Welcome back to Elevator Pitch, where we put top tech investors under the microscope. And speaking of microscopes: This week's guest is Dr. Beth Seidenberg, who heads up life sciences investing at Kleiner Perkins Caufield & Byers.
A physician who trained at Johns Hopkins and the National Institutes of Health, Seidenberg joined Kleiner Perkins in 2005 after a stint as chief medical officer of biotech giant Amgen. She's since founded or incubated five startups within Kleiner's walls.
Yet Seidenberg is one of a shrinking number of venture capitalists who invest in biotech; many firms have fled the business for less risky fields like software. And after a recent shake-up of Kleiner's ranks, Seidenberg is part of a shrinking cadre of partners entrusted to make early stage bets at the fabled firm -- which has encountered questions of late over failed bets on cleantech and exclusion from hot deals like Facebook.
We asked Seidenberg why she's still bullish on biotech -- and on Kleiner's future.
Q: How'd you get into this racket?
A: After 15-plus years in operating roles at biotech and pharmaceutical companies, I decided to focus my energy on building companies rather than building products. I was introduced to (Kleiner co-founder) Brook Byers by the venture capitalist Pitch Johnson, who was on the board of Amgen. Brook and I hit it off, and I decided to try my hand as an investor.
When I first joined the firm, I was still mulling whether I was better suited to being a VC or a CEO. After a year of getting my sea legs on the investing side, though, I found that I was having more fun than I'd ever had.
Q: What kinds of pitches are you looking for now?
A: I'm looking for big ideas to disrupt the delivery of health care. KPCB is looking for people who are focused on what's possible, people who dream big and drive change.
The millennial generation is frustrated and disenchanted with the current delivery of health care. We're looking for entrepreneurs who will apply the best tools, smart business models and inventive design to drive the transformation of the U.S. health care system.
Q: What's the biggest mistake entrepreneurs make?
A: Over-promising and under-delivering. Entrepreneurs need to find the right balance between dreaming the dream and being realistic about what they can deliver within a specific time frame. Then do what they do best: Set up a plan and do more than anyone believed was possible.
Q: What's the next big thing going to be?
A: Digital tools that will change the face of health care delivery and information sharing. Disruption in the U.S. health care system is underway with the debut of the Affordable Care Act. Digital tools we take for granted in other businesses and in our personal lives will permeate the health care market.
The trouble with the government's health insurance sign-up process over the past few weeks has underlined how much Silicon Valley entrepreneurs are needed to improve the system -- entrepreneurs who won't be encumbered by legacy systems and thinking. Improving information flow to deliver better health care at lower cost is a national imperative. Startups that address the need to connect doctors and nurses to patients and services are of great interest.
And given KPCB's deep expertise in both life sciences and IT industries, we believe we are uniquely positioned to partner with entrepreneurs who are pursuing disruptive ideas in digital health. (Note: Kleiner has notched five biotech IPOs this year alone, and another portfolio company was bought by drug giant Abbott for $400 million.)
Q: Does it frustrate you to see VCs putting less and less money into biotech and medical devices?
A: I'm optimistic that the tide will turn. With the market embracing biotech and diagnostic IPOs, optimism is returning. Innovation in health care remains important to both investors and patients. We continue to search actively for new investment opportunities throughout the life sciences sector.
Q: There's a lot of talk in the valley right now about the memo Kleiner recently sent to investors, which said you and just four other managing directors will be in charge of all early stage investments. Why is it important for the firm to focus its resources like that?
A: My perspective is that change is good, and that the best venture firms are constantly evolving to meet the needs of their entrepreneurs. The focus of our venture funds at KPCB is primarily on Series A investments, which require a lot of company building in partnership with entrepreneurs.
We believe a smaller team will be more nimble and allow us to be even more responsive to entrepreneurs and their needs.
Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.