Love Chung (LC): Thank you for meeting with me this morning, Martin. Before we get started on asking you some specific questions, could you give us a brief introduction of Endeavor Venture Fund and Venture Studio?
Martin Gershon (MG): Thank you very much for having me here today. I am Dr. Martin Gershon. I’m the managing partner and the Chief Investment Officer for Endeavor Life Sciences Venture Fund and the Venture Studio. The Venture Fund was formed in 2009 and we are in our third fund. Now, the second one being Endeavor II and the third being the Venture Studio. Endeavor II has $1B of assets under management and the Venture Studio has $570M. We focus primarily on digital health, which includes drug discovery, drug development, precision medicine, personalized medicine, telemedicine, but we also do a lot of biotech. In fact, Endeavor I was a biotech firm including investments in Moderna.
We also look at mental health, women’s health and most recently in gene therapies and rare diseases. Typically, our check sizes for Endeavor II are $5-25M. For the Venture Studio, $100,000 to $500,000, up to a total of $5M for Pre-seed to Series A companies.
LC: Thank you for that introduction. I want to ask, as this is your first time attending RESI, what are you looking most forward to?
MG: Well, I’m very excited about moderating the panel on AI in Healthcare. It is a tremendous opportunity to be really close at hand with leading CEOs and entrepreneurs who are driving incredible new discoveries in AI and machine learning and the digital healthcare space. I look forward to speaking with incredible and seasoned industry leaders, investors, and it’s going to be a very dynamic process and I’m also excited about being a judge in two sessions, oncology and therapeutics.
LC: It’s your first time, but you’re already so involved! What kinds of companies or startups are you hoping to connect with?
MG: Well, that’s just a fantastic question because right now it’s really a floodgate of incredible companies, entrepreneurship is alive and well, even though we have a liquidity crisis, so the types of companies that we’re really interested in meeting first and foremost are in the digital space, but really, it’s about leadership and it’s about the CEOs that really drive the connection between us as investors and the technology.
So very important to us is the CEO perspective, the mission and the vision of the CEO, the ability for the CEO to be a leader, adapt, pivot, and grow. The Venture Studio looks for CEOs who have those qualities because very important to us are companies within the digital space, within the biotech space, and the other areas of investment, that we partner really from the get-go to strategics to look for exit strategies.
So, for us, the company is a combination of technology and management and the ability to be a good communicator, a good partner, and a good collaborator with those people that we want to come early in the process to look for involvement with.
LC: Thank you so much for all the details. How do you intend to evaluate investment opportunities that you come across at the conference?
MG: Another great question. Investment opportunities are really for us a four-part diamond shape approach. The first is, we really want CEOs who know how to collaborate and partner, who know how to adapt pivot and grow, who are coachable and who understand that it is an iterative process between the technology, the company’s vision, the investors, and most importantly, the strategics who are going to come in and be acquirers.
The second part is we want companies that know that it’s very important to be between the high demand and high liquidity corridors. What that means for us is that we are very, very interested in understanding where the drivers are to be able to move that product to commercialize an event and eventually to an exit. High demand means that industry wants that product, consumers want that product, patients want that product. High liquidity means that there’s already investment in that sector and growing.
And so, we put all the pieces together to look for companies and bring those in an iterative fashion in our workshops in our symposiums and in our BetterHealth webinar. Each week, two strategics, two industry leaders to be able to showcase these companies and say, how can we do a better job? What is it that we can do for you to create a customized package that you are interested in investing in or acquiring? Those are the types of companies that really prick up our ears.
LC: Thank you. As we’ve been talking about how you intend to evaluate investment opportunities and what kind of companies that you’re looking for at RESI, can you share a successful investment story and what made it successful?
MG: Absolutely. So early on in the process, we look for companies that have outstanding potential, which means great management, great leadership, and great technology. One of those early companies was Moderna. We did not know that there was a pandemic coming like anybody else. But we knew that there were tremendous, tremendous technological innovation, leadership and people like Bob Langer who have years and years of experience creating startups.
I do a lot of work with MIT and Harvard. I’m a visiting teacher and lecturer there and coach many of the companies. For many years, I am on the inside of understanding what’s happening in the labs, what’s happening with great professors who are entrepreneurs. And Moderna is one of those clearly, clearly above everybody else, head and shoulders, a real leader, a real understander of what is necessary in terms of new, platform technology.
And so Moderna really is a story that we approached early on because of its ability to grow, its ability to use its technology in multiple platforms. I think that we are going to see more and more of the technology that is embedded in Moderna come out over the next decade and longer to make it one of the preeminent BioPharma companies in the world.
LC: Thank you! And I just wanted to ask you one last question. What advice would you give to startups or companies attending RESI who are seeking investments from someone with your expertise?
MG: Such a fantastic question. So, I write articles, I teach about leadership I teach about entrepreneurship and about the new wave of CEOs and C-suite executives that are necessary for early stage companies. As new leaders, you have to have certain skill sets that you didn’t have 10 years ago.
Now, in 2023, it’s especially important to understand that investors want a risk adjusted investment. What does that mean? It means that it’s very, very important to understand that even though you have incredible innovation, you have to present yourself to investors as they see themselves. So that means that every investment has a risk adjustment to it. You must mitigate that risk.
We mitigate that risk in Endeavor by creating opportunities to generate revenue. So, my advice to investors is find those CEOs that understand this process. And my advice to CEOs is understand the investor perspective, mitigate risk, be adaptable, be customizable, find different ways to use your product in a platform technology and most importantly generate revenue.
LC: Thank you for all the insightful responses.
Martin Gershon
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