Agents for change: the women breaking through in life sciences venture capital

For a long time, venture capital (VC) firms have been controlled mainly by men.  But things are changing and women are becoming more influential in life sciences VCs, with an increase in business going to all-female teams. We spoke with two female VC leaders about how women could act as agents for change in this male-dominated world.

Last year saw a record amount of venture capital – $17.2 billion – raised by women, according to the financial information company Pitchbook.

While the figure may sound impressive, it represented only 2.8% of the total capital invested in VC-backed startups in the US.

And although the amount invested has been trending up in recent years, Pitchbook’s VC Female Founders Dashboard shows that equality is a long way off.

Geeta Vemuri, founder and managing partner at VC Agent Capital, is one of only four women in the biopharma sector who have founded a venture capital group, and she is hoping more will follow in her footsteps.

Vemuri was already highly experienced by the time she founded Agent Capital in 2016.

“For every £1 of VC investment in the UK, all-female founder teams got less than 1p. By comparison, all-male founder teams got 89p. The story was slightly different in life sciences, however: all-female teams in biotech and pharma received 10% of funding compared with 7% for all-male”

She had set the strategy and built  a team for the venture capital arm of Baxalta Ventures, the VC arm of the drug company that spun out of Baxter and was quickly snapped up by Shire.

In an interview with pharmaphorum, Vemuri said that she hopes to challenge perceptions about VCs, focusing instead on her ability to raise people’s confidence and expectations.

According to Vemuri, investment in healthcare should come naturally to women, something that should increase their influence in the coming years in the life sciences sector as a whole.

“The majority of healthcare decisions at home are made by women. I really think diversity of thought is so important. Even when you are feeding your kid, your spouse, your father or mother, you kind of observe those things that could be done better.”

Vemuri is keen to focus on a philosophy based around supporting the companies that Agent Capital has invested in.

This raised the confidence and prospects of those involved, making a return on the investment more likely.

“VCs want entrepreneurs to succeed. They don’t come up with ideas, they recognise great ideas.”

Research suggests that there is also a gender imbalance in venture capital on the other side of the Atlantic, although there are signs that women are beginning to play a more prominent role in investment decisions.

The British Business Bank last year found that for every £1 of VC investment in the UK, all-female founder teams get less than 1p.

By comparison, all-male founder teams got 89p and in total 83% of deals in the UK last year involved companies with no women at all on their founding teams.

The story was slightly different in life sciences, however: the bank found all-female teams in biotech and pharma received 10% of funding compared with 7% for all-male.

All-male and all-female teams in companies producing healthcare devices and supplies received an equal proportion of VC funding (5%).

Dr Uzma Choudry, a VC Investor at Octopus Ventures, leads the company’s life sciences investments as part of its Future of Health team, drawing on experience as a research scientist in photochemistry and synthetic biology.

She joined Octopus after working with the University of Manchester Innovation Company to assess the commercial feasibility of technologies developed at the university.

Choudry has been championing diversity as part of her role and says that while at Octopus she has been given the same opportunities as her male counterparts, chairing meetings and playing a visible role in decision-making.

She argues that gender balance is also good for business, citing company research showing that teams including people with diverse backgrounds and influences tend to perform better.

Gender balance is important because it could also translate into better products at the end of the VC process: women could provide insights that could lead to investment decisions into ground-breaking products that could appeal to other women.

One example is Octopus’ investment in a pelvic floor trainer and a discreet breast pump for new mothers.

“This would lead to innovation in spaces where there has not been investment,” Choudry says.

Getting this diverse workforce is another matter, however, says Choudry, who adds that she has not personally been held back by the gender imbalance in VC.

She suggests recruiting candidates from diverse backgrounds to VC teams is one way to improve matters, focusing not just on women but people with different sexual orientations and socioeconomic and ethnic backgrounds, for example.

More is being done to widen the appeal of science, technology, engineering and maths (STEM) subjects, she adds.

“We are starting to see more STEM initiatives pushing women, and people who typically don’t go into STEM, to actually start taking on those subjects.”

But there is still much to be done, according to Choudry, who says that it is going to take time before this leads to meaningful change among life sciences VC organisations.

“A lot of the diversity is at more junior levels; the higher up in the organisation, the more skewed this becomes and the less diversity there is at the top.”

Both Vemuri and Choudry agree that getting representation at the most senior level in life sciences in VC will be the catalyst for change, providing role models that will motivate more women to push for more senior positions.

Vemuri concludes: “Hopefully it will inspire other women to take the lead.”