Kleiner Perkins Caufield & Byers is one of the kingpins of venture capital, best known as the firm that got in on the ground floor at Google, Amazon, Genentech and plenty of other industry-defining companies.
The firm has gotten its share of glory, but it attracted some unwanted attention last year when a sexual harassment charge was leveled by Ellen Pao, a former junior partner. Last week, the rumor mill got fired up again for a different reason at the JP Morgan Healthcare Conference, as one of KPCB’s well-known life science partners, Risa Stack, left for a new job at GE. At a moment when the life sciences venture capital industry is in free-fall, people at the conference wondered whether Stack’s departure was another sign of a top VC firm backing away from the time, expense, and risk that goes with the territory in biotech.
Brook Byers, the big-name partner at KPCB and a venture investor since 1972, heard the scuttle. So did Stack. Both sought to explain the reasons for the move in their own words. Stack told me that she made the move to GE partly because of her longstanding relationship with Sue Siegel, the CEO of the healthymagination division, her familiarity as an advisor to the fledgling GE effort, and out of her desire to get operating experience at a big company. Stack says she’ll have a hand in developing GE’s healthymagination strategy, with a specific focus on molecular diagnostics, healthcare reimbursement policy, and use of healthcare data. GE CEO Jeff Immelt has committed $6 billion to the healthymagination effort, which has a goal of improving healthcare access and reducing cost.
Some of the new work at GE, Stack says, may include health startup investing with her friends at Kleiner Perkins.
“It’s a great opportunity for me to continue some of the work I started at Kleiner, and help GE,” Stack says.
Byers spoke at length about Stack’s departure, the future he sees for KPCB’s healthcare investments, and one of his favorite new startup ideas. Although he wasn’t listed as one of the managing members of KPCB’s 15th fund announced in May, he is still active at the firm, and serves on the board of directors of 10 companies. This exclusive interview was done in person on Jan. 8 in San Francisco, and has been edited for length and clarity.
Xconomy: How much of the new Kleiner Perkins Caufield & Byers 15 fund will be allocated toward healthcare?
Brook Byers: We raised KPCB 15 last spring. It’s a $525 million fund. We don’t do a formal allocation by percentages into sectors, but it will be invested in healthcare/life sciences and digital consumer and digital enterprise and cleantech/green. We have organized partner practice groups in each of those. The notion is that about 20 percent will go into healthcare/life sciences. Which is about the same percentage we had in prior funds. We’re all very comfortable with that. We expect to do therapeutics, diagnostics, medical devices and healthcare IT, within healthcare/life sciences.
X: Who are the partners now responsible for this portion of the KPCB15 investment?
BB: We have Beth Seidenberg, who’s been with us for seven years. Prior to joining us, she was chief medical officer and head of worldwide development at Amgen. Before that, she worked at Bristol-Myers Squibb and Merck. She’s a legend. She has over 20 FDA approvals.
Dana Mead, who had a 20-year career in medical devices, and was president of Guidant’s vascular surgery division before he joined us seven years ago. As Beth is, Dana is a legend in devices. They are two of the most experienced venture capitalists with operating experience and a network.
Larry Leisure is an operating partner with us. He has a 20-plus year career in reimbursement and payment. He worked at Kaiser, Accenture, and Towers Perrin. And there’s myself, with a 40-year career in venture capital. I’ve started four companies from scratch over that period, and been involved in dozens of companies. That’s our core team.
Throughout the firm, we have a history of bringing in young associates, and keeping them with us for a couple of years, and then having them go out into an operating company to get experience. Risa [Stack] stayed a very long time with us, she was a huge contributor. We talked to her over the years about operating experience. She did incubate Nodality from scratch, and worked very closely with me on incubating CardioDx and Veracyte as well.
This opportunity came along for her. We’re very close to Sue Siegel. We worked with her for years when she was with MDV, and I knew her when she was at Affymetrix. She’s a neighbor and a good friend. It’s a wonderful opportunity for Risa to become the general manager of a division of an important company like GE, where all the way up to the CEO, Jeff Immelt has committed $6 billion to improving healthcare. We will have a close friend and ally at GE to collaborate with us, and GE will do a lot more in this whole field of precision medicine. Risa will be catalytic for that. It’s a perfect hire from their point of view. From our point of view, it’s the perfect ally and friend and colleague to have at GE.
I also want to mention Isaac Ciechanover joined us three years ago from Celgene, and in a similar way, he is incubating a company called Atara [with Amgen]. He’s the founding CEO, with total support from us as the lead investor. I don’t think GE needs any investment.
X: Any plans to fill Risa’s slot in healthcare at KPCB?
BB: We’re going to hire somebody. We’re beginning a search. It will be for a senior associate, and we hope to complete that by March.
X: So you are going to hire somebody, and it will be a senior associate specializing in healthcare, to fill Risa’s slot. So do you remain committed to healthcare?
BB: Yes. And it will be someone with experience in industry.
X: What are the most exciting opportunities in healthcare, that you can work on with this new fund?
BB: (pause) I’m trying to think of something … Next Page »
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