October 22, 2012

Xconomy

Who Will Survive the Biotech VC Downturn? The Young and the Proven

 

Most people, if they’re being honest, don’t have a clear plan for what they’ll be doing in their careers five years from now.

But career planning is serious, high-stakes business for biotech venture capitalists. When a firm raises a new fund to invest in biotechnology, the partners have to personally commit to oversee their investments for 10 to 12 years. While most people get an annual performance review from their boss, biotech VCs generally have to wait a decade to get a true read on their performance.

I bring this issue up during a period of decline and stress in biotech ventureland, as many partners are being forced to look in the mirror and ask whether this is what they want to keep doing with their lives. Many would surely like to keep going, because the work is so darn interesting and important and—oh, yeah—lucrative. But there’s a natural shakeout going on, as less money is flowing into new biotech funds. Partners without the best track records, or the best connections, are often being forced off the island. Some folks may have to ask themselves if they have the stomach for another decade of uncertainty. Others may just figure they want to retire, or kick back at the vineyard, sometime before 2022.

Given how long it takes for a biotech fund to mature, partners in their 60s today may not want to sign up for another go-round that requires they work full-throttle into their mid-70s. So, I’ve been wondering lately which biotech VCs are the most likely to keep investing for at least another 10 to 20 years. While I know some people in their 70s with remarkable drive, one of the facts of life remains that most people are looking to slow down by that age. Talented newcomers, on the other end of the spectrum, are finding it extremely difficult to break in and prove themselves in a shrinking industry. That leaves people who are at the mid-career stage, particularly the ones with established track records, who are most likely to stay in the game.

So, I’m compiling a list of biotech venture capitalists who are both young (in their late 30s to early 50s) and proven (with at least three winning investments in which they were closely involved). This isn’t really as simple as it sounds. There’s no central database I’m aware of that lists the dates of birth of venture capitalists, or return data for individual partners. Certainly, some of the portfolio “wins” these people claim are big, and some are pretty modest. But I’ve attempted to build this “young and proven” list by asking a lot of sources for suggestions, by checking ages listed in various SEC filings, and by weeding out really small exits that appeared to be worth $50 million or less. If you see any ages that are incorrect or out of date, please let me know and I’ll correct it. I’d also love to get some more nominations from readers, since this list is by no means comprehensive. If you have other folks you’d like to nominate, just send me their age and a list of at least three big portfolio wins, and I’ll update this post.

* Mike Carusi featured on the list of “young and proven,” biotech venture capitalists.

For the full article and list, visit: http://www.xconomy.com/national/2012/10/22/who-will-survive-the-biotech-vc-downturn-the-young-and-the-proven/