263. Lessons from An Exits and 20 Years in Health Tech w/ Vandana Subramanian

0:00So 20 years in healthcare, I've worked across large coffers. I've had two startups of my own, exited them. I've helped venture capital firms with their investment pieces. And now in the UK, I work with a couple of venture capital firms.

0:13Amardeep Parmar:That's Vandana. She's an expert in the health tech space. My first startup was in oncology therapeutics and the second one was in AI predictive and cancer. So Axel Partners obviously is one of the most respected regarded VCs in the world. I actually got my funding of a bunch of presentations, 63 versions. It was about across two rounds, 10 million. They really sort of put me through the ringer on what it was. She goes in-depth on health tech exits. Healthcare, health tech, biotech, sort of tough. You're looking at strategic exits. You're looking at it could be a hospital chain. Could it be a pharmaceutical company?

0:48With healthcare, I think exits come much sooner than you can expect. Of course, you can always build your product out to an IPO, and that's fantastic. but you always have the option of looking at, let's say, C's B, can I exit out?

0:58Amardeep Parmar:She's now shifted to the investor and advisor side. For startups, I think you need to be very close to innovation, and that's always been a theme across the work that I've been doing. Sort of helps you rapidly get to market. I've actually helped startups raise up to about$160 million when they flip from India to the US.

1:20Amardeep Parmar:So you do so many different things, and you came with a strong recommendation from Shamik, who's our health tech lead. Can you explain for us and for me, what do you do today? A whole bunch of things, like you said. So 20 years in healthcare, I've worked across large corporates. I've had two startups of my own, exited them. I've helped venture capital firms, you know, with their investment thesis. And now in the UK, I work with a couple of venture capital firms, very passionate about healthcare investing, especially looking at very overlooked sort of sectors as well that need attention. and also trying to build a fund with very specific thesis points that I'm passionate about.

1:57So that's a bit of all that I do.

1:59Amardeep Parmar:So I just said that you started in corporate, right? And then you went into your own startups. Yeah. Can you rewind to that bit about how did you make that transition and what made you start your first company? So I think it was a very interesting phase, right? I think the large carpets really gave me, and again, these are very global roles. I was working in the US, Europe, as well as Asia Pacific. And what the large companies gave me were a lot of discipline and the sort of the network across the clinical ecosystems, you know, the regulatory frameworks, partnerships. And I think, you know, when India was sort of is where I sort of did my startups and we had the health care biotech boom, just touching it then back in 2012.

2:39and it was the right stage where you could, healthcare is a very tricky sort of sector and the on-ground knowledge really helped me sort of pivot into the startup phase of things. It can be very different as a sector from let's say FinTech or SaaS and that very specific knowledge helped me sort of make that jump. I don't know if I necessarily wanted to move to startups. I really loved my nine to sixes, but I also equally loved my nine to forever in the night. And I loved working across countries, of course, with all my startups. So I think that's sort of how I moved the needle. And again, for startups, I think you need to be very close to innovation.

3:14And that's always been a theme across, you know, the work that I've been doing. And, you know, it sort of helps you rapidly get to market that perhaps a large corporate will not let you achieve. And I think that sort of was my move there.

3:28Amardeep Parmar:And you said about exits there as well, right? And one of the things I know you go into detail about is the all different exit options. So it's only found existing, probably don't really understand really what exit means for them and how to prepare for that. Could you talk through that as well? Like, how did you go about your exits? So I think, you know, this exits can be very tricky. Again, I think it's the constant battle between do I sort of, you know, go hard on technology and innovation and just sort of fill that out? Or do I quickly bring the commercials in? Let's say, you know, when you're looking at a seed stage is when you have to start thinking as a scientist or, you know, as an R &D.

4:05person, you need to start sort of packaging that in. And that will eventually also give you that, you know, thought for us on where could be potential exits, let's say, you know, three years down the line or seven years down the line or 10 years down the line. There's nothing wrong in starting to think about that. And I think, you know, it is imperative in this day and age where capital is very scarce and you need to sort of know that these are all your possibilities. And typically in your, you know, you know, healthcare, health tech, biotech sort of stuff. You're looking at strategic exits. You're looking at it could be a hospital chain.

4:36Could it be, you know, a pharmaceutical company? And again, with health care, I think exits come much sooner than you can expect. Of course, you can always build your product out to an IPO. And that's fantastic. But you always have the option of looking at, let's say, C, can I exit out? And, you know, these could be X number of, you know, options that's that's there for me. And I think, you know, that's sort of how you should as a founder keep that in mind.

4:59Amardeep Parmar:How did you think about which option is best for you? Oh, it's, it's, I think it's a number of different, I think you keep talking, you keep sort of looking at what would work well for the company, for you, you know, for the investor who's invested in you for so long and have, you know, your cap tables are split between all of these investors and yourselves and your founder, if you have them, as well as the company, you know, that sort of came in at the early, the founding team, if you will. And I think all of these sort of, you know, it's a mix of what best would work from a number perspective, from where did you see your innovation want to land and how would, you know, where the company is exited into, what are they doing with that product or that company beyond if you sort of started out to make an impact in saving lives or in, you know, reducing dollars in healthcare expenses if you want to see that through I think you know those sort of levers sort of fall well well in place in getting those exits out.

5:58Amardeep Parmar:And you mentioned like obviously with the experience you had in corporate beforehand how do you think that made you more effective as a founder or what helped you what hindered you by having that experience? Oh I'm a big fan of you know founders in this sector to sort of have that you know large corporate experience and again I think you can really crack on with how quickly you can move as a startup founder, just at how the generation is now versus, let's say, you know, 15 years ago when I actually started my companies. And I think the large companies really bring that structure into place, the administrative effectiveness, as well as, you know, who do you know in the commercial space that you can quickly get commercial traction with?

6:38And all that came through because of the large corporate bandwidth that I had. I don't think I would say that there was anything hindering. It all sort of added into the startup path that I actually moved into. So all good things.

6:51Amardeep Parmar:And you told me before as well, how one of your investors is Excel, right? Yeah. How did that process work? Because obviously Excel is one of the most famous VCs of all of them. And to get them on your cap table was obviously a huge achievement at that point. So how did you, like, how did that process work on committing them to invest? It's a funny story. So Axel Partners obviously is one of the most, you know, respected regarded VCs in the world. And, you know, I was right at the time when And they were looking at how best do we sort of do the healthcare investment thesis in India. So it was really sort of very opportunistic.

7:21They knew me from before. And I actually got my funding of, you know, a bunch of presentations, 63 versions, because Axel sent me back. And I said, look, this is just not it. It was about across to around 10 million. They really sort of put me through the ringer on what it was. But of course, a very different time than now when, you know, you've got a lot of really good innovations coming in. You want to do your minimum viable product. only then you get funded. But of course, you know, I think it was fantastic to have them on our cap table. They were amazing in terms of connecting us with co-investors for future rounds.

7:57They, you know, they gave us, again, you know, a very US perspective as well, where Axel Partners had done a lot of big bets in the biotech space. And of course, you know, my first startup was in oncology therapeutics and the second one was in AI predictive in cancer. So really a fantastic experience all through, you know, they were one of the best things that could have happened to us as a first-time founder.

8:17Amardeep Parmar:And so we're raising that money, right? There's one thing about raising it, but it's also then how to use it effectively. So how did you use that funding? And like, how did you think about that process of, okay, we've got this funding, we've got this backing. How do you make the most of it and maximize our effectiveness? So I think one more sort of good parts of having worked in organizations from before, we know how to make it very lean. So what we did really was, you know, as a company, just as a strategy, what were the different modes and pivots that we could do? while we're building our sort of the mainstream revenue generator.

8:48That was one. We invested heavily in commercial teams right up front. We had our scientific teams on board already, but kept them very lean. But we needed access to the market. So we invested heavily in, you know, sales footprint in different countries, in the US, in India, seven or eight different markets. I think that for us gave us a head start. we definitely kept our you know our offices very very you know bare minimum so basically lean was really the theme on how we would work through things and also expanding globally right that's

9:21Amardeep Parmar:one of the challenges for many people in health tech because the UK has a very different system to other countries as well so you mentioned one thing about having sales teams on the ground how else did you try to make sure that you had that path and that strategy to succeed in different countries? So both the founders came in from very global sort of backgrounds. So we had our inroads into people who could expand the markets there. We had partners already sort of, you know, right from the get go, you know, when we were actually licensing and novel molecules and oncology back in and doing the clinical trials, we already had our eyes and, you know, legs firmly out in different markets because I think we wanted that head start.

10:01Now that worked really well for us, right from we're a very strong commercial organization and i think a lot of founders today do miss that point think you know it can be a long runway when you're developing let's say a drug uh or something that's you know chopping down your uh you know drug discovery time by x or your costs and you can really get lost a founder can really love their product well and i think you shouldn't be loving your product so much i think you should be very practical about how can I make money off what I'm building? I think that if you have that sort of non-blinders on, I think you can really sort of make those monies come in over a period of time quite effectively.

10:39Amardeep Parmar:What part of that founding journey did you first enjoy the most, but also, I guess, the opposite? Which is the part that you don't miss about being a founder? It's an interesting question because I think when you're a founder, you're sort of all hands on board. You're doing a bit of everything. I think at one point of time, I was serving tea. as well along with my meetings in R &D and raising monies. But I was recruiting people in different sort of functions and so on. So it's very exhilarating because you're doing so much. So it takes away a lot of your bandwidth. But I think you always need to be able to step back ever so often and make sure you don't lose sight of what you started building and where you want to go, because you can really get lost in building your company out just from a human resource perspective, managing people.

11:33And I think managing people can be very tricky. I think the operational part of it can be very, very tricky when you're running companies. There are egos in play. There are strategies that may go differently. There are VCs that may come in and say, hey, you know what? It's lovely that you came up to this bit, but I would really like you to move to this bit and you may not really like all of that uh and i think that sort of temperance and patience to work through while keeping your core intact i think is what is

12:01Amardeep Parmar:required when you're a founder and i guess on the ego point as well right because that's something which in this space you sometimes have to deal with people with different egos have you got any tips for people right now who maybe have are trying to deal with that process right now of trying to manage people with different amounts of pride or ego but while also keep them involved as a stakeholder? Yeah, no, I think, you know, it's, I think founder personalities have got a lot to do with how well a company can come through the door in eventually, because it's a long haul. It's not, you don't have, in healthcare, it's not a three or a four year exit.

12:34It is seven, eight, nine, ten years. So you've got to sort of live with that, you know, multiple sort of personalities that evolve as you build a company as well. But I would always say that know your founder really well before embarking on that journey very well. And I don't mean to say, you know, you know, 10 weeks ago, you need to know that you're on the same tangent. You need to know that, you know, there should be a lot of transparency around what you're building, what your opinions are, constant check-ins. There should be receptivity and, you know, the sort of the fundamental, you should be receptive to feedback from your funders, your co-founder, your team, and be able to sort of balance that while at the same time also being a leader for the organization.

13:19I think that's sort of, you know, a mix that works well.

13:23Amardeep Parmar:You obviously, you transitioned from being a founder more into the investment world as well. What was your motivation there? So I think personally for me, it's, you know, it's spent a lot of time in large corporates. So, you know, and startups as a founder. And then I've always sort of, you know, helped VCs along the way with their own portfolio companies. I've actually, you know, helped startups raise up to about, you know,$160 million when they flipped from India to the US and so on. So that journey has always been very interesting for me to work closely with in the investing world. And I think for me personally, as a two-time founder, I think I wanted to sort of package all of my experience and see how the ringside or the umbrella view of how could I nurture a startup the right way because you know when you sort of have those those that discipline the partnerships the you know who can actually startups go out to and it made sense more for me from do I work on a single product or do I am I in a position now 20 years into my career to be able to sort of help you know biotech firms or med tech or you know life sciences or health tech go the extra mile I think that's sort of very interesting and exciting for me to be able to work with founders and be able to invest in the right ones.

14:35Because now I think you're sort of, there's a very, it's almost very natural to have that, you know, which, where is it going to trend? So I think, you know, it's sort of a great place to be, especially in this ecosystem as well.

14:48Amardeep Parmar:Hello, hello. I hope you've enjoyed the show so far. I'm Amadeek Parma, co-founder of BayHQ and the host of this show. For those of you who don't know, BayHQ is the community for high growth, Asian heritage, founders and investors in the UK. Over 7 ,500 people have attended our events. 200 people have been for our impact programs. And obviously, there's been over 250 episodes of this podcast. If you want to join us and take part in the programs and come to the events, go to bayhq.com forward slash join. We also just released our first ever book called Startups for Outsiders, which you can get on Amazon now.

15:27Amardeep Parmar:And the link is in the bio. Hope to see you soon at our event. Hope you enjoy the rest of the episode. Is there anything like any of your views that changed from being a founder and how you perceived investors to now that you're on the other side of the table like oh okay that's why these things work in the way they did. Have you found the things changed about the way you perceive things? I think I'm one of those people that's super super empathetic with founders I'm always putting you know my feet in their shoes because of where I come from myself and I think that only comes when you're a founder and I think you know the world is moving towards It's, you know, the operator turned investor, I think is a very interesting sort of a theme that's that sort of evolving.

16:04Right. You're no longer, you know, just an investment banker or a financial actually investing in you. So you've sort of got that scar tissue of, you know, what might have burnt you in your in your or, you know, for example, I've known founders who started companies back in the middle of COVID. I was a founder, you know, who started a company back in the middle of COVID and it was terrible. And I know that, you know, there's significant investments that go in, but I also know the reasons why you had to shut down. So I think that that's sort of an also. But of course, you know, I don't think being in the investor space is all that it's made out to be.

16:39Fundraising is hard, but I think it's a handshake that works really well when you're in, I think, as an operator, when you become an investor. And I hope for, you know, to see actually more fund managers in this space sort of take that on.

16:52Amardeep Parmar:And you also work at universities, right? And spin ups from universities. Can you tell us about what you do there? So I'm an alumnus of London Business School, and I actually sit on their private capital committee as well. So I'm an entrepreneur, I'm in residence, which means that we have, I think, the university ecosystem is one of the best in the world. If Boston is the hub for, let's say, biotech and so on, I think our university ecosystem is brilliant. There's just such fantastic technological innovations coming in. And so what happens typically is in my position, I actually mentor a lot of pre-seed stage startups that are very strong technology seeds in them, you know, from the Oxfords and the Cambridges and Francis Crick and UCL and LBS.

17:34And I then look at how best can we look at commercializing and go to market for these companies and help them with fundraising along the way.

17:43Amardeep Parmar:and like obviously there's gonna be people listening right now right at that stage maybe they have a technology but they're a bit stuck in the commercialization aspect and i think what interesting about biotech and medtech is that sometimes what happens is that like for a traditional startup for a tech startup you say like find the problem then find the solution but sometimes in biotech you might find the solution then work out okay how do i now commercialize this and have to work almost backwards right it's like you have the science you have some kind of innovation and how do you go about thinking about that how do you go okay, we can do this cool thing now.

18:14Amardeep Parmar:How do we then make this into a product or make it commercially viable? I think in biotech especially, so I think with health tech and med tech, there's almost, I think there's a way to look at what the gaps are in the market and then you could build products towards that. But I think in biotech, it's always science leading instead of the commercial or the gaps, right? I mean, you do need to know where your defensibility strategies are. Otherwise, you know, in this day and age, I think it's so hard when there's so many startups coming in. So if you have really strong IP routes that you can make out of your science that you're developing or your, you know, it sort of then moves into the whole, how can I then commercialize this about three years into what preclinical is done?

19:08and then how do we sort of, you know, open that out from a commercial space. I think it works a little differently across both these sectors.

19:15Amardeep Parmar:And when people are thinking about that, because one challenge I have, so for example, somebody interviewed yesterday, they are like eight years into their startup now, but the size is still being proven. And that's obviously a very different mindset. Like you said to, say, a B2B SaaS where it's like, okay, we can get this up and let's sell it in two years. Do you have any tips with people on that longer journey where they can't necessarily flip it? they can't grow very quickly at the beginning of, how do they keep going and keep that safe in what they're building? I think in a sense, I almost feel like, you know, you'll see a lot of really good biotech founders coming in as PhDs.

19:49And I think they've always already sort of mastered that art of doing the long haul education and they know what it takes to sort of be very gritty and stick on with what... It's a lot of passion for the science that you're developing. It's a very different sort of strain of DNA, if you will. But I also think, you know, what makes them work more efficiently is to get a set of advisors that are very strong commercially in the markets that they want to have their footprint in and help them, you know, build out their markets a lot better right from the get go. Right. I mean, you can always get in your commercial.