All posts by Bryan Roberts

Bryan joined Venrock as a Kauffman Fellow in 1997. He is based in Venrock’s Palo Alto office and focuses on a broad range of healthcare investments. Bryan is currently Chairman of the Board of Directors of Achaogen, Castlight Health, and Ironwood Pharmaceuticals (NASDAQ: IRWD), in addition to serving on the Board of several other private companies. Past investments include athenahealth (NASDAQ: ATHN), Illumina (NASDAQ: ILMN) and Sirna Therapeutics (acquired by Merck). Bryan was named a Henry Crown Fellow by the Aspen Institute in 2006 and has been the highest-ranking healthcare investor on Forbes' Midas List since 2008. Immediately prior to joining Venrock, Bryan received his Ph.D. in Chemistry & Chemical Biology from Harvard University. He previously held positions in corporate finance at Kidder, Peabody & Co and received his B.A. from Dartmouth College.

The Anticipation of a Journey

We closed Venrock 8 today. It is a(nother) $450 million fund which feels, for us, a bit like the littlest bear’s bowl of porridge—not too big and not too small, but just about right. We expect to follow a similar strategy as we have for the last several funds—finding great people addressing substantial needs in ways that most of the world thinks will not work. These investments will end up being made in a likely surprising variety of companies across technology and healthcare. We have nearly always invested in first time CEOs – people like John Stuelpnagel of Illumina, Jonathan Bush of Athenahealth and Matthew Prince of Cloudflare; and backed them pre product-market fit, when the likelihood, timing and scale of success is hard to pin down. We expect these traits will continue in Venrock 8.

We continue to believe that there are some really interesting problems to tackle, and therefore some very large businesses to build, but that is all in the future. Thus far, we have only taken on the responsibility of a large sum of money from people who are counting on us to return multiples of it, so that they can continue their work supporting a wide array of wonderful programs and causes.

As a result, I have to confess to being a somewhat reluctant blogger on this topic, as we are really at the beginning of an arduous journey towards a tenuous goal, more so than at an end, worthy of celebration. Given the current low return environment across most asset classes globally, recent venture performance has attracted a substantial oversupply of capital. For us and many others, this makes fund raising a reasonably efficient process, but does nothing to decrease the weight of responsibility placed on the firm. And, it means that we have to be even more insightful or early or proprietary with investment opportunities. Appropriately, our close-knit team feels more of the anticipation and nervousness of embarking on an all-consuming effort— to improve ourselves, focus on long term company success, and do our best for entrepreneurs 24×7— than the joy of successful completion.

As a team, we know how fortunate we are to sit in these seats, bearing witness to the formation of so many companies, led by extraordinary people with noble ambitions. We take the responsibility seriously, both as stewards of others’ hard-earned capital and as hopeful catalysts of a better world.

Running Through Walls: Grand Rounds CEO on healthcare startups and hiring

In this episode of Running Through Walls, I caught up with Grand Rounds CEO and co-founder Owen Tripp, one of the first successful technology entrepreneur crossovers to the fight against complexity and confusion in healthcare.

Prior to Grand Rounds, Owen co-founded Reputation.com and grew the company into the worldwide leader in online reputation and privacy management.

We talked about Owen’s goal to make everyone a medical insider, how they maintain a transparent culture and what he loves about Millennials. Owen also revealed his weakness in evaluating candidates and we discussed the prominence of women in healthcare IT. 

Why tech entrepreneurs are starting healthcare companies (3:16)

Why not to hire the overnight-success seeker (7:28)

What’s great about the Millennial generation (8:56)

Gender diversity leads to better decision-making (11:05)

Keys to maintaining transparency in a growing organization (12:22)

Key links:
Gender diversity study
The Boys in the Boat by Daniel James Brown

 

Lyra Health: Tackling Behavioral Healthcare

By Bob Kocher and Bryan Roberts

Chances are, you or someone you love has faced a behavioral health issue that required help from a professional. Many of you, though too few given nearly 70% of people in need go undiagnosed and untreated, then found yourself attempting to navigate the system to identify the clinicians and services to match your needs, only to encounter a fragmented maze of information that is not specific, actionable, or up-to-date. With 50 million Americans suffering from behavioral health conditions – anxiety, depression, substance abuse – this is a massive problem. A massive problem that also leads to needless medical costs and complications for patients with untreated behavioral health conditions.

Today, Lyra Health emerged from stealth mode, with seed funding from Venrock. This company lies at the intersection of two of our favorite things: killer teams and large, difficult problems. Led by David Ebersman, Lyra is bringing together terrific talent from Castlight and LinkedIn to transform behavioral health to better serve patients, help patients get better faster, and to learn from the experiences and outcomes of each patient to benefit future patients.

Health IT has been booming recently with much of the focus on lowering healthcare costs by helping patients with chronic diseases get better medical care. Unfortunately, over 35% of these patients also suffer from behavioral health issues, which materially impedes the efficacy of their medical care, while dramatically increasing the associated costs. Working on improving behavioral health for them, as well as the millions of others who suffer from primary mental health issues, will improve health in these patients and spare billions in costs.

Lyra is going to change how people access and participate in their behavioral healthcare. The company will use software and service to bring the best solution to those in need. With each encounter, Lyra will get better at matching patients to providers, learning which approaches work most effectively, and when to intervene if patients are not improving. Like many of our other health IT investments – Athenahealth, Aledade, Doctor on Demand, Castlight, Grand Rounds, Stride Health, Zenefits – Venrock is lucky to partner with amazing entrepreneurs at the company’s formative stages in order to create a product and service that can help so many people.

 

 

 

 

 

Venrock 7: Looking Back & Forward

Last week, we completed the fundraising for Venrock 7, a $450 million pool of capital to deploy as we partner with some terrific entrepreneurs to build great technology and healthcare companies. The establishment of a new fund feels like one part cause for proud announcement and 99 parts assumption of a decade or more of responsibility to relentlessly strive for excellence for our two crucial constituencies – the founders, entrepreneurs and teams in whom we invest and the limited partners who have invested in us.

Venrock got started, depending upon how you look at it, either 76 or 45 years ago.  In 1938, Laurance Rockefeller started doing what we would today call venture investing when he provided the initial capital for both Eastern Airlines and McDonnell Aircraft.  Laurance continued making a new investment or two each year for the next 30 years, at which time the financial construct of venture investment vehicles led to the creation of some of the iconic early venture firms, Venrock among them. “Fund” numbers in this case are a bit misleading in terms of history as, in addition to 30 years of Laurance’s checkbook, Venrock 1, whose portfolio included companies like Apple and Gilead Sciences, was an evergreen fund for the Rockefeller family that invested in new companies over a 30 year period, rather than the 3 – 4 year new investment period that is typical today.

While our core mission and values – to generate great returns by partnering with world-class talents to build businesses that change the way we live – have remained remarkably consistent, most everything else has changed over time.  The areas of compelling investment, the depth of partnership and involvement with entrepreneurs and the competitive dynamics of the ecosystem are nearly unrecognizably altered.  With each of these Darwinian “opportunities” to evolve (and the terrific legacy of Laurance Rockefeller and the early Venrock partners as the standard to which we aspire), we reinvented the Venrock culture and investment team over the last 10 years.  Change and continuous improvement will absolutely be an ongoing effort, but today we are a cohesive, “do the right thing” focused team intensely committed to our partner entrepreneurs and LP’s.

We’ve enjoyed some recent success, though certainly not as much as we hope to create in the future. We have been an investor in eight companies with $1B+ exits over the past five years and, in 2014, have had five IPOs and five M&As, including Castlight Health and Nest. The current portfolio holds promise across a variety of industry sectors – AppNexus, Ariosa Diagnostics, CloudFlare, Dollar Shave Club, Grand Rounds, and Intarcia to jinx only a few.

Going forward we are really excited about what’s happening at the intersection of healthcare and technology, as the opportunity to dramatically remake our healthcare system attracts a quality and breadth of entrepreneurial talent that is truly staggering.  We have doubled down in New York to take advantage of the increasing opportunities in the very fertile, growing New York startup ecosystem. We also see data-driven solutions bringing true value across a spectrum of use cases as massive amounts of data are finally corralled and synthesized to produce real insights and ROI. And we are always trying to keep an eye on what’s around the next corner, experimenting and exploring to latch onto the next interesting area for innovation and growth.

I like our odds, but building companies is hard work. We will catch some breaks and will definitely lose some.  We will make mistakes and do our best to minimize their repercussions – that’s a lot more productive than trying to avoid them all together.  But most of all we will devote ourselves to partnering with really passionate, visionary entrepreneurs and serve them in any way we can to give them an unfair advantage on their road to success.