Venture capital and health care
Jan Garfinkle is not your typical VC founder, and not just because she’s a rare woman running the venture capital firm she founded nearly two decades ago. Though she hails from the Bay Area, she started Arboretum Ventures, a health care VC firm, in Ann Arbor, Michigan. She also serves as the chairwoman of the National Venture Capital Association.
Garfinkle worked at two medical device startups — both of which were bought by Eli Lilly and then spun off with other startups in 1994 — before leaving California for the Midwest.
She shared her perspective on medical innovations and the disgraced blood diagnostic startup Theranos in a recent interview.
You started out in the Bay Area. What happened?
My husband had moved to California to marry me because that’s where the startups were. But after a couple of years he was unhappy so I said OK, find another job in the Bay Area or Seattle. Well, he found one in Ann Arbor, Michigan. I did not want to leave. But I had to, or get divorced, and I didn’t want to get divorced. This is one of the challenges of two-career families, that someone is always compromising.
My husband had left a great job in Chicago. So it was my turn to move for him. I did consulting for seven or eight years, then tried to work at the two medical venture funds in Ann Arbor at the time. It didn’t work out.
So after leaving an interview with one of them, I went home and went to IRS.gov, filed for a tax ID number and started Arboretum. I just decided to jump right into it, which was extremely naive. I had no idea what to do on the venture side. What I knew was how to help early stage health care companies.
Theranos. From your perspective, how did something like that happen?
I think the biggest mistake that happened there was that there was nobody on the board who had ever invested in or run or been part of a health care company. So the oversight, the governance, the ability to really question what the company was doing was not there because the board, while they were all very famous people, didn’t know the right questions to ask and the right diligence to ensure that nothing shady was going on.
Where do you think the most interesting new inventions are going on right now in health care?
Genomics is one of the big ones. Look at cancer as an example. Cancer is going to become a chronic disease, primarily because there is now this ability to take a biopsy of a tumor and you can do genomic sequencing on it and identify what gene mutation happens that caused that tumor. Then you can give a drug that targets that mutation.
The other is a wave of new technologies called digital therapeutics. These are essentially using your phone to provide therapy. We are an investor in a company called Pear Therapeutics that has FDA approval for cognitive behavioral therapy for addiction.