtual’s technology enables short-staffed emergency rooms to outsource “image reads” to radiologists around the country working out of offices or their homes.

Virtual Radiologic went public in 2007 and grew annual sales from $86 million to $121 million last year.

Dr. Casey did not leave Virtual Radiologic on good terms. Rob Kill replaced Casey as CEO in January 2009 in a planned succession, and Casey remained chairman.

However, less than three months later, Virtual said in its proxy statement that its board removed Casey as chairman and decided not to recommend him for re-election “based upon considerations of board size, board relationships and functionality, board composition and the desire to have Mr. Kill elected as a director.”

Still, Casey didn’t walk away empty handed. He remained the company’s second largest shareholder with 3.9 million shares, or 24 percent of Virtual Radiologic.

That means Providence Equity Partners’ $294 million buyout of Virtual Radiologic in July netted Casey around $68 million — a nice chunk of change from which to launch an angel fund. Joining Casey at Omphalos is Mark Marlow, a former CFO at Virtual Radiologic.

The Minnesota Dept. of Employment and Economic Development recently certified Omphalos to receive the angel investment tax credit.

So far, DEED has certified Twin Cities Angels II, Ninety-Seven Twenty-Three LLC and Wildwood Investors. That suggests the angel credit, at least on paper, is helping to create new angel money in town as opposed to just helping people who were going to invest anyway.

Omphalos didn’t immediately return a phone call regarding questions about how much money it is trying to raise.

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