Investing in the neglected
Updated: Sep 21, 2020
This is Emma Lazarus’ famous phrase mounted at the Statue of Liberty. The United States took in the world's neglected and in turn produced the largest economy in the world.
When we consider thematic areas in which to invest, we begin with two simple criteria.
The first is obvious: how large is the problem in this area? We’re a venture firm, and so are looking for big opportunities with substantial return profiles that justify the risk being taken.
But the second criteria is perhaps less obvious: how neglected is the problem? That is, we consider how many dollars and resources are already flowing towards this issue.
For example, the scale of the challenge in oncology is enormous and work in that area is of vital importance. Yet there are billions of dollars already flowing into cancer research each year, and so the impact we can make by investing our capital in the area is limited.
On the other hand, there are many areas of healthcare which are deeply neglected but also important. Few venture firms have focused medical devices programs; few invest invest in infectious disease, in drug reformulations, or in companies focused on the needs of Medicaid or uninsured or rural communities. We love to invest our energy and capital in companies working in these kinds of areas.
While not all neglected categories make for good venture capital investments, we believe this focus helps us identify places where our dollars can go the furthest in terms of healthcare impact. It helps that, as those in the venture industry know, investing in neglected, contrarian areas also creates the potential for strong financial returns as well.
Of course, it’s hard to invest in the neglected; there’s more information asymmetry, fewer firms we can syndicate investments with, and the lack of trendiness can make it hard to attract talent. Fortunately, we work with hundreds of healthcare domain experts through our Venture Adviser program, who collaborate with us and our partner companies to tackle these challenges.
We believe that our most important work will be on those problems which have been forgotten or deemed intractable. We know there are many entrepreneurs out there charging towards solutions. If that's you, we're here to follow your lead.