23 Biotech VCs in '23
Rising stars in biotech investing and creation discuss how they got started, lessons learned and tips to break into the industry.
How does a scientific discovery make it from paper to patient? Let’s ask the experts.
“When I started in the 1970s, I was naïve enough to think that if I wrote papers people would use them, but that didn’t happen…if they were going to lead to therapies for patients you have to form companies,” says Professor Bob Langer to Biomarker [Aug ‘22].
Yet biotech company formation is a risky proposition. Fledgling and mature companies alike, need skilled shepherds to provide expertise, connections, and yes, lots of capital. “Some of the most extraordinary scientists in my lab in the last few years have wanted to take their discovery and impact human health. They realized that by working with the venture community, they could tackle major problems and have the resources to do so,” describes Professor Stuart Schreiber in a July Biomarker interview.
Who are these shepherds of scientific discovery, and how do you meet them? Academics are helping their students answer this question: “I teach The Science and Business of Biotechnology at MIT,” says Professor Harvey Lodish to Biomarker [Aug ‘22]. “In the middle of the class, the students form small groups, and develop a business plan for a start-up. They then present these at the end of the class to outside VCs.” Be it through formal coursework, or informal introductions, many trainees in science and medicine are considering biotech venture capital or creation as career paths. Others are simply in search of good investors: “Thinking through the value capture in a very collaborative exercise is what I most enjoy in talking with VCs,” says Gleb Kuznetzov, CEO of Manifold Bio [Biomarker Oct ‘22].
One thing is clear: investing in biotech and healthcare is a risky business. “Biotech is an industry of incredibly high risk…It's not easy, and there are less stressful ways to make money,” says Arjun Goyal (Managing Director at Vida Ventures) to Biomarker [Feb ‘23]. Yet the need is tremendous: “The whole biotech industry / academic complex only forms or funds 200-300 companies per year, compared to 80,000+ NIH grants, 50,000+ PIs, and 100,000+ grad students and postdocs. There is a ton of science that could be unlocked,” says Tony Kulesa from Pillar VC. When considering a career path, it helps to hear first-hand from those in the trenches—folks actively learning how to build and identify successful early-stage biotechs, or back public companies poised to change the way medicine is practiced.
To this end, I interviewed 23 rising stars in biotech investing and creation. Those with enough experience to provide sound counsel, yet early enough in their careers to render any advice actionable. We start with: what do venture investors do? “I identify and invest in things that have the potential to be new, impactful medicines that help patients by addressing unmet medical need,” explains Joe Cabral of Frazier Life Sciences. Others like Devin Quinlan of MPM, speak to creating early-stage companies: “We work with top academic scientists and drug developers to create and support companies that have the potential to make breakthrough products for patients. It’s exciting, humbling, rewarding – and I’m grateful to be a part of it,” says Quinlan.
How did these folks, many coming from an academic background, first get involved in this industry? After all, there are easier ways to make a living. Some, like Jamie Kasuboski of OMX Ventures, instantly recognized that a career in VC suited his psyche: “I was looking find a career that weaponized my scientific curiosity. I was never happy just working on one project at a time in a single field.” Others came to VC from an entrepreneurial background: “I initially became involved in venture through entrepreneurship. I had lots of new therapeutic ideas in grad school and eventually started a company – which quickly failed…I realized I wanted a job where I could learn how to start a company that wouldn’t fail,” says Ben Portney of a16z.
We discuss what it was like to first close a deal —the lifeblood of venture capital. Descriptions range from the very concrete: “The biggest lesson was probably how important it is, when assessing platform opportunities, to focus on target selection,” (Ana Sybirna, F-Prime Capital) to the more human elements: “The biggest lesson I learned, as my partner Josh says, ‘chips on shoulders, put chips in pockets.’” (Shaq Vayda, Lux).
In 2023, what gets these rising stars excited about an investment or creation opportunity? Many say that these factors are unchanged, independent of the frothy biotech capital markets. “There is definitely a mental checklist,” asserts Pascal Krotee from RiverVest. Seth Cassel from Orbimed breaks his down: “1) Scarcity value - when a company is doing something unique, especially if it is challenging to replicate. 2) A clear and thoughtful clinical development plan. 3) A well-financed company that has the runway to take it significantly beyond key inflection points. 4) An experienced management team that is passionate about its programs and potential clinical impact.”
We touch on advice for aspiring venture investors and creators. How does one break into the exclusive (and perhaps intimidating) world of biotech investing? Many take a page from Nike and say: ‘Just do it.’ “For anyone looking to break into venture, the best advice I have is to start doing the job today,” says Morgan Cheatham from Bessemer Venture Partners. “You have to identify your superpowers - these can be (1) skills (community building, data analysis etc.) or (2) areas of knowledge (computation, synthetic biology, diagnostics, etc). Play to those strengths when finding the right fund," adds Sofia Guerra, also at BVP. The good news is that many are willing to help: “Build your network with VCs – people are surprisingly generous with their time,” urges Anastasiya Sybirna from F-Prime Capital.
Lastly, practical advice for entrepreneurs looking to secure funding in 2023: “Given the capital-constrained environment, it has become even more crucial for companies to focus on 1-2 applications that can de-risk these programs and create value in the near-term,” counsels Mark Springel of Vida Ventures. Others, like Thomas de Vlaam of Pillar, give insight into the inner workings of a deal: “Inside knowledge is key. Most VC deals are done by an internal champion, often a relatively junior person going to bat for your company.”
Developing drugs is one of the most difficult endeavors we undertake as a species, and there are many requisite skillsets for success. We hope that this article serves as a resource for those interested in investing or creation—skills necessary to support our ecosystem and get drugs to patients. At the very least, this article is as an introduction to some of the folks who will be shepherding along ground-breaking science over the next several decades.
The article below includes selected responses from the 23 rising stars:
All responses from the 23 interviewees and full bios are downloadable as PDFs in the appendix at the end of the piece. Thanks to Richard Ebright and Harry Won for input and advice.
What is one of your favorite science papers that you have read in the past year? What excites you about this work, or the area more broadly?
One of my favorite papers was an effort led by Dan Nomura’s group from UC Berkeley. The targeted protein degradation field is very exciting because it will enable us to target historically hard to drug proteins. Typically, heterobifunctional small molecule degraders, like PROTACs, have been engineerable but don’t have the most ideal drug properties. Meanwhile, molecular glues have great drug properties but have historically been challenging to engineer or design rationally. Leveraging their chemoproteomic platform, the Nomura group takes a big step toward rational design of molecular glues. In my opinion, this is just one example demonstrating the inflection point the field of chemical biology currently is at. – Ben Portney, a16z
An area I followed closely in 2022 was the application of a new class of generative algorithms called diffusion models to protein engineering. I’ll highlight one paper in particular from David Baker’s lab that combined structure prediction networks and diffusion models to successfully perform de novo protein binder design. To me, the most exciting finding from this paper was how few proteins needed to be synthesized in the lab to validate in silico predictions. The synthesis of only a couple dozen of proteins were required to validate the computational designs, whereas previous methods required testing tens of thousands of proteins. How far can we push these models? Will the accuracy of generative algorithms improve to the point where very little or even no wet lab validation is required? I fundamentally believe in the importance of the wet lab, and that we will always predict in silico in silico and validate in vitro/vivo. But I am always re-evaluating my assumptions. Strong opinions, loosely held… —Patrick Malone, KdT
I like to read the history of major therapeutic advances, focusing on all the steps of discovery and engineering and how they might have been accelerated/expanded with new technologies that are coming online. A recent subject of my study was the history of GLP-1 agonists, highly recommended reads  and . It’s interesting to read these papers and think about how these therapeutics would have been developed with access to more modern cryo-EM, structure based design, yeast/mRNA display, high throughput peptide sequencing, et cetera; and what else these methods will enable now! Those also led me to discover this beautiful history of GPCRs from Nobel Laureate Robert Lefkowitz . The Lefkowitz paper gives the following amazing context (emphasis mine): “However, even into the 1970s the receptors themselves remained elusive. In fact, a considerable body of opinion held that receptors, as we now understand them, did not exist as discrete molecular entities.” The paper gives a beautiful explanation of the key experiments that led to the whole field of GPCR biology. I find it inspiring to think about what new biological phenomena we will discover as new methods continue to develop! – Tony Kulesa, Pillar VC
At this point it feels as though most of society has heard about the promise of “CRISPR editing”, and how we now have the tools to edit out “problematic DNA” to treat disease. But most diseases are complex, and it may not be enough to change the genetic code to treat every disease. Epigenetic editing is an expansion of that toolkit, and it allows us to dial the individual expression of genes up or down as needed. We now also have a tool to adjust the metaphorical volume knobs and make them louder/softer as necessary. This paper, first published in Science, offers an example of how this can have real-world applicability. Previous research has shown that binge drinking during adolescent years alters brain chemistry in the amygdala and decreases expression of the ARC gene. Well scientists were able to modify the expression of Arc in rats and restore it back to baseline levels. Epigenetic editors will be a tremendously valuable tool in the molecular toolkit. – Shaq Vayda, Lux
My favorite science paper from the last year came from David Baker’s group at University of Washington / Institute for Protein Design, titled ‘Design of protein-binding proteins from the target structure alone’ (Cao et al., Nature 2022). The authors describe a technique for efficient de novo design of miniprotein binders against diverse molecular targets. This paper was particularly notable because it was the first description of an approach to generate sub-nM affinity binders, in a highly reproducible manner leveraging computational design, without the need for iterative wet-lab screening and optimization. High-affinity minibinders generated with this approach can have meaningful therapeutic advantages over traditional antibodies, and it will be exciting to follow how the technology continues to evolve as computational methods for protein design become increasingly more sophisticated. –Mark Springel, Vida Ventures
Briefly, how would you describe what you do and why you love it, to a high school student? [or an uninformed grad student like myself]
In the simplest sense, an early-stage biotech investor helps researchers turn their scientific ideas into new medicines for patients. The process of making a new medicine is long, complicated, and expensive, and an investor provides the money and advice to navigate that process successfully. There’s a lot to love about this job: variety, constant learning, and the privilege of partnering with some of the smartest people in the world. But the best part of all might be the undeniable sense of positive human impact that is core to this industry. When we’re successful, patients get new medicines that can cure them of disease, let them live longer, or improve their quality of life. – Max Farina, 5AM
My job is to find the most promising, exciting new scientific innovations, and then help that science develop into a useful product by providing both funding and non-financial support. I love my job because I get to learn something every day and work with the most smart, creative, driven, kind people. – Becky Pferdehirt, a16z
I partner with extraordinary people who have visions of transforming healthcare and life sciences via novel technology by providing capital, connections, camaraderie, and counsel. My mission is to leverage venture capital and my biomedical expertise as tools for driving positive change in healthcare and life sciences that improves patient care, access, and outcomes, advances the clinician and scientist experience, and bolsters the efficiency, safety, and efficacy of the system at scale. – Morgan Cheatham, Bessemer
As part of the MPM team I get to help shape the future of medicine. We work with top academic scientists and drug developers to create and support companies that have the potential to make breakthrough products for patients. It’s exciting, humbling, rewarding – and I’m grateful to be a part of it. –Devin Quinlan, MPM
I have the opportunity to learn about emerging biotech companies and try to understand which ones are best poised to change the standard of care in medicine. It’s humbling and exciting to see the breadth of diseases being addressed by biotech companies and get to know extraordinarily talented management teams. I also feel fortunate to be part of a fantastic team at OrbiMed, learning from others who have decades of experience in biotech investing. – Seth Cassel, Orbimed
As a part of TRV, I get to help build companies that advance important medicines to treat difficult diseases, often working closely with academic scientists. – Vyas Ramanan, TRV
How did you get involved in venture? What drew you in? What initial misconceptions did you have about biotech venture investing or creation?
I had planned to be an academic scientist until the end of my PhD, when, despite really enjoying my project, I realized I couldn’t pick one area of biology to focus on for the rest of my career or even one post-doc. Everything felt very exciting – cancer biology, aging, biofuels, novel antibiotics, synthetic biology for alternative food… Around that time I met a partner from Syncona (shout out to Alex Hamilton) who had done a similar PhD program to mine and was giving a talk about his career in life science VC. It sounded absolutely fascinating – varied, impactful and still close to science. Alex and many other fantastic people generously shared their experiences and gave me advice on how to build my CV to apply for VC roles. I then gained some industry and strategy experience through management consulting at Advancy and McKinsey and joined F-Prime Capital as an Associate in January 2022. Over a year later I am still loving it! – Anastasiya Sybirna, F-Prime Capital
Growing up I always loved science and was always curious about entrepreneurship, but had a really hard time grasping what a career at the intersection of the two might look like until I was fully immersed in biotech. My first job in the industry was in research at Moderna in the very early days. I am very thankful to have had a front-row seat to one of the most prolific venture-backed biotech stories of all time, and from then on I was bit by the biotech venture bug. I think a misconception I had very early on was that most VCs or venture creation firms had a similar philosophy around innovation and value creation, and as such that the company archetypes and investment theses would be more similar than less. But as I have spent more time in the industry and worked at places with vastly different perspectives, I have come to appreciate how much diversity in thought there really is. – Joe Cabral, Frazier
I started my entrepreneurial journey as a founder/operator, and always intended to continue on as such. In grad school I was working on two startups when I received the opportunity to complete a fellowship at Vida Ventures. I took it, thinking it would be a good way to understand how VCs evaluate startups. Fast forward 3 months, and I was hooked! –Aiden Aceves, Insight
The whole biotech industry / academic complex only forms and funds 200-300 companies per year (according to Pitchbook), compared to 80,000+ NIH grants, 50,000+ PIs, and 100,000+ grad students and postdocs. There is a ton of science that could be unlocked. During my time in academia, I saw a massive cultural transition towards interest in startups. When I started, it wasn’t common to have any entrepreneurial interests; it was concentrated around a single lab/faculty member. But by the time I left grad school, every single lab was spinning out multiple companies, and many academic scientists wanted to leave academia to build their own companies. How do we accelerate this cultural transition worldwide, and then give people the tools and social technology (and perhaps other software, infrastructure, etc) to be successful at translating science? I made it my mission to figure this out, and it’s what we work on daily at Pillar. – Tony Kulesa, Pillar VC
When I was a PhD student, I was lucky enough to be part of the team making discoveries that led to the founding of Dewpoint Therapeutics. While Dewpoint was getting off the ground, we spent hours asking ourselves how our science could make a difference for disease and what experiments would demonstrate its potential. I loved asking these questions – and I wanted to find a job that would let me do that on repeat to hone the necessary skills. To me, it’s all about the crosstalk between biological knowledge, technology development, and unmet medical need. These topics on their own are all interesting, but in company building and investing they blend together into something incredible – and hard! I’m not sure it counts as a misconception about investing, but I didn’t realize just how tough it is to develop a drug while I was a PhD student. It is really inspiring what the biotech industry can do. – Eliot Coffey, Venrock
What was the first deal you worked on that resulted in an investment? As a case study, what are the biggest lessons you learned from your first time?
My first deal at MPM was Orna Therapeutics, which is a company we built based on circular RNA technology from Dan Anderson’s lab at MIT. This is a cool example, because we had been thinking for a while about using RNA to create in situ CAR-T cells, which would potentially have a far better product profile than the cumbersome ex vivo cell therapy CAR-T products. When the MIT team presented the circular RNA technology in 2019, our first thought was “I wonder if you could use this for in situ CAR” – ultimately that is what anchored our investment and “isCAR” continues to be Orna’s lead program. It was a great example of how having a pre-existing thesis in a space can help you to react to new technologies, and ultimately find the conviction to invest.– Devin Quinlan, MPM
My investment in HouseRx was inspired by a lot of work and interest I had on the pharmacy channel and the intersection of new drug development of specialty and complex drugs, pricing models of these drugs and the technology and services needed to get the drugs to patients. Lesson is that the most interesting investment can be at the intersection of a couple of spaces and stakeholders, and you can lean into your passion for a mission and space to become an expert. The business model that aligns all those incentives and puts the patient at the center will win alongside multiple stakeholders, pharma developing innovative drugs, providers caring for the patient and payers keeping total cost of care down by getting the patient on therapy faster and staying on therapy. – Sofia Guerra, Bessemer Venture Partners
My first investment was a “diamond in the rough”. Great science and founder but with a lack of experience an incomplete R&D and financing strategy. Helped restructure the strategy and fundraise and lead an oversubscribed round with a syndicate of top tier investors. Biggest lesson was that the “process is the diligence”. –Thomas de Vlaam, Pillar
The first deal that I worked on at RiverVest that resulted in an investment was Bluejay Therapeutics. I worked on the deal alongside Nancy Hong, a Managing Director based here with me in RiverVest’s satellite San Diego. When Nancy and I heard the pitch, we were both so impressed by their CEO Keting Chu. Nancy and I had a very good gut feeling about her. The rest of our diligence on the asset and indication built our conviction. Keting continues to be one of the most capable CEOs in our portfolio. She has a depth of experience that prepared her perfectly to lead Bluejay and she’s built an incredible team to support the work there. The experience working on Bluejay underscored the importance of getting the right team in place to execute on the plan. – Pascal Krotee, RiverVest
The first deal I worked on that resulted in an investment was Scorpion Therapeutics, a precision oncology company that we co-founded in early 2020. The investment memo was the last project I worked on in the office before the pandemic shutdown the following week. During a time of confusion and chaos around the globe, I learned that it was critical to stay focused on fundamentals and remain grounded in areas where we have high conviction, such as targeted therapeutics. – Jill Goldstein, Vida Ventures
My first deal that was fully approved but I pulled the plug in the 11th hour (literally) and it taught me a very valuable lesson to trust your gut. I loved the tech and worked 6 months on the deal. During that time, I had some concerns about the CEO and didn’t trust my initial reservation about their behavior during the diligence and closing process. I had taken this all the way through approval from the investment committee and just had to sign the final docs and wire the money. I decided to overlook these concerns because the tech was so cool and ended up going all the way to closing on the deals. Some new federal regulation was going in place and we had to close the deal by Friday at 5pm before the new regulation went in to place and we had to start back at square one. The CEO dragged their feet on their disclosures, but it came out at 3pm that final Friday that there was a major legal issue with the CEO warrants and reps. Essentially, my initial misgivings were proven current. I decided to pull the plug on the deal and had to call everyone on my team about the deal being dead. I learned a valuable lesson to trust your gut. –Jamie Kasuboski, OMX
What are some factors that get you excited about a company or company build? Is there a mental checklist or model that you construct during diligence to gain conviction about an opportunity? Any obvious red flags?
Venture capital as an asset class is designed for technologies that can grow non-linearly and achieve scale quickly. The opportunities to do this effectively in healthcare and life sciences are rarer than one would expect. In biotech, therapeutics have long served as a fruitful category well-suited for venture, and more recently in healthcare, software and tech-enabled services have emerged as venture-backable models. I try to keep simple mental models that I can apply consistently across opportunities: 1) Why now? 2) Why is this team uniquely positioned to win? Can I envision a 5-10 year trusted relationship with the founders/CEO? This is most important at the earliest stages. 3) What is defensible about this technology or approach? 4) What value does this business create in the form of clinical and financial return on investment for key stakeholders of the company or ecosystem? 5) Does the business model proposed align with the value delivered by the company? Does the business model appear efficient or designed to generate profits long-term? 6) If this company is an outsized success, does it create a world I want to live in? –Morgan Cheatham, Bessemer
This is an unsatisfying answer, but I am a firm believer that no two deals are alike – so as a result try not to follow any kind of process that is algorithmic or overly prescriptive. We look at an extremely diverse opportunity set at Frazier, so as a result need to be able to scale our risk tolerance and upside expectation commensurate with the stage of the deal – which generally does not bode itself to any kind of absolutist mindset. I think the only unifying framework I use is to ask the question “is this going to result in a differentiated drug in an area of unmet medical need?” There are then a lot of layers underneath, but that is usually a pretty good starting point. – Joe Cabral, Frazier
On computationally-enabled platforms: I focus less on the algorithm and more on the underlying data on which the algorithm is trained. Platform differentiation and defensibility derive from the data, not the algorithm. A preview of things that I look for:
—Proprietary access to a novel data type or modality the enables unique biological insight
—Ability to generate a large quantity of training data with high-throughput (in general, algorithm performance scales with the size/quality of the training dataset as long as the model isn’t overfit)
—Scalable method for labelling/annotating/pre-processing data that is difficult to replicate (e.g., access to human expert labelers, or self-supervised approaches that eliminate the need for human annotation)
—Ability to go beyond correlational relationships to establish causality (e.g., pooled CRISPR screens). Despite all the progress in deep learning approaches like transformer-based algorithms, these methods still only discover correlations in the underlying data. In the future, I believe we will see a greater focus on causal machine learning/inference in biology. —Patrick Malone, KdT Ventures
There’s definitely a mental checklist—I think every investor has a checklist they go through for a new investment that includes the basic items like the asset and therapeutic area. In the current market, we’ve spent a lot of time analyzing a company’s plan, team or team build, and the syndicate of investors. Valuation is a critical factor, too. We need to ensure it’s possible to get the returns we expect based on the comps in the space and company’s path moving forward. —Pascal Krotee, RiverVest
I start with the founder: are they humble, hungry, and smart? Next, I look at the technology: does it have strong IP and FTO? What “right” does the company have to win? Lastly, I consider the clinical feasibility: Can I imagine this as a drug that an actual patient takes for the rest of their life? From a process perspective try to fill in and score 5 buckets: 1) Technological risk, 2) Biological risk, 3) Clinical risk, 4) Team risk, 5) Market risk. –Thomas de Vlaam, Pillar
I’m always excited about companies developing therapies: (1) in areas of high unmet medical needs with uniform patient populations, (2) with a clear clinical and regulatory path, (3) a capital and time efficient path to value creation, and finally (4) go it alone potential. –Regina Salvat, Sofinnova
1) When companies have a new technology that enables them to unique address a disease indication that other technologies cannot address. 2) When risky new drug targets are backed up by supportive human genetic validation data. 3) When there are one or two case reports out there supporting that a certain type of therapy can be effective in humans. For example, Affini-T Therapeutics is a company that we co-founded developing engineered TCR therapies to address oncogenic drivers in cancer, including KRAS. There have been anecdotes of T cell therapies generating responses in KRAS mutant tumors in cancer patients, which enhances our conviction that this approach has legs. –Jill Goldstein, Vida Ventures
I’m particularly excited by companies that have an “engineering-first” mindset and are focused on better understanding biology from a research/academic context and translating it into a commercial setting. One of the clearest ways this can be demonstrated is via partnering with a larger pharma company in which the startup is able to use their platform and provide a “best-in-class” tool as part of their discovery workflow. Oftentimes this allows the startup to not only receive some economic consideration for their efforts, but gain invaluable experience about how discovery is doing at the pharma scale. –Shaq Vayda, Lux
Using your mentors as case studies, are there any traits or skills that you have tried to develop to become a better investor or creator?
The more time I spend as a Board observer at 5AM portfolio companies, the more I appreciate the importance of having empathy for the management teams and founders that we work with. The most productive Board relationships that I see are those that function as a partnership where ideas are exchanged, advice is offered, and management is generally trusted to make the right decisions for the business. Of course, this kind of trust is only possible when you have faith that those executives are qualified, committed, and communicative, so hiring and investing in the right senior leadership is absolutely critical. On the investing side, I’ve learned a lot from the 5AM team about resisting the urge to frame diligence as an assessment of a company and instead focusing on the formulation and validation of a specific investment thesis. Asking the question “Is this a good company or a bad company?” tends to lead to a disorganized and inefficient diligence process. Instead, it’s helpful to first define what a successful outcome really looks like (e.g., getting a drug approved, getting acquired, raising the next financing at a step-up) and then building confidence that the company is well-positioned to reach that successful outcome. Within that framework, identifying the most important questions and risks becomes much more natural. – Max Farina, 5AM
An overarching skill I most admire from my mentors is communication. This can come in the form of storytelling, pitching, delivering feedback, or asking important diligence questions. I continuously work to improve my communication skills as a company creator and investor. Mentors such as my former boss Geoff von Maltzahn and current boss Vineeta Agarwala are exceptional communicators and can distill complex, multifactorial subjects into the most important, compelling points and strategy. –Ben Portney, a16z
Stacie Weninger (who also did a Biomarker interview) is a mentor I look up to. She strikes me as someone who not only has the depth of knowledge and domain expertise, but also has the breadth in exposure and connections. That is the trait that I want to build as well. – Siyu Shi, F-Prime Capital
Everyone at my firm has instilled this in me: biotech (and particularly healthcare) can be an all-consuming bubble, but you should still try and be well-read outside of science and medicine. There is a tremendous amount of learnings from every domain of the world – philosophy, business, psychology, marketing, etc. – that can be used to augment not only your venture career, but also your life. Additionally, they thought me to always question assumptions, and make sure they’re rooted in fact – otherwise, you’ll be burned. – Ketan Yerneni, KdT
The most important lessons that mentors have emphasized to me are the following: The hardest thing about venture is that the time scales for learning/feedback are extremely long. There is a lot of randomness along the way, and it is easy to fool yourself. Mentors have drilled into me the value of deeply and honestly self-reflecting on the specific actions and decisions that resulted in any major value creation or loss. Write down your reflections when they are fresh, as later your memories are wrong. Share your thinking with mentors, who can help calibrate against their own experiences. –Tony Kulesa, Pillar
Never think you know it all—ask questions and listen. Make sure you’re working on important problems- what we do is hard, so the upside (to patients first, but also to us as investors) must be commensurately high upon success – Vyas Ramanan, TRV
There are lots of admirable traits I’ve observed in investing mentors. But there are a few I think are especially important to have or develop.The first is being truth-seeking. Being truth-seeking starts with being curious – which is essential for investors – but it goes further. You need to be fearless in your learning, because often you’ll learn things that present obstacles to your investment theses or your portfolio companies’ strategies. You need to be able to find these truths, face them, and adapt. The next is being empathetic. As biotech investors we work with entrepreneurs doing one of the hardest things out there: developing drugs. So, it’s a certainty that the companies we work with will go through difficult times. I’ve come to believe (from watching the pros) that being the best partner and supporter in these situations starts with deep empathy.
The last is some mixture of optimism and creativity. To be a good early-stage investor you must be able to see what a company is today and envision what it could be years down the line. You need to be able to both imagine things and believe those things are possible. Paradoxically, many investors are trained scientists with innately strong skepticism. I think pairing this skepticism with creative optimism is a powerful combination – provided you know when to flex each muscle. – Eliot Coffey, Venrock
If someone decides that VC is for them, any advice on finding a job in this environment? What are 1-2 things you would recommend doing to be proactive?
Ultimately, one of the best ways to get a job is simply to start doing it and prove you’re capable! Develop your own informed opinions on what are a few up-and-coming areas that are promising, and what are specific compelling investment opportunities in those spaces. Start tracking founders within academia and industry who are doing the most exciting work in these spaces and are entrepreneurial. Consider writing content or finding other avenues for sharing your opinions in public. –Becky Pferderhirt, a16z
I think the two best things are to (i) get your reps up and (ii) find ways to talk about ideas when you are interacting with investors. For (i) I’d encourage leveraging whatever resources/avenues you might have access to (student funds, venture clubs, fellowships at venture firms) that allow you to see a high volume of pitches or new technologies. On (ii) if you can do some work on your own and develop theses around topics or areas that are interesting to you it will go a long way in your informational conversations with investors – generally these are a lot more fun to talk about than the typical “what is your day like?” questions. – Joe Cabral, Frazier
Build relationships with VCs without asking for a job. Take your time in demonstrating to your future colleagues that you can find interesting science (papers or companies) and can synthesize an informed opinion on it. If you do this well, the job will come to you! Or if you can’t wait, VC fellowships are a tried-and-true way to get your foot in the door. Don’t be too picky, any experience is better than zero! –Aiden Aceves, Insight
My biggest piece of advice is to ask – don’t be afraid to reach out and ask for opportunities. Email VCs and convince them that you can offer something that will make their life easier and level up the firm. Again, I only ended up in venture after cold-emailing far too many firms and being ghosted or rejected by 99% of them. Don’t give up and keep trying. Every single opportunity I’ve had in my professional career – whether research, industry, or VC – came about from a cold email. People are more available and open than ever before in history – take advantage of it! I’ve had several medical students reach out and ask me about how to balance venture and clinical work. Unfortunately, there’s no magic bullet or shortcuts here – you will just have to work harder than everyone around you. I vividly remember being scrubbed in for a massive 15-hour+ metastatic ovarian cancer resection, coming home, and then continuing my venture work for another several hours as we had an investment in flight. I never minded as I enjoyed the VC work, which was a welcome respite from my “day job”. As my partner, Mack Healy (a former corporate lawyer), always reminds me: “By keeping your head down and doing the hard work in your 20s and early 30s, the rest of your life will be much easier”. – Ketan Yerneni, KdT
As a PhD, I thought about getting an MBA, but was advised that all it did was “build a network.” Instead of spending 2 years getting that network at a Business school, I spent two years grabbing coffee with a new person in biotech every week. My network is far stronger and only cost me about 1/40th of the price. Every interaction with a VC is a job interview and always bring a gift: Every interaction you have a VC is judging you if you can think and act like they act. Make a lasting impression with a gift. I don’t mean a physical gift, but a newco idea or company that you can talk about or have made a pitch deck for. This is the easiest way to show people you think like a VC. I used to make pitch decks for newco or investment ideas and send them to VC after I grabbed coffee. It will get their attention. Make sure they are fully flushed out though, the last thing you want is to have a half-baked idea. – Jamie Kasuboski, OMX
It’s helpful to look for opportunities in grad school to gain exposure to biotech. That exposure can come in a variety of forms, including internships/fellowships at biotech funds or companies, consulting for a startup, or joining a biotech club or startup competition at your school. Even a 2-3 month experience can begin to build a skill set and learn the language of biotech. There’s also a lot you can learn about biotech in grad school by listening to relevant podcasts (e.g. The Long Run and Business of Biotech), reading STAT and other online publications, and following companies that are of interest to you. –Seth Cassel, Orbimed
Any advice to prospective or first-time entrepreneurs in 2023, as they pitch to VCs in the coming year?
Constantly iterate on how to best communicate the story of your company, from the problems it solves to what makes your technology differentiated. Learn from each interaction with investors to understand what they need to see to merit investment. – Ben Portney, a16z
Great companies are built in all markets. Focus your pitch on five key questions: 1) why now? 2) why you? 3) why is your approach differentiated and defensible? 4) why does your company have a shot at becoming an enduring, generational business? 5) why is your business venture-backable? – Morgan Cheatham, Bessemer
Find good advisors before the pitch! As resources become more constrained from venture money, good advisors can help early entrepreneurs think about where to go, what to do and who to talk to. Surprisingly, busy people can still be very generous about their time helping the next generation! – Siyu Shi, F-Prime Capital
Pressure-test your ideas with friendly VCs or other entrepreneurs before you go out fundraising. And really work on honing the pitch deck and crystallizing the premise of the company and its approach – use data to support your vision! – Devin Quinlan, MPM
1) Get used to “No,” but keep pitching. 2) Your initial pitch deck should be no more that 15 slides and should only focus on answering, 3) What’s the pain point your company is solving, 4) How you are unique in solving the problem (secret sauce), 5) what solving it is worth and 6) who are your competitors. First pitch is to get your foot in the door for the second meeting. The second meeting is to technically impress them. – Jamie Kasuboski, OMX
Especially if you are advancing a novel technology platform, it is tempting to explore all of the possible applications you could use the technology for. Others may feel inclined to continue to optimize / perfect the technology at a basic level before focusing on any single application. Given the capital-constrained environment, it has become even more crucial for companies to focus on 1-2 applications that can de-risk these programs and create value in the near-term. Companies should clearly identify points in time that represent go/no-go stage-gates for those applications, and understand exactly how much capital it will take you to get to the next value inflection point. Entrepreneurs who recognize this and prioritize a focused development plan will find that their pitch will be more likely to resonate with investors (so long as the science is also rigorous and the proposed product addresses a true unmet need). – Mark Springel, Vida
What is a special talent you have outside of work/science?
“I make very bad puns and am great at coming up with fun names for dogs.” – Vyas Ramanan, TRV
“I can make fire with a large variety of obscure and found materials.” – Aiden Aceves, Insight
“Exceptionally mediocre golfer, despite all my efforts to be better!” –Joe Cabral, Frazier
“Falling asleep on a moving vehicle. Let it be a 30-minute car ride or 8-hour flight!” – Siyu Shi, F-Prime Capital
“Jack of all traits, master of none. I’ve been a “professional” (as in got paid for it) chef, dog trainer, snowboarding instructor, bartender/waiter, lab scientist, and CEO all in the span of 10 years.” – Thomas de Vlaam, Pillar
“I can make a mean grilled cheese sandwich” – Shaq Vayda, Lux
“I like to ski fast down steep mountains.” –Patrick Malone, KdT
Great write up.
Would you be willing, along with some of these rising biotech stars, to present during our 4th Annual Biotech Startup Symposium? The Symposium features industry experts who will present and discus various topics to help biotech startups from all over, navigate their path to commercialization and connect with like-minded entrepreneurs and investors. If you could email me back at firstname.lastname@example.org so I can follow up with more details that would be much appreciated. And here is a link to our 3rd Annual Biotech Startup Symposium On Demand presentations if you are interested in learning more about this event. https://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&eventid=3875793&sessionid=1&key=9058F730A65EB07A7B235DAB29E483E4&groupId=3979457&sourcepage=register