A good day and a bad day…
I am thrilled that we announced Stacey Bishop's promotion to Managing Director today. Having worked beside her for a decade, she has become one of my go-to people for all kinds of advice. She sourced two of our very best deals (Omniture & ExactTarget) and has a nose for the business, particularly SaaS and internet companies. Stacey is also someone I turn to regularly to discuss partnership-level ideas. She understands that we are running a business, too, and thinks about the care and feeding of a venture firm that is being built to last. I am really glad to be shoulder to shoulder with her going forward.
On the other hand, it's with a heavy heart that we are announcing today what many will see as even bigger news, that ScaleVP is shifting its full focus to investing in technology companies only. While we will continue to vigorously support our strong stable of healthcare companies, we won't be adding to the portfolio going forward. The partnership has discussed this for some time. The partners believe that the vagaries of the FDA and the resulting increase in time and capital needed to take these companies through to a real exit doesn't fit our mid-stage fund strategy any longer.
In fact, our team has been closely watching the regulatory environment in the healthcare field for years, and we are heartened by the dialog that is beginning to take place between our industry and the regulators. We will continue to be active in that conversation but think that the timing of a resolution that benefits emerging companies tackling important healthcare issues will be beyond our investing horizon.
This makes it a bad day for two reasons.
First, Lou & Mark helped found ScaleVP and are two of the savviest and personable investors I know. We like being together. I am glad that they will continue to be here as they manage their portfolio and share in broad partnership discussions. Lou's jokes in our Monday meetings are an important start to the day!
Second, it pains me as a venture capitalist and as an American that an important sector of our economy has moved out of our investing focus - all due to things that we cannot control or underwrite. We have had some great successes in healthcare from Seattle Genetics to IPC The Hospitalist Company among others. In the last four years, our companies have filed 7 NDA's; 5 of them have been approved and 2 are pending - something we are proud of. Unfortunately, they took longer and used more capital than planned from the start. While the decision to get out of healthcare makes sense for our fund and for our LPs, we are disappointed given the innovation and demand for healthcare solutions.
Our LPs continue to be great partners and have been supportive of our decision, our decision making process, and of Lou and Mark who they recognize have a lot to contribute to the partnership and to the broader industry.
I know that a decision like this is not unheard of, and it is also not a signal of the end of healthcare investing for VCs. Healthcare should and will continue to be a good place to invest for many of our peers who have earlier or later stage mandates. While healthcare investing is not the best course for ScaleVP, we want to recognize and support the dozens of excellent venture firms and friends that continue to invest in healthcare.
Please let me or any of us here at ScaleVP know if you have questions about the changes we've made. Our contact information is available on our bio pages. Thank you.
Originally published November 7, 2011.