Antoine Saint-Victor: Thank you so much for taking the time. I really appreciate it. So, I just want to start off by talking a little bit about your background again and how you ended up in venture capital.
Fairuz: Sure. I am with class of ‘22 of the executive MBA/MS in health care leadership, I came to know about venture capital as a career when I was at Moderna Therapeutics, which was between 2012 and 2015. I was one of the earliest employees there, where I was a junior researcher on the vaccine project, which later became the Covid vaccine. As a start-up, Moderna was at the time heavy fundraising. I had the opportunity to see that brilliant startups needed the right investors to be successful and became fascinated about how business impacts biotechnology.
When you come from a research background like I did, you set out with a very idealistic view of your career and where you want to go do research. You want to be a part of a therapeutic that goes to market. But later you learn what I learned about the process, uncertainty, and fundraising. So, at Moderna, I realized that it must be funded, and you know that creates a bottleneck. At some point it becomes more about the right funding, rather than great science alone. There are so many startups with great ideas, but they do not always get funded, and you realize it is not just about a great idea. There is a lot more that goes into it, and fortunately, or unfortunately, funding is a huge part of it.
Antoine: Understood. I know we touched on this a little bit before. But can you speak to how you were able to cater your time during the Executive MBA program to pivot to this field?
Fairuz: That is a good question. It was a lot of work, because unlike the full-time MBAs, you’re still working full-time. At the same time, unlike the full-time MBAs, we do not get directly recruited, so we must pursue recruitment opportunities ourselves. So, I’ve learned that it takes a lot of networking. I think most people know that at the end of the day it becomes more who you know, and who knows you.
The great part of the Executive MBA was being able to reach out to the Johnson alums, both in the full time and executive programs. They have been very helpful in providing advice and connecting me with other people. Some of the advice I got was to start off at one of the big 3 consulting firms first, and then transition to VC. Or, go into banking, especially the sell side if you come from a therapeutics background like me. But I also learned that you really don’t necessarily need any of those backgrounds to go into VC. Because, again, it is very much a networking heavy field. So, you could network your way into it, it might take longer than if you went via the traditional way, via consulting, operations or banking. Also, my experience in a start-up space helped me to fit in as well.
Which makes sense, given that you are speaking with start-up CEOs daily. It is important to understand what they do, their perspective.
Antoine: Oh, okay, I understand. So, can you tell me a little bit about your role today with VU Venture Partners? Also, when you’re looking at an investment, what kind of things stand out to you and signal that it might be a good investment?
Fairuz: At VU Venture Partners we invest agnostically and across many verticals. I cover the health care sector, including therapeutics, med devices and digital health, which is very big right now. VU focuses mainly on the early-stage pre-seed and Series A with investments of about $3 million. We invest as lead investors and as a syndicate.
In terms of what you’re looking for in a deal, like every other investor, you look at market size, team quality, product quality and differentiation and how strong their intellectual property is. But first, and for most, you need to see if there is a market – the larger the market size the better.
The second most important thing is the team. What I mean by team is, how strong the team is and how well they can work together. What is the leadership style of the CEO? Is he or she a first-time founder? Are they able to execute and lead a diverse team? There are some things that are hard to change about a startup. If you were going to change something about the startup, the team is very important and would have to be addressed early. They must be able to work together. If the CEO is not well understood by their team, then that is definitely a red flag and will lead to problems later on.
The third thing, obviously, is the product, the quality of the product. How differentiated is it, and are IP,protections in place, especially in tech and health. There are also other things, like the competition, and so on. But those are the top 3.
Antoine: That makes a lot of sense. These are the same things that we learn in the MBA as the most important details and aspects of the company to investigate as well. So, going off that idea, are there any trends right now that you’re excited about in this market?
Fairuz: Obviously, there is something to be said about how hard it is to attract investment funds right now. But I think any VC now will tell you that if I is truly a great, disruptive idea, I think there is always money to be invested in those startups, it just must be more exceptional than let’s say when things were better.
It’s expected that this year there will be some startups that are going to go under just because of the nature of the investment climate, and that just leaves more dry powder to those that are doing really well and exceptional, and that are soon to be unicorns.
Antoine: Yeah, it’s a tough market right now. With investments coming under more scrutiny, are there any recent additions to the portfolio that you’re particularly excited about?
Fairuz: Yeah, there is one that I’m working with, a Boston based wearable tech company within the healthcare field that I’m really excited about. They have all their bases covered — the market, they have the IP, and its technology has been developed by the CEOs who are from MIT. So, we’re doing a deep dive into this company and we’re presenting it to our partners next week.
That’s a good example of an exceptional start-up where the work is really interesting, and you can see that they have put in the work just by looking at their deck. By the way, when start-ups come to investors, many of them are first timers, and there’s a lot of information that they haven’t been exposed to, so they don’t know what investors are looking for. But like this company, they know their science and they know their technology, which makes communicating and understanding the business and product potential easier. They’re a great startup, but they don’t exactly know what investors are looking for, and that’s a different ball game. In that case, instead of the founders having all the business answers, they have mentors or advisors who guide them through that. It makes it a lot easier for investors to look at them and take a chance on them.
For example, I think how you’re in medical school, that gives you the background to understand the science behind the product. So, you want people on the team like yourself who will be able to explain it. But after that, one of the themes we are looking at is, is it something that you can sell? Is it something that will bring in a higher return over other investments? I think that’s the one thing that a startup coming out of a lab in the therapeutics world has a hard time doing. It’s sometimes difficult to connect those dots and understand why, despite them getting really good results in experiments, people are not getting the aspect of why it could be valuable as a product in the market. So, there’s a disconnect between founders and investors in that aspect.
Antoine: So then, one of my last questions for you. What advice do you have for students and professionals that are trying to break into the VC space, especially for women of color?
Fairuz: Well, so the first one is students who are doing their MBAs, it really depends on what they’ve done before. If they’ve been in operations or done banking before, it’s definitely a lot easier for them to transition out of the MBA into the venture capital world. But again, it is about networking.
Once you have your foot in the door, you may start in either an associate or principal role. But you must ask the fund if they have or if you are on a partner track. So many of these positions are not. If it’s not a partner track, then what are your goals in the next 5 to 10 years? Are you going to leave after 3 years and go to something else? Are you going to start your own fund? So, it really depends on where you want to be in the long term. I ideally want to have my own fund long term, and I’ve had several years of experience in the therapeutic field. Not having the banking experience proved challenging initially when trying to get into VC.
But if it’s, you know, somebody with 2 or 3 years of banking or consulting experience, then it’s doable to go straight into VC. But then again, what’s the long-term goal? They have to ask if this is a partner track or not, and I think partner track becomes more and more difficult to reach without a traditional background. It really helps to have that background or the others we spoke about earlier to become a senior level VC or a partner in the future.
In terms of women, especially women of color, it is hard given the lack of representation and mentorship. I think that’s pronounced everywhere, it’s the same in the tech field and other fields. But I think it’s tougher in the venture capital world. There is talk about diversity and inclusion, but to be honest, a lot of it is used as a buzzword for a lot of the funds. Some are really invested. I can say that VU Venture Partners is one of those where they really make sure that they hire or try to hire people who are diverse and from all types of backgrounds. But for many of the traditional firms, the effort is not there. I think they are aware of the issue, but either they don’t truly understand it or it’s unclear how much they’re invested in it. So, I think there’s a lot of work to be done in that aspect. My advice for other women and women of color would be to really network. Cornell is a great school. The Johnson School network is great. Talk to someone in the field, talk to someone who is involved; there are so many people in the VC world, including partners. So, I would just do the cold calling. I do that, and I’ve been doing it more and more. That’s something that should be done on a regular basis. Not just because you’re looking for something. It should become, you know, part of your routine and make sure that you get to know people in the industry. You should not just reach out only when you are looking for something.
Antoine: Absolutely, I think that’s great advice. Even for myself, that’s something I kind of lost after working and going back to medical school. It’s easy to get insulated in your own little world during different life or career transitions. But by coming to earn my MBA, I’m realizing how powerful networking can be and it’s up to you to continue that work. You never know who can connect you, or who you could help as well by opening up your network and making connections for others.
Fairuz: I think now we are used to doing everything online, Zoom rooms, etc. You know, LinkedIn, that’s great. I do get some responses. Maybe, I’d say, 30% hit rate — which is good for cold messages and emails, right?
But other than that, I’d advise people to really attend those conferences. Many of them are not affordable, but some are. I would just show up, and you just never know who you’re going to meet. I like doing things in-person rather than online. Which, post Covid, we’ve all got used to interacting virtually. But I think there’s something to meeting someone in-person, and there’s so much going on in NYC. I think for the full-time students in Ithaca maybe the hardest part is that they’re 4 hours away. It’s not like you can use your weekend to network, and so on.
Antoine Saint-Victor: Wonderful advice I will be sure to follow myself going forward. Speaking of which, going out to events is how we met, at the Big Red Ventures’ Annual Meeting. So, it’s definitely important to put yourself out there, connect, and learn from others as much as possible. Thank you so much for taking the time out again, this has been an absolute pleasure.
Peter is a Principal at Oui Capital, a pan-African VC Fund headquartered in Lagos, Nigeria. He joined in 2019 and then again in 2022 after his MBA at Tuck. Prior to VC, Peter spent most of his career as an investment banker in the U.S. – focused on financial institutions. This would later evolve into working with clients within the FinTech industry, an area he focuses on at Oui Capital. Peter’s transition to VC occurred at a time when Fintech started to take off in the U.S. and he was working on Fintech M&A. He was part of the team that sold the first bank to a Fintech in the U.S.