In the latest episode of "20 Minutes VC," host Harry Stebbings interviews Peter Parker, the managing partner at Bioinnovation Capital, a $130 million fund dedicated to transforming life science investing by backing companies in shared labs across major U.S. cities. Parker, a venture industry veteran, shares insights from his extensive career, starting with Ampersand Ventures in 1986, and later co-founding Lab Central, a shared biolab space for startups. He discusses the evolution of the venture ecosystem, the importance of clear goal-setting for startups, and the unique challenges and strategies of investing in life sciences. Parker emphasizes the significance of LP relationships, the art of pitching, and the necessity of process and alignment within venture firms. He also highlights a recent investment in GraphWear, a company developing a wearable glucose sensor, showcasing his continued passion for supporting innovative solutions in biotech.
"It has been a huge thank you to everyone for your support over the last week. It really has meant so much to me."
"Now our guest today is simply incredible. He's a true veteran of the venture industry."
"He started in VC ten years before I was born. Just last year, 32 years into his time in VC, he raised his latest $130,000,000 fund."
These quotes show appreciation for the audience's support and set the stage for introducing Peter Parker, emphasizing his long-standing and successful career in venture capital.
"For the past three decades, Peter's devoted his life to venture and startups, starting in 1986 with his establishing Ampersand Ventures Life sciences platform, which he managed until 2006."
This quote summarizes Peter Parker's extensive experience and contributions to the venture capital and life sciences sectors, highlighting his early start and long-term dedication.
"And I realized that all the research had been done on innovation by teams... That really energized me. And ever since then I've been very, very focused on entrepreneurs in any way I could be."
This quote explains Peter Parker's epiphany about the significance of team-driven innovation and his subsequent pivot towards entrepreneurship and venture capital.
"You could almost know everyone in the industry. So you fast forward to today. I mean, there's just so much money, so many more firms, and what I think has changed a lot is specialization."
This quote reflects on the dramatic growth and transformation of the venture capital industry, from a small, interconnected community to a diverse and specialized landscape.
"The reason I came back to it because I saw an opportunity to do something in life sciences that has never been done before... It's become such a powerful model that I felt it was just a lot easier to form this firm, go out and fundraise for it."
This quote describes Peter Parker's innovative approach to life sciences investing and the creation of a new model that made his second venture firm's fundraising process more effective.
"Not so much. It's actually interesting. We have exactly the same number of partners, five that we had at the time we formed fund one."
This quote provides a glimpse into the continuity and changes in partnership structure between Peter Parker's venture firms, indicating a consistent approach to team size while acknowledging the different circumstances under which each firm was established.## Venture Fund Experience and Process
"I think process is almost everything in good venture firms. If you get under the hood of any firm that you really respect, I think you'll find a very, very detailed process, even though it looks chaotic."
This quote emphasizes the significance of having a well-defined process within venture capital firms, which is a key determinant of their success and is often not visible from the outside.
"So it's hard. You've got five partners and they have very different points of view. Often on investments. It's a lot easier down the road, because it's not a question of whether these companies are going to get into trouble, it's just a question of when and when they get into trouble. You have to be all pulling in the same direction..."
Peter Parker explains that unanimous decision-making is difficult due to differing opinions but is beneficial in the long run when companies inevitably face difficulties, as it ensures unity among partners.
"We're also tolerant. We're a new fund pioneering a new platform. We're very much a startup, too."
Peter Parker describes the fund's approach as tolerant and open to new ideas, likening the fund itself to a startup, which allows for flexibility in their investment decisions.
"My view of the world is we're middlemen, it's their capital, and we're finding great places to put it."
Peter Parker shares his perspective on the relationship with LPs, highlighting the venture capitalist's role as a steward of the LPs' capital and the importance of placing it effectively.
"I think my age was probably a bit of a concern to some of the people we pitch, but actually a very small minority of people mentioned it."
This quote addresses concerns some LPs may have had about Peter Parker's age during fundraising but also indicates that his enthusiasm and track record were convincing.
"The more we can get into that Q A, the better it is."
Peter Parker explains that interactive and engaging pitch meetings with LPs, where they ask questions and show interest, are indicative of a successful pitch.
"And you've sat on countless boards, and from my memory of our past conversation, you've even chaired over 25."
Harry Stebbings acknowledges Peter Parker's significant board experience, which suggests a depth of knowledge in governance and strategic oversight.## Evolution as a Board Member
"Well, I would say the biggest thing I can point to is a realization that my partners and I came to in the mid nineties, and that is how to ask companies what their goals are and then how to sort of follow up on that."
This quote encapsulates Peter Parker's realization about the importance of goal-setting and follow-up in board management, marking a significant shift from his early days as a board member.
"We actually decided we couldn't judge a company based on that at the end of the year. And we finally moved to a metric where we say, just tell us the five things you're going to do for this, this year."
Peter Parker describes the transition from judging companies on comprehensive yearly plans to focusing on five key, measurable goals, which has streamlined the board's evaluation process.
"If companies aren't hitting their top two or three objectives, and if they're reasonable objectives, yeah, something's wrong."
This quote highlights the critical nature of meeting set objectives and the implications of failing to do so, which can lead to significant changes within the company's leadership.
"I think the more clear cut data you're bringing to the table, the easier it can be."
Peter Parker stresses the importance of having clear and objective data when discussing performance issues with CEOs, which makes the conversation more straightforward.
"In biotech, there's a market, there are people with disease. And so if you have a technology that can make an impact on any disease, you will have pretty ready path to either an exit or a much larger company."
Peter Parker outlines the fundamental difference between tech and bio sectors, emphasizing that biotech has a clear market in the form of diseases needing cures, which offers a more straightforward path to company growth or exit.
"They used to have a reliance on their own research people to fill that pipeline. If you look at the last ten years, the research headcount in pharma has gone down by five or six percentage points per annum."
Peter Parker discusses the shift in the pharmaceutical industry from internal research to external acquisitions, which has shaped the strategy of biotech venture funds and led to successful exits and new company formations.## Venture Investment Landscape Evolution
"This is all very new, Harry. I mean, I couldn't have told you this story in 2006. This is all within the last ten years."
This quote highlights the novelty and rapid change within the venture investment landscape, particularly in the last decade.
"So we like to say the companies have to be able to exit by the time $50 million of venture money has gone in."
This quote summarizes the investment strategy Peter Parker advocates for, which involves setting a clear financial threshold for when a life sciences company should be positioned to exit.
"Well, here's one you probably haven't heard of but it's called Barbarian Days. It's subtitled a Surfing Life."
This quote introduces Peter Parker's favorite book and suggests that it has had a significant impact on him, indicating the personal value he places on storytelling and life experiences.
"I'd like to see us all be a little more vocal."
This quote represents Peter Parker's call to action for the venture industry to use its voice to address social issues.
"What an incredible guest Peter was to have on the show there."
Harry Stebbings's quote is an acknowledgment of Peter Parker's valuable contribution to the podcast and the insights he provided.