More Not Less

Last week, multiple sources reported that Bob More, an experienced health care venture capitalist, started this month as the senior advisor for venture investing at the Bill & Melinda Gates Foundation.  Bob (he seems like the kind of guy you’d address by his first name) was  general partner at Frazier Healthcare Partners starting in 2008 following 12 years at Domain Associates, also as a general partner, as noted in the San Francisco Business Times and elsewhere (SFBT article).  As reported by Luke Timmerman, the Seattle-based national biotech editor for Xconomy who follows the Gates Foundation (Xconomy article), Bob had the following to say to his colleagues on his new role:

“My role will be focused on developing and executing a venture-capital initiative to support the goals of the Foundation, focused primarily on diseases that affect the poorest people in the world. … We want to encourage and support entrepreneurs to pursue ideas that will solve these problems. And we want our partners to flourish as businesses. … Entrepreneurs create markets where none existed before. The challenge we face is the ability of many people to pay for products and services. But that is often a challenge for which we are willing to bear responsibility for finding solutions. … And I am here because I believe that entrepreneurs can solve these challenges. My task, simply, is to focus the efforts of great entrepreneurs to achieve these goals.”

Luke also provided a list of the companies the Gates has invested in (the Gates does not):

Company Total Invested Date(s) of Investment
Atreca $6 million 2012
Genocea Biosciences Part of $30 million 2012
Liquidia Technologies $10 million 2011
Visterra Part of $13 million 2012

As some readers may remember, I have been posting on the Gates Foundation’s potential to make investments (rather than grants) in companies developing products with global health applications and criticizing the few investments that it has made.  Actually it looks like I’ve posted once each year since 2010, starting with “PRIs for Global Health”,” followed by “BMGF Ventures LLP”, “A Toe in the Water”, and “Nothing Ventured” in 2011, 2012, and 2013, respectively.  My general criticisms included:

  • being a participating co-investor rather than leading the charge as a led investor;
  • investing minor amounts of money (as little as one-fifth of what the other investors bring to the table) resulting in little influence;
  • not taking a board of directors seat resulting in very little influence;
  • not vetting the technology for its application to global health nor publicizing the company’s commercialization plan for a global health product;
  • not having an announced investment strategy; and
  • not having a transparent process for submitting business plans relying instead on the Gates old-boy network.

My amateur’s advice to the Gates investment team on stuff they need to do was:

  • do thorough technical, competitive, and risk assessments (to be sure the Foundation is not being scammed);
  • figure out how to work with the other investors with whom it will not be in complete alignment (the Foundation will measure its return on investment in both monetary and non-monetary terms);
  • learn how to influence the company as a later-round (less leverage) and physically distant (less communication) investor;
  • have its board of directors representative understand start-up companies and the biotech/pharma industry;
  • have a clear understanding of how the product will be commercialized and made accessible in both major and rest-of-world markets;
  • have an exit plan if the company or product is acquired;
  • figure out how to track and respond to the progress (or lack of) by the company toward its global health-related objectives; and
  • assure the IRS that its investment is aligned with its charitable mission.

A bit disconcerting was that the Foundation apparently did not feel that Bob More’s appointment was worthy of a press release and that I could not find any information on the Foundation’s “program related investing” on its website as I had before.  So the bottom line is that Bob has his work cut out for him but seems to be up to the challenge.

 

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