- VC investors gathered at the Future Investor Forum 2017 to discuss a range of issues around life science investment, including investors’ career development and how to achieve success in the sector.
- Peer-to-peer networking is seen as a vital way of sharing best practice, knowledge, and experiences, while also serving as a sounding board for the investment community.
- Gaining a global perspective can ensure investors remain ahead of the curve and provides the opportunity to learn from differing regional approaches to life science investment.
On 14 September 2017, more than 20 leading venture capital (VC) investors in the life sciences sector gathered at the Merchant Taylors Hall, London, for Biotech and Money’s Future Investor Forum 2017. During this broad-ranging discussion, participants considered some of the principal elements required to support investors’ career development, as well as the skills and resources that contribute to their success. Highlights from the discussion on this topic are outlined below.
It may sound obvious, but as a number of delegates pointed out, one of the cornerstones of success for investors is the ability to raise money, particularly in the case of new funds. As one participant noted: “People, especially at the beginning of their career, focus on doing deals. But, actually, to make it as a VC, being able to raise money is the most essential characteristic.” This hinges on having access to the right network, and possessing the relevant skills, knowledge, and attitude. So how can investors take a proactive approach to building these foundations and what does this mean for both their success and the success of the wider life sciences sector?
The importance of networking cannot be underestimated, not only in terms of developing relationships with key opinion leaders (KOLs), academics, business development professionals, other investors, and the wider community in order to source the best investments, but also with regards to sharing best practice. Networking events, whether formal or informal, can allow investors to exchange knowledge, experiences, and key learnings with peers. “There are lots of events you can go to and meet CEOs and chairmen,” said one delegate. “There are relatively few events that are only in the industry.” The opportunity to gain alternative perspectives and bounce ideas off other investment professionals in an informal setting could also prove particularly valuable to investors in smaller funds who may not have access to an extensive in-house sounding board.
Staying ahead of the curve
While it may not be either necessary or possible to become an expert in every subsector within biotech, staying up to date with growing fields and the latest market developments can help to ensure that investors are well positioned for the future. “For me personally, it’s all about keeping your eye on the future,” said one delegate. “Trends change.”
Maintaining a global outlook also plays an important role in knowledge building and in providing a different perspective on approaches to deal making. This could be achieved through a variety of mechanisms, such as attending networking events with peers that operate elsewhere in Europe, for example, or drawing on the expertise of colleagues based in the US.
Beyond regional insights, colleagues and networks can also help to fill knowledge gaps and provide alternative viewpoints. “One challenge we all have is there is no book to becoming an investor. We all come with a varied background, we all have our own weaknesses,” explained one delegate. “You have to identify what your weak spots are and try to improve, but don’t forget about your strengths as well: bring those out. The chance we have is that we have diverse teams usually. If you’re missing that knowledge, there is someone in your close network who has it.”
Enhancing the VC talent pipeline
Supporting the next generation of VC talent in the UK through apprenticeships, mentorships, and potential university and management school training opportunities, was identified as another area that could contribute to investors’ career development and to the future of investment in the life sciences sector. Training and mentorships are also of benefit to investors further along in their career. Drawing on his personal experience, one participant said: “One of the things I think I’ve struggled with, pondering my own interventions, is who do I talk to, to help guide me through the unknown? Without a textbook, I’m reliant solely on experiences. Who is the right person for me to help me through that?”
Of course, reputation cannot be forgotten when it comes to career development. While much of this will hinge on the companies invested in and their subsequent success, relationship management, such as relationships with limited partners (LPs), also plays a part. As one delegate pointed out: “It’s easy to lose track of that in pursuit of a deal. But, actually, being careful and looking after LPs has to be part of building that career story. People remember.”
This also extends to interactions with entrepreneurs and academics looking for investment. By providing constructive feedback to those they have turned down, investors can help to increase understanding, perhaps encourage them to strengthen their proposition or develop their idea further, and improve the relationship between the VC and academic communities, which will ultimately benefit the life sciences sector as a whole. “It’s about improving the relationship going forward,” explained one delegate. “How can we do that? If that’s just by spending a little more of your time and humility helping people understand your position, that’s time well spent.”
About the event: The Future Investor Forum is designed to support peer-to-peer networking among the life sciences investment community. Forums are conducted under the Chatham House Rule to facilitate knowledge sharing and frank discussions about the key opportunities and challenges facing the sector.