From left to right: Paul Yook, general partner, LifeSci Venture Partners; Jack Gilbert, director, Microbiome Center, University of Chicago; Ilan Zipkin, senior investment director, Takeda Ventures; and Ed Mathers, partner, NEA
You have this breakthrough invention. You know it will change the world.
But passion alone isn’t enough. You need moolah to fuel your innovations. And you think you’ve done everything you can to get a particular VC’s attention. You have called and emailed. And emailed and emailed.
In return, there has been zip, zilch nada.
One attendee at the MedCity INVEST conference, which kicked off Wednesday in Chicago at the Four Seasons hotel, decided to get to the bottom of the radio silence on the part of VCs.
After a panel discussion on biopharma investing, Roger Anderson, vice president of investor relations at Eliaz Therapeutics, put speakers like Ilan Zipkin, senior investment director with Takeda Ventures and Ed Mathers, partner, NEA, on the spot.
Why won’t you return emails, he asked them.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The answers from Mathers, a traditional VC, and Zipkin, a corporate VC, shed light on both the basic homework that entrepreneurs need to do before they fire off an email, but more importantly, the fact that that email of yours is actually going to more than just that VC you contacted.
Mathers provided the simple short answer to why VCs hit the delete button on emails from startups: if it’s not an area of that particular investor’s interest, you won’t get a response. So if you are looking for an answer, research the investor before you pitch.
Mathers was direct and to the point when he explained that the area of interest is paramount. At the StartUp Health Festival in San Francisco in January, healthcare investor Vinod Khosla had put it in more colorful terms.
“Healthcare startups I hate are the ones who help people increase their billing. Zero value-add from my point of view. I am uninterested. Not that it’s a bad business. People will make money at it.”
Zipkin of Takeda Ventures took a more nuanced approach at MedCity INVEST. After first apologizing in case he didn’t respond to an email that Anderson may have written to him, he implied that emails don’t occur in a vacuum.
One action that a corporate VC like Zipkin takes once an email reaches his inbox (even if the email comes through a known channel — a person that Zipkin knows and is friends with) would be to send off an email to Takeda’s research and development department.
If the R&D department responds saying this is a therapy area that they are working on or are interested in, that would prompt Zipkin to respond to the original email from the entrepreneur. If not, the email’s fate is doomed by the delete button.
That’s what Zipkin called the “food chain of returned emails.”
Later in an informal chat, Anderson of Eliaz Therapeutics said to MedCity News that he was prompted to ask the question to the panel after an experience at another event. There, a particularly incensed entrepreneur grew increasingly personal accusing investors of not responding to emails.
He noted that it’s important that entrepreneurs understand that VCs have pressures too such as from limited partners who hate losing money on deals and to whom VCs have to answer to.
Photo: Nohemi Moran, MedCity News
