So You Want to be a Venture Capitalist?

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We caught up with one of venture capital’s most successful and respected female figures, Dr. Beth Seidenberg, to glean her advice.

By Bonnie Boglioli Randall (Contributing Writer, Women 2.0)

The world of venture capital is not for the faint of heart. Competitive, demanding and laced with inherent risk, becoming a VC is the statistical equivalent of making it as a professional athlete.

For women, the odds are even more daunting, with female VCs constituting just 11 percent of the industry. Breaking into this formidable circle takes guts, an acute sense of the market and a seasoned approach to business… something that Dr. Beth Seidenberg knows a bit about.

The Right Chemistry

Seidenberg didn’t set out to become a venture capitalist; instead, she carefully crafted her career as a physician working in pharma R&D before earning her executive stripes as Chief Medical Officer for biopharmaceutical giant Amgen.

In 2005, she seized the rare opportunity to join prestigious Silicon Valley VC firm Kleiner Perkins Caufield & Byers as a partner, where she draws on her clinical and entrepreneurial acumen to identify and help early stage startups in the life sciences and digital health space.

Her comprehensive command of the industry and tough-as-nails approach to problem solving has earned her a solid reputation as one of venture capital’s finest.

We caught up with Dr. Seidenberg to learn about what she looks for in entrepreneurs she backs and what skills are necessary for success.

Women 2.0: What inspired you to make the leap into the world of venture capital?

Dr. Seidenberg: My primary motivator was a desire to make a bigger impact. I’d spent almost 20 years developing products and therapeutics for all different types of diseases. At Amgen, I became acquainted with the original venture capitalist who funded the company.

It opened my eyes to see what is possible with an early vision and leading technology; how broad and big an impact you can have. I thought, “What if I can apply the knowledge that I’ve built up over these 20 years and help entrepreneurs make an impact?”

Women 2.0: What attributes do you look for in the entrepreneurs you back?

Dr. Seidenberg: The three main things are vision, passion and smarts. It’s my job to find or attract entrepreneurs who see the future and are helping create it. We’ve got to be looking at the future; the entrepreneur has to have vision to do that.

Passion is mandatory because being an entrepreneur is a 24/7 job for 3 to 10 to 20 years. You must be hyper-focused on your mission and vision. If you don’t wake up every day excited about it, you won’t succeed.

Smarts is a combination of book smarts, street smarts and people smarts. You need IQ and EQ; you hear that all the time but when you see it in motion, it resonates just how important both components are. It’s up to the entrepreneur to build a team, motivate them and get productivity and creativity out of them, which requires all of those smarts.

Women 2.0: As a physician, you’re trained to handle crisis situations. Is it important to determine how an entrepreneur might handle unforeseen events?

Dr. Seidenberg: You put your finger on it. There are certain undeniable truths in life and there are also certain truths in startups. Among them, there will be crises and not all of your projections will come true. There will always be mistakes or issues that you’ll have to deal with.

Women 2.0: How do you put that all together to figure out if an entrepreneur has the fortitude to manage that?

Dr. Seidenberg: At KPCB, we do a lot of referencing on our CEOs ahead of an investment. I’ve honed those skills so that I ask the right questions and then I assess.

I can say with 100 percent certainty that I haven’t been right all the time. I’ve made mistakes, but the entrepreneurs who are able to stick with it have the characteristics that I mentioned earlier: Vision, passion and smarts.

By definition, great leaders do what all physicians are taught: When you’re in the ER and a patient is on the table, before you take his pulse, you take your own. In other words, make sure you’re calm and everyone else will stay calm around you.

Women 2.0: What makes for a successful venture capitalist?

Dr. Seidenberg: Being able to relate to the entrepreneur is critical if you’re going to be a great venture capitalist. I try to relate to them on the product and creativity sides. I choose entrepreneurs who build companies in areas that I know will be of interest either from an acquisition standpoint or IPO.

Biotech and digital health done well should be capital efficient. On the biotech front, a fabulous network of outsourced services has made that efficiency possible – you can buy instead of build many things. That cuts both time and capital.

On the digital health side, you’ve got to know who your customer is and how to acquire revenue quickly. I also leverage the tech network within KPCB to help life sciences companies build out their product and develop successful business models.

Women 2.0: Does intuition play a role in your work?

Dr. Seidenberg: It’s often said that intuition is very important and it comes into play as an early-stage investor. As a late stage investor, it’s a very different thing: It’s a calculus and analytical model that drives the later stage investment decisions.

In early-stage investing, intuition is a component of making good decisions with respect to the market and market trends. You need to have a sense of where it’s all going; you need to be a good observer.

My grandfather, who was also a physician and the best diagnostician I’ve ever known, taught me how to observe as a child. I use those clinical observation skills to help me as a venture capitalist.

Being a physician also helps me pay attention to people and their behaviors. To figure out which entrepreneur to back, I spend time getting to know them and watch how they interact with their team and react to new situations.

Women 2.0: The number of women in STEM fields remains low. Do you expect the emerging digital health field to usher in more female entrepreneurs and innovators?

Dr. Seidenberg: I would prefer not to pigeon-hole women into any particular role. I grew up with a professional mom and went to an all-women’s college… I really feel that women should empower themselves to do whatever it is that they’re passionate about. It’s not that women can’t relate to a high tech company – they certainly can, as women like Marissa Mayer and Meg Whitman demonstrate. We can do whatever we put our minds to.

Personally, I want to back more women entrepreneurs. In my portfolio, there are two female CEOs. One is in reproductive health (Lissa Goldenstein, CEO of Auxogyn) and the other is in therapeutics (Dr. Nancy Stagliano, CEO of True North Therapeutics) and both are passionate about what they do. At the end of the day, you need to have that passion to be successful as an entrepreneur.

Women 2.0: Lastly, what advice would you give to aspiring female VCs and angel investors?

Dr. Seidenberg: My advice would be to develop an area of expertise, build a network, execute and deliver returns… the rest will follow.

What other questions would you want to ask a venture capitalist?


About the author: Bonnie Boglioli-Randall is a Silicon Valley-based freelance writer with a predilection for covering the startup ecosystem, helping tell the stories of nascent technologies and organizations. She’s an enthusiast of non-fiction (of the sort that make most people’s eyes glaze over), running and her family. She’s always up for a good conversation. Follow her on Twitter at @BonnieBRandall.