Transcript
Speaker: Hi, everyone, and welcome to Spark Time. I'm Dani Stoltzfus. And I'm Will Riddle. Of Mighty Spark Communications. Our mission is to use scientific innovation to drive transformative change. We believe that compelling storytelling is the most effective tool we have in our arsenal to motivate and inspire audiences to invest themselves in audacious goals. We are scientists by training, storytellers by experience, and entrepreneurs by nature. Let's get started.
Speaker: So I loved this conversation with Garrett. I still feel exhausted thinking about all the different directions he has pursued in his career. He gave us a lot of DC investor insight, especially with respect to what to do if you can't get warping tourist investors, which is something that, well, I hear people complain about all the time. So hopefully this is added value for anyone who's struggling with this.
Speaker: Yes, for sure. For me, I really liked how he talked about the pattern recognition of a CEO -investor interaction, and that's not just because I studied pattern recognition receptors during my PhD. So it makes total sense that the conversation goes a lot more smoothly if the CEO demonstrates the right patterns. Of course, investors like Garrett are savvy about first -time CEOs, though, and he told us a bit about how he thinks of conversations with people in that situation.
Speaker: All right, let's tune in. Today we're joined by Garrett Vigantis. And Garrett is founder and managing partner of Riverine Ventures, a life science and health care dedicated venture capital firm. Before founding Riverine, he's invested on behalf of OSF Ventures, Jump Capital, and Burrell & Company. He's also the founding CEO of Theroptics, Newbridge Pharmaceuticals, and MITRE Medical. Earlier in his career, Garrett helped launch Lusantis at Genentech and worked on the health care investment banking team at Cohen & Company.
Speaker: He earned his MB and his MBA degrees from Georgetown University and completed his residency at the University of Pennsylvania. He's a Kauffman fellow and mentor at the Center for Venture Education and has served on numerous not -for -profit boards. Like I said, welcome Garrett and we're really delighted to have you here. How are you today? I'm good. Thank you so much for having me, Will and Danny.
Speaker: Yes. Yeah, of course. You're most welcome and we're excited to talk to you today. So after hearing your bio, I mean, I'm convinced that you must never sleep. So tell us about your journey to becoming a physician and investor as well as an entrepreneur.
Speaker: Sure, happy to share my career path thus far. So I grew up in a family of scientists. My mother was an organic chemistry professor and my father was a retinal specialist. So I was always surrounded by science, whether it was
Speaker: retinal angiograms or carbon models that were laying around with our toys. So it was always going to be a career in science. And when I finally decided on human health versus veterinary, which was also in contention for a career choice, I really dove into understanding the
Speaker: the both the physiology as well as the pathology around the human experience. When I matriculated to medical school, I distinctly remember during pathology class, thinking about all the potential solutions to the problems as we were learning about them and what they could potentially do to help humans. And so as I was learning about diseases and
Speaker: the innovations that could alleviate the burden on human suffering. I also started to get an understanding of what it takes to bring solutions to the market from idea to bench to then bedside is the trajectory there. And so I really
Speaker: developed an understanding and an experience set across the different stakeholder groups to learn how that process comes together. That entailed then pursuing a degree in business. I received my MBA at the same time as I did my medical degree. And then completing my medical training, I then decided to go into industry to really understand then how the engine works, how the machine works in getting
Speaker: technologies developed and then introduced to the ultimately in front of the patients through the markets. So that journey brought me to where I am today. I have been investing as well as building companies, always at the intersection of medicine and technology. And now where I am in my career, having the ability to leverage my network and my track record to then help the next generation of entrepreneurs achieve their goals.
Speaker: Yeah, that's a really, really incredible experience. I mean, you have a wealth of knowledge from so many different sides of the equation of getting a drug from bench to bedside. And so really cool to have you here. And I think we can really dive into your experiences as an investor, but also an entrepreneur and also a physician. So very exciting.
Speaker: So I think to start with, maybe we can talk about your experiences as an investor, and then we can sort of get into how that compares with being the entrepreneur on the other side. So one of the things that we like to talk about a lot, of course, is a compelling narrative that drives investment behind groundbreaking ideas. And so we sort of think of the spearhead of telling that story as being a pitch deck or a corporate deck.
Speaker: As an investor, when you're in the room with a founder, what are some of the things that you want to see to engage further with that founder? If there were a top three list, what would those things be? Yeah, absolutely. As you were posing that question, I was reflecting on one other part of my
Speaker: my career, you know, when I was trying to decide which specialty to focus on, I love them all. So I really couldn't narrow it down to one specific practice that I would then commit the rest of my life to. And what I learned was that being an investor allowed me then to really hone in on my intellectual curiosity around a variety of different diseases, disease states, and then solution sets.
Speaker: So i reflect on that as i answer the second question which is. Looking at the the entrepreneur sitting across from me does this person have that same intellectual curiosity and drive most likely they do if they're working on a novel idea.
Speaker: to then address on that medical need. As I think about where this individual is in their journey on getting the solution ultimately to market, I do look for specific areas of deep understanding.
Speaker: And that comes across in their ability to then articulate that in a impactful story, as you say, and I agree with. First thing I look for is whether they really understand the market that they're looking to address. So not only from a physiological standpoint, from a addressable market standpoint as well. Does the individual have a sense on how big
Speaker: the number of patients is and how that can translate into hard dollars, return on investment. And then the two sub sectors underneath that are the total market and then the addressable market. So there's a nuance there in terms of taking that to another layer, a deeper layer.
Speaker: You know, how could that product or technology then compete with the standard of care as well as with the products that are in development? And it's that second part, an understanding of what others are working on and how that solution still could compete against those is where it's also
Speaker: reassuring and validating to know whether this entrepreneur has done their homework, really taking a deep dive on understanding precisely how their solution could compete in a very competitive marketplace. So those are probably more than three, but I think you could summarize the three points are the understanding around the market, the addressable and total market.
Speaker: And then how their solution fits within the competitive landscape, both current and in development. So I guess those are two. So the third would be also the management market fit. So entrepreneurs usually have a background in the area that they're going to be
Speaker: developing their product in, if they don't, how well have they surrounded themselves with advisors, with consultants, with other team members that can then compliment that, round out that requirement to really understand the market, and then secondly, understand the product development requirements, whether it's a software product of medical technology or
Speaker: or a therapeutic. Those are the three top categories I look for, and those come across pretty quickly in a presentation. Yeah. Do you think that when you're watching a group of founders present their deck that these things always come across? I mean, this is a lot of information that you just described, right? Yeah. Yeah.
Speaker: That's a great question. Do they come across, you know, never as organized as I usually like to see, but that's fine. It's up to me to dig through the information and find it within the presentation, right? It doesn't have to be as straightforward as a chapter, you know, a table of contents in a book or anything like that, but it has to be at least identifiable as I do my pattern recognition.
Speaker: in my initial screen to understand who I'm sitting across from how well they know the market. Often, funds won't invest in first -time CEOs. We're not that same way. At Riverine, we understand that
Speaker: first time CEOs often have a different phenotype and often have the required phenotype to take on that risk and commit their careers, at least that stage of their careers, to getting that next phase, that financing, that product development, reduce the risk around the vision and achieve milestones that can then
Speaker: allow further investment. So usually that's a long -winded way of saying that
Speaker: that information oftentimes in seasoned executives comes across a little bit more crisply in seed and earlier rounds of investment that we also participate in, that may not be as clearly delineated in the early discussions. And hopefully with the guidance that we give the entrepreneurs as we honestly really want to help them in any way that we can,
Speaker: Hopefully, they'll come back to us with iterations on that and show us that they've taken our feedback, which will hopefully help them not only in our conversation, but other investor conversations as well.
Speaker: That's really interesting and I'm going to dissect that a little bit. It sounds to me like you're often getting all the information that you need in the pitch deck that founders may share with you, but perhaps it's not clearly articulated and presented in the most efficient, digestible fashion. We see that a lot with the clients that we work with is that they have all the information and they know exactly what they need to tell you.
Speaker: But it's not put together in the most coherent, time efficient, digestible format. So, you know, very familiar. It's an art and not everyone has the ability to do that. So I really like that you take the time with Riverine to help companies get there as they are on their journey. That's really valuable. I really resonate with that concept of helping people do that.
Speaker: And let me go on that a little bit further. Those messages, those core messages change over the life cycle of a company. Yeah, definitely. So I actually did a stint on Wall Street as well at Cowan & Company, and I finally
Speaker: learned also the capital formation messages that were inherent in an S1 filing or an M &A proposal. And those are vastly different than a seed series A discussion that is bringing investment to a company at that stage in their lifecycle. So it's a
Speaker: It's a requirement that the leadership of a company tailor their messages to their audience who they're speaking with. And I think at the earlier stages, it's much more about vision and passion, but you have to have that grounding in the business of the
Speaker: of the overall enterprise to really bring in the sophisticated investor that will be required to get the product developed. These are often capital intensive pursuits and achieving financing rounds is hyper competitive. So those messages need to be in there. That evidence of understanding needs to be in there at some point.
Speaker: Yeah, and one way that Will and I like to describe what you've just talked about is that not only do you have to have a vision if you're an early stage company, but it also has to feel both tangible and realistic. So that sets stage for a strong foundation for the company to grow forward. And it sounds like you have the same thoughts on that.
Speaker: Yeah. Yeah. Getting into the next layer on where our capital will be used to really de -risk and achieve milestones is, I guess, the next category of discussion. How well has the development plan been thought through? Where have the risks been identified? We certainly have our own understanding of where the risks are. It'd be very helpful to have
Speaker: management articulate theirs and then how those may be mitigated so that all of the risk isn't concentrated on one experiment. If that experiment doesn't come to fruition, what is the backup plan B and backup plan C? Because as we know with science, there often is iteration that's required and that needs to be thought through before you start even the first experiment.
Speaker: Yeah, so now I want to take the next step with this and let's assume that you've seen a pitch deck, you've potentially had an initial call with the company and you like what they're suggesting, you like their idea. What other information about the company in terms of online presence, their website, their LinkedIn, do you seek out in order to decide if you want to engage with that company further aside from the pitch deck? Sure, sure. Well, I'll often
Speaker: Consider where I got the introduction from, whether it was from an entrepreneur we have worked with in the past, a friendly introduction from another investor, or the entrepreneur was able to hook me with a point of interest in my background that really caught my attention. So rather than just focus on the,
Speaker: The project that that company is working on, I'm talking to the initial hook to get my attention from the dozens of requests for meetings that I get. I think a good way for entrepreneurs to get my attention is, and other VCs' attention is,
Speaker: to bring up experiences that that VC has had or successes or even current portfolio companies and find a tie back to what they're working on. So something along the lines of, I wanna learn about company X. I see that they did Y and that's an area that we're looking to take advantage of as well. So that really creates that hook and then brings the attention to
Speaker: the entrepreneur's company. So that's one of the suggestions that I would have. But as it relates to then where I would go, certainly online presence is critical. Is the information articulated clearly on the website? Some of these early stage companies are by choice stealthy, right? So they don't wanna put too much information out there, which is fine.
Speaker: But at the same time, there is a basic level of due diligence that needs to be available for investors like myself to understand what the backgrounds of the team members are that are working on the company. And that can easily be sourced through LinkedIn as well as through reference and background checks amongst the entrepreneur and investor community.
Speaker: So I think that answers some of your questions. I know I introduced another point there as well, but I'll pause here to see if I got that across. Yeah, those are great responses. And I think you were getting at a question that I wanted to ask you, which is, we hear all the time, and I'm sure you hear about this as well, is that
Speaker: people who have founded companies have great ideas and they're so excited about them but they just can't get the investor meeting or they can't get an investor to call them back. And one thing you mentioned is of course the warm introduction. That's a classic way to get the attention of an investor.
Speaker: And I think you mentioned that one move is to go back to the investor's past and look at successes that they've had or things in their own personal history. And I think that's really interesting. I think our listeners are going to be really excited to hear someone boil it down. But I'm kind of curious.
Speaker: That's an example of something that's great, but what's an example of a mistake that founders make with these interactions and why they don't go so well all the time? Will, are you talking about the initial outreach? Yeah, that initial outreach. The easiest answer to that question is based on investor
Speaker: not being a good fit for the entrepreneur's company. First of all, is the market segment, broadly speaking, healthcare life sciences, a focal point for that investor? Well, that's an easy answer to get to from online presence. Hopefully, that would be the
Speaker: the first place to turn due to clarify that, but then taking a look at the profile of the investor that you're targeting. And that gets to that point also is the investors that you want around the table are the ones that actually have experience in the sector that you're working in, right?
Speaker: It's not as helpful to you as a company leader to have investors that don't really understand or can add value beyond a check. Of course, as an entrepreneur, you have to flip over couch cushions, get money anywhere that you can to get your company moving forward.
Speaker: But I think it's those value add investors that can then open doors to other value add investors in the space. So really targeting your investor outreach for investors that have that experience set that really can help you achieve your goals. I think that's critical, whether it's in therapeutics, again, and then driving deeper into therapeutics. What types of modalities have they worked with? What types of disease states
Speaker: have they invested behind companies developing solutions. So that's really where that upfront work needs to be done. And it is tedious, but it should ultimately be more productive as it relates to getting those critical first meetings, second meetings to get the rounds done.
Speaker: Yeah, I mean, it kind of comes back to the concept of know your audience, right? So before you even have the conversation, you need to know that your audience is going to be interested in what you have to say, which, you know, makes a lot of sense. And, you know, I totally understand that it's a tedious process, but it sounds like it pays off. Well, if you do spend the time to do that working, you can get the right audience to get those initial conversations happening.
Speaker: Yeah, the probability goes up. Yeah. It's very hard anyway, but the probability goes up.
Speaker: Yeah, so different question now. We know most of the time that biotech investors are primarily interested in data. Have you ever seen a company successfully get investment without having a data release that goes with that, whether it be clinical or preclinical data, or set a different way? Do you really think that the scientific narrative of the company can drive investment, especially at the early stage?
Speaker: Yeah. Yeah. Where data is not yet available. Yes. Exactly. Yeah. Yes. It's probably the right of passage for every company to go through that stage where they don't have data and still are able to achieve the next round of goals to then, you know,
Speaker: create more validation, more evidence, and attract more capital. I think there's a few tricks that can be done. So one is, in addition to the scientific and clinical rationale, I think companies can be creative in leveraging other companies' data. So to say, company Y has shown this, and hopefully company Y is successful.
Speaker: and a well -known and established brand that has greater returns for investors. So using a competitor, a larger competitor's data as validation for the project that the company is working on. That might be a creative way to then leverage, again, data that you don't have that could be viewed as similar or validating.
Speaker: The other is to talk about partnerships. So if the company is lucky enough,
Speaker: to have big pharma partnerships, any partnerships for that matter, that serves as a validation as well for investors. And then the third layer of that is grant money. So somebody has reviewed the grant application, found it worthwhile, and that can also be leveraged to, again, build validation within the
Speaker: within the project in the eyes of the investor. So those are the three areas I would recommend. Yeah. So essentially all different ways to demonstrate the company has traction towards their goals, correct? With external parties in all three of those categories. Oh, actually two of the three of those.
Speaker: Yes. Yeah. Really, really valuable advice. Yeah. So Garrett, I'm curious in your life, your professional life, what are you excited about in 2024? Is there anything that you want to plug that you have going on? Yeah. Well, I'm excited about a return to interest in the biotech space in general. How are we all? How are we all?
Speaker: The Wall Street Journal article headline may have been a little bit misleading to say that the generalist investors are piling back in.
Speaker: Um, probably not the case, but, but creating some liquidity through a return on the public side will trickle down all the way to early stage, which is where we play. Yes. Um, so, so that is an optimistic viewpoint. Um, and the other is, you know, from a, from a clinical and market viewpoint, we're getting more and more successes in new modalities of therapy, whether that's.
Speaker: ADCs or with cell and gene therapies. There's some real excitement around the clinical impact and that's where we really focus our time is understanding the clinical impact and how that can directly relate to
Speaker: financial impact. So those evolutions are turning now, and it's going to be up to those early pioneers that have launched products with these new modalities to really prove their case to the payers and to the decision makers around adoption of new technologies. So that's on the therapeutic side. And we're also seeing very interesting developments in other areas of medicine and healthcare. So our fund broadly invests in precision health, which
Speaker: precision medicine for that matter, which includes care delivery and a category we call machines that have a diagnostic element to them as well as a therapeutic element to them.
Speaker: So in all those cases, you're seeing a convergence of technology focused on driving solutions for unmet medical need and some really creative and innovative ways of getting to alleviating disease burden. So broadly speaking, the pace of adoption of those technologies or at least development of those technologies is fascinating to be a part of.
Speaker: It's hard to even keep abreast on all of the developments, but certainly that's why we're in this business. We love seeing and being a part of that creation of solutions.
Speaker: Well, I love to hear your enthusiasm about that. And I love that you're excited about it as well. It sounds like you're going to have a very busy and interesting 2024. So that's, you know, we're really optimistic for what unfolds out this year as well. So really nice to hear your thoughts on that. And I guess the last thing I really would like to ask you, and we love to ask all of our guests this question, is
Speaker: If you could give one piece of advice to a management team of an early stage biotech company, what would it be? Absolutely. This is a very challenging question to answer, given how many obstacles are in front of a management team that is dedicated to their cause and yet is faced with
Speaker: restrictions around their resources. So I guess the one bit of advice that I've learned from others that really resonates with me is focus on the white hot risk. And so whether that's on the product development side or on the preclinical side, or then, you know, if you're fortunate enough to be in the clinical part of your development lifecycle,
Speaker: really understand what the critical question is and how your next set of endeavors will address that question. And one at a time, that white hot risk changes with each turn of the card. And then bringing in investors that understand and agree with that as the driving point of
Speaker: of risk reduction in the company, of validation to the program, bring those in and take in capital to then
Speaker: you know, achieve those goals. So, so that would be my, my one point to bring up, you know, obviously there's many others, take money every way and any way that you can arch your front door. Don't bring people into the company that you aren't ready to commit, you know, your life and their life, um, to from a, um, career professional standpoint, um,
Speaker: Yeah, those would be the areas that I would give advice to.
Speaker: Yeah, Garrett, that's a great response. And it's really the question that never expires because it is a challenging question. And so that's why we always ask it. And I just want to say thank you so much for coming on the podcast and sharing all this wisdom. I think our listeners are going to find everything you said very helpful and really appreciate it. Yeah, it's been a lot of fun. I think what you guys were doing is great also. One other point I would
Speaker: I would highlight is bring in experts that are, as an entrepreneur, bring in experts that are able to offload some of the critical elements around your storytelling and your messaging in a way that you don't have to rely on your own scrappiness to try to get that across. So I've seen your materials and I'm very impressed with the way that you present.
Speaker: your story around Mighty Spark, and I think you guys are gonna do great things as well. In fact, I'm very glad that I got to know you during this process. I'm thrilled to have you now as part of my own network of resources to bring to my own entrepreneurs. Wow, thank you so much, Garrett. My pleasure.
Speaker: I really enjoyed hearing Garrett's advice to focus on the white -hot risk in terms of a company's vision. Of course, in doing so, you'll need to find the right partners who support this huge challenge that this will bring. But it's exciting to hear that investors are hungry for this type of activity. I know we've talked about this concept before, but bringing in investors like Garrett who can add value to the company is really key.
Speaker: Yes. And we will keep repeating that message. Another message reinforcing is the one around bringing in experts to handle aspects of your storytelling and messaging so that you don't have to rely on your own scrappiness. And obviously that's what we're here for. Another aspect of the conversation that I really enjoyed was how to handle the early days of speaking about your company when you don't yet have data. Leveraging competitors' data is a really elegant solution and I really respect that.
Speaker: Totally. I hope our listeners enjoyed hearing Garrett's perspective on communications as both a VC as well as a founder. As we said, we're here to add value to your storytelling and messaging, and we'd welcome anyone who wants to continue the conversation with us. So join us next time as we continue to power scientific innovation with storytelling to drive transformative change and solve our most demanding challenges.
