Author: Alex Cho, BRV Fund Manager
From Researcher to VC
Alex: Hi Jeff, thank you so much for your time! You have a nontraditional VC path. Could you tell us about how you got here?
Jeff: Absolutely! My “why” has always been a builder, I love building products, teams, and companies. My journey can be boiled down to 3 parts.
Part 1: Early on, I was a researcher in computational biomechanics. However, even as I was getting my Ph.D., I knew I didn’t want to go into academia because I wanted a more proactive role that could build an exciting products/team.
Part 2: I got the opportunity to join my previous partner in a new company, Simbex. We started as a medical device company, building and bringing our own products to market. But after some years, we felt we wanted to pivot towards what we were most passionate about, specifically product development at scale
Over the next years, we ultimately transitioned our business to a boutique consultancy to provide two consulting services in the MedTech and consumer health space. Our commercialization strategy-side of the business focused on market, reimbursement, and regulatory strategy for new innovations.. The other side of our business was focused on product development from ideation to transfer to manufacturing. Over our product focused years, we had built an incredible team of engineers that covered most engineering disciplines from embedded hardware engineers, system engineers, mechanical, algorithm/data engineering, cloud infrastructure, and app development. Since we had it all under one roof, we could efficiently build complex products in a highly regulated market. We were able to quickly adapt to engineer changes in one area and assess the impact it had on the market, regulatory, or reimbursement strategy. Throughout the journey, we worked for clients ranging from startups to multinationals.
Part 3: Our company eventually got acquired by a public company, but instead of staying in my new role, I wanted to go back to what I enjoyed doing, which was building teams and companies. More importantly, I wanted to find a role where I could leverage the experiences that I’ve gained over the past 2 decades to have the greatest impact.
I was fortunate to find my co-founder, Jenny Barba, as I was working through my earnout. She came from MedTech investment banking and VC, and we both saw the opportunity for us to help diversify the venture industry. We wanted to focus on supporting overlooked founders who aren’t serial entrepreneurs or who didn’t come from established MedTech ecosystems. We also had the opportunity to help diversify the LP base with HNWIs or institutions who didn’t have access to MedTech. I love my work because I have an opportunity to do two things: build and scale these companies at the early-stage where we can add significant accretive value, and also have a chance to help make change within the industry itself.
Evaluating & Growing Startups
Alex: From the hundreds of startups you review, how do you pick which ones to invest in?
Jeff: I have 4 things I look for:
1. The first one is product-market fit. We need to make sure that we have a clear idea of what the product is. Who is going to use it. Is it the right product for the right market at the right price and at the right time.
2. The second one is scalability. Scalability comes in a couple of different ways: scalability of achieving market penetration, ability to hit margin goals, and ability to deliver product to the end-user.
3. The third one is teams. We think a little beyond the management team; it’s also about your network of advisers and your board of advisors because all of that must work synergistically for the company to succeed.
4. The last thing is the investment opportunity. The investment must make sense for the fund, our portfolio construction, and the LPs. If the valuation is too high, needs too much capital relative to the exit valuations, or the time to exit doesn’t fit our fund, then we’ll probably pass on that. Since we work with early-stage companies to help them operate efficiently with clearly defined value-inflection milestones and to utilize capital efficiently, we need to feel comfortable that we can add accretive value. If we don’t have the expertise nor have others in our network who can help, we’ll also pass.
Alex: How does your team help your portfolio companies grow?
Jeff: Over the years, I’ve worked with 100s of companies through my consultancy. I’ve seen most ways a company can fail. Overall, we can help them define their next value inflection milestone and help them create a path to go from where they are today to that next milestone. Having done the founders journey and operated a business, we can provide operational, technology, regulatory, reimbursement, and strategy support. Then, we can also leverage our unique networks that we’ve built over our collective 45+ years of experience to help provide key advisors, subject-matter experts, resources, potential sales targets, and other investors..
More specifically, my partner at Features Capital provides financial strategy expertise. Over her 20+ years of experience in investment banking and VC, she has done over $4B in MedTech transactions and established deep relationships with BD at most of the major strategics. She has deep understanding of the capital needs of an organization and their path to exit. For every single one of our companies, we help to find where they are today, where they need to be on an exit and make sure we clearly understand what those value inflection points are and map a strategy around that
My job is to help ensure that they have the right team, operations, execution, and technical support. That could be making intros to potential new team members, a providing feedback on their product development and commercialization plan, and/or financial projection and budget Any one of those things is just about making sure we’re utilizing capital efficiently and that they’re executing efficiently. Making fewer mistakes, utilizing capital efficiently, and operating efficiently to clear value inflection points helps to continually build value (preserving equity) and ensures we drive towards exits.
Advice for Students
Alex: In closing, do you have any advice for students looking to work in VCs?
Jeff: There is a traditional approach where you get a MBA, work in finance, and later pivot to a VC. I took a nontraditional approach and took the founder’s route, which was very rewarding.
In the founder route, you learn what it takes to go from a simple idea and take it to an exit. It was not an easy journey, but I learned so much from this experience. No matter what path you ultimately choose to VC, I would reflect on the skills and gaps you currently have in supporting founders and leverage every opportunity to help either deepen or close these gaps. Ideally, gaining some startup experience, either as a founder or key team member, would be an incredible experience.
If you find yourself with an opportunity that amplifies the following 3 personal characteristics, I would lean hard into the entrepreneur path.
1. First is an irrational conviction about an idea. So, you must be incredibly passionate about your idea to be able to do it and make all the sacrifices to make it successful. You’re working on innovation and everyone around you is telling you why your innovation will fail.
2. The second characteristic is grit. You need to be incredibly gritty. And that’s an essential aspect because it doesn’t matter how much irrational conviction you have if you don’t have the grit that helps drive it forward. Having irrational conviction helps drive grit.
3. And the third aspect is the feedback. Because irrational conviction mixed with grit is so dangerous, founders need self-awareness and the ability to listen to people around them to take them off that knife’s edge of irrational conviction.