A venture capital panel at Health 2.0 conference in Santa Clara, California, brought together corporate venture capitalists with a traditional VC who shared their pet peeves and what they wouldn’t invest in.
First up Ruchita Sinha, senior director of investments at Sanofi-Genzyme BioVentures, the venture capital arm of drugmaker Sanofi. Sinha explained that she is less interested in technology and more in the actual problem that entrepreneurs are alleviating.
“I have a personal pet peeve against Platform XYZ solution — you are a platform AI solution; you a platform blockchain solution. That’s great. Tell me what the problem you are solving,” she declared. “Personally, I am very much a paint point investor. I don’t care how you solve it, as long as you solve it. You can use whatever technology you want.”
Sinha added a lot of entrepreneurs flip it around — start with the technology and then try to find a problem that could be addressed using that tech. And that, she implied, is a mistake.
Seated next to Sinha was Iana Dimkova, director, GE Ventures who articulated that she wasn’t interested in b-to-c plays in healthcare.
“While I do believe the consumerization of healthcare will happen, we’re not really looking at clinical products that are going directly to the consumer,” Dimkova said. “Unfortunately, there’s been a ton of money that’s been spent and so far there’s not really a business model to emulate. It turns out that most people really don’t want to pay for health out of pocket. It’s not something they look for. If they have a real issue, they still go to the doctor.”
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.
She added that eventually, she does believe “consumerization of healthcare will happen” but it’s not something GE Ventures is willing to bet on now.
Seated next to Dimkova was Abhishek Sharma of Nexus Venture Partners, who is unattracted to business-to-business models in healthcare.
“The entity or incumbent that [entrepreneurs] are selling to – their doors are sort of jammed,” he said. “You want them to open very fast but they won’t open that fast. More and more I am staying away from b-to-b startups that are selling to incumbents — payer, provider and any of those stakeholders.”
Sharma explained that on the contrary, he wants to work with bright, ambitious entrepreneurs that are looking to turn current models of healthcare on their heads entirely.
These three VCs have very different perspectives and maybe even be contradictory investment philosophies, but that essentially means entrepreneurs must do their homework before approaching investors.
Photo: prachanart, Getty Images
