186. Seed Investing at the Intersection of Biology & Technology (Jenny Rooke)

186. Seed Investing at the Intersection of Biology & Technology (Jenny Rooke)
Nick Moran Angel List

Jenny Rooke of Genoa Ventures joins Nick to discuss Seed Investing at the Intersection of Biology & Technology. In this episode, we cover:

  • Her background in genetics, physics, computer science… and how that lead to venture.
  • How was it to work with Melinda and Bill Gates?
  • You also successfully built the largest life-sciences syndicate on Angellist that is also one of the highest performing syndicates of any sector… I just took a peek at the rankings this morning and both New Stack and Genoa are in the top 5. Of course those rankings are done based on follow-on rate… so, it’s nice to see we are in good company, up there w/ you Jenny… but talk a bit about why you started with a syndicate and how you’ve been able to drive such high performance.
  • You launched the Genoa fund last year… Syndicate and fund now?
  • “Genoa ventures invests in early-stage companies innovating at the intersection of biology and technology”… Jenny, what does that mean to you and what types of companies are you looking for?
  • Adverse effects from Theranos?
  • How and where do you source dealflow?
  • Talk a bit about your evaluation process and some of the unique things that you do when vetting prospective portfolio companies?
  • What’s your take on VCs that pick a focus area and stay distinctly in their lane vs. those VCs that may have a focus but tend to dabble in variety of other areas?
  • A position I’ve heard from many tech VCs is… “There are additional layers of risk in life sciences… the science itself, clinical trials, regulatory approvals, etc. that don’t apply w/ traditional tech startups… making it a very difficult category to successfully invest in”… Jenny, agree or disagree?
  • What’s the biggest hindrance to either more or faster advancements in the life sciences space?
  • With regard to life sciences… What’s required, in terms of progress, to raise a seed round… what about a series A?
  • How do you help your founders navigate the fundraising process where many VCs don’t understand the science?
  • Have you invested in startups where the chief scientist is CEO? If so, how to you assess for and/or help coach the commercial skills and leadership skills required to build and scale a venture-backed startup?
  • How do you think the usage of automation and data will play a role in healthcare, therapeutics or other sectors?
  • If early performance is an indication of long-term results, Genoa is well positioned as an emerging brand in venture… but I’m curious to hear what winning looks like for you? How are you keeping score on yourself and portfolio you’re building?
  • Talk about some exciting new innovations or trends that you’re seeing. Where do you think they will have a big impact and when?

Guest Links:

Key Takeaways:

  1. Jenny’s love for science and interest in advancing the field, to make a real impact in the world is what ultimately got her into investing – as a way to support the next generation of business builders who are trying to solve problems with science and technology. 
  2. Working with the Gates Foundation, Jenny began thinking about how to deploy capital through science, to retire risk and get to milestones, without being constrained by the 7-10 year VC timeline, and measuring returns by lives saved/impacted rather than cash on cash or IRR. 
  3. Jenny thinks of her Angellist syndicate as a nano version of investing. What is most exciting to her is the opportunity to connect brilliant companies, such as Zymergen, with good sources of early stage capital while they build out the team and prove out their vision.
  4. Jenny thinks about biology and technology as forces that have historically been separate/independent, but today they’re increasingly colliding. She uses Illumina as an example, the leader in DNA sequencing. They are advancing the playing field of science but not typically well understood, because the underlying technology itself is not biology, instead it is applied in biology. 
  5. The long term thesis at Genoa Ventures is to think about biology as a technology, and as a result create a variety of types of solutions that will impact healthcare, agriculture, chemicals and beyond. 
  6. An important lesson to be learned from Theranos is that these really compelling visions with compassionate leaders are still subject to the laws of physics and regulatory requirements.
  7. Jenny emphasizes the importance for investors and entrepreneurs in the life sciences space to know what specs of the challenges you are trying to address can be innovated through and overcome with passion, but also know which ones are actually barriers you must pass between. 
  8. An important element of her evaluation process is to continually improve at the first pass triage. Before interacting with a founder. she often asks herself if the deal is realistic for the firm, taking into consideration her responsibilities with her current portfolio companies.  
  9. What it takes to get a deal done goes so far beyond the technology, the thesis, or the team, but also what size of investment the company needs right now and whether or not that is a good match for where the firm is and it’s fund cycle. 
  10. For companies that do not fall into a traditional venture sector, one of the best ways to ensure you reach success is to build a syndicate around yourself that reflects your unique, inter-disciplinary nature and complexity. 
  11. There are no shortcuts to developing a proper toolkit for science based risk evaluation and mitigation. It takes a great deal of time and effort because of the nature of its complexity.
  12. Jenny believes we are just at the beginning of a revolution in better tools to advance the life sciences and tech space. When we can develop a better understanding of the science and generate that information, it will inevitably lead to better products. 
  13. The challenge to more rapidly developing advancements in this space, is that the budget and spend on tools are a fraction of the overall spend on healthcare or research. 
  14. What Genoa often looks for in opportunities to potentially lead, is the ability for a company within the first round period to substantially de-risk on the technical side, prove their approach is not going to violate the fundamental laws of physics and also generate a blocking IP thats part of their intellectual property. 
  15. Part of our job as investors is to help the company think creatively about how far they can get along the goals of retiring technical and market risks, without necessarily having to run a fully developed and funded commercialization effort yet.