Justin Olshavsky - Pioneer Bio+Health Fund

[00:00:00] Giovanni Lauricella: ​

[00:00:00] What is it about the Bay Area? What does this place give you?

[00:00:07] Justin Olshavsky: I think ambition is just really embraced here in a way that I've never felt it in other places I've lived. In some of those places, ambition almost felt frowned upon. And this kind of the median path was just the expected one. You go work for a company, a big company, and you there's a limited amount of path.

[00:00:25] But here a couple crazy things. A 23 year old, myself at Berkeley, espousing this crazy idea. We are going to cool the brain and reduce brain hemorrhage and stroke. I think my prior going in was, like, surely this will be shouted down. This is crazy. Maybe it's a fun little school project, but we had serious venture capitalists, I remember talking to Bio, Y Combinator, Angel Investors, and people were taking it seriously. Now, on the venture capital side of the table I get it, because there's so many companies that have come from this sort of person who is willing to work really hard, and sees a different future, and Yeah, I don't think it really sunk in that I could be someone who was doing that until I moved out here.

[00:01:04] ​

[00:01:04] Giovanni Lauricella: Hi, everyone. Welcome to the MedTech Startup Podcast,

[00:01:10] Today, we're going to be interviewing Justin Olshalvsky, General Partner at Pioneer Bio and Health Fund. And the great, awesome story that we're going to be digging into is, he's not only a venture capitalist, He's an entrepreneur who became a venture capitalist, and we're going to learn about that transition and why.

[00:01:28] Lucky to have Justin here. Thank you so much for doing this and for your time. Really appreciate it. We're going to start off with a simple question Justin, who are you?

[00:01:37] Justin Olshavsky: First, thanks so much for having me. Yeah, so as you said, I guess the pilot overview trained as an engineer.

[00:01:43] Started a company, that company was acquired, and now I'm on the venture capital side of the table, deploying a fund. Originally from from Pittsburgh near and dear to my heart. Went down to the south from graduate school to Clemson University and studied mechanical engineering there a little ambiguous on what I wanted to do, definitely wasn't always interest in a certain company knew that was an area of interest, but where that interest really picked up was when I moved out to the Bay Area.

[00:02:07] And, we're in the Bay Area right now. It's, you probably feel it, it's in the water out here. It is. Did an undergrad in mechanical engineering at Clemson, worked as a defense contractor for a couple years, and decided that wasn't really what I wanted to do and chose to go back to grad school.

[00:02:20] So I came out here to do this joint bioengineering master's program at UC Berkeley and UCSF. I was,studying all kind of different sides of bioengineering, but the really interesting thing that came out of that program was meeting two of my classmates, who would go on to be my co founders of Voyage Biomedical, which is the company we started and spun out of our time as students there.

[00:02:39] I met Rob Schultz, who is a, he's a heart surgery resident at the time who was a classmate and was taking a year off to come do this master's with us, and Bridget Vaughan, whose background is in biology and studying bioengineering, so we had a pretty diverse array of backgrounds, and we had this crazy idea from Rob, who had just, was in the middle of a heart surgery residency taking some time off and in heart surgery they've cooled brains for a very long time, it's what enabled some very early heart surgeries and The basic concept behind hypothermia is quite simple, right?

[00:03:11] You cool down a biological system, you slow the metabolism, you give it a longer period that it can be without blood. You need this in heart surgery. When you're operating on a heart, you have to stop the heart from beating, you need to keep everything else alive. How do you do that? You cool down the patient.

[00:03:25] Rob had this idea that, hey, could we use this hypothermia that we use in heart surgery to reduce reduce damage to organs, especially the brain is really used in heart surgery. In, in other places, and this kind of ended up evolving into the concept that became Voyage. We were students, we came together we formed this team and we spun it out.

[00:03:45] We ended up getting funding. We were supported by some great people in the Berkeley ecosystem, like Berkeley Skydeck. We got our first funding from angel investors, who were largely professors as well as Y Combinator, who was a huge part of our formative experience. It gave us the ability to launch out and enter a company.

[00:04:00] Worked on it for several years, and the company was ultimately acquired. Which I'm sure we'll talk a little bit about over the course of this. And then, so after the acquisition of Voyage was, trying to figure out what to do next. Really love this early stage, start phase.

[00:04:14] Really love backing entrepreneurs, and I think my style is like a venture capitalist, is finding people. Like our founding team, who are very early, very enthusiastic, passionate about solving problems in biotech, in healthcare, in medtech. And, being one of the first checks in that early stage, pre seed stage round.

[00:04:33] And helping these people get off the ground and build companies. And very excited for the impact that could have. I think that's the really cool thing. As a, as an entrepreneur, you can have really deep impact in a very specific vertical. For us, it was like, reducing brain damage from stroke, using hypothermia.

[00:04:48] But, as a VC, you can expand that impact across many people and, if we're doing things right, we're able to support many people with building products like that without limitations.

[00:04:57] Giovanni Lauricella: And that was what led you to now being a general partner at Pioneer Bio and Health Fund.

[00:05:03] What I'd love for you to do is tell us all the nitty gritty details of what Pioneer Bio and Health Fund is. What you invest in, where you invest, what you don't invest in, size of check, size of fund, all that good stuff. Tell the world what Pioneer Bio and Health Fund is.

[00:05:21] Justin Olshavsky: So I'll start off with a little context because Pioneer Bio and Health Fund, is a part of a larger venture fund.

[00:05:27] Pioneer Fund is a fund that's made up of Y Combinator alumni. I mentioned that company went through Y Combinator, so these are all founders who made up this fund. And all of these Y Combinator founders have invested in the Pioneer Fund. So Pioneer Fund has three funds under its umbrella right now.

[00:05:42] There's a core fund that focuses on tech and is very focused on Y Combinator. And then there's an AI focused fund, and there's the Bio and Health Fund. So I run the Bio and Health Fund. The scale of Pioneers is pretty incredible. So we have over 360 YC alumni, who are all investors in in one of our funds at this point.

[00:06:00] And by my last count, it was like between 75 and 80 of them have backgrounds as operators in biotech, healthcare, life sciences, the things that we invested. It's something very unique about Pioneers that we bring a ton of operational expertise. And these are all, Y Combinator backed founders.

[00:06:17] Who have been, many have had exits, many are PhDs, MDs, a very deep venture talent, and bring that experience to to the company to be invested. A little bit more on who we are and what we invest in as I mentioned earlier, but we invest very early stage like having this sort of counterfactual impact, being able to be I think there was a stage when I was in grad school, as I described and was considering whether we could start a company.

[00:06:38] If you have no funding, it's hard to go off and work on a company by yourself for a very long time. And so I think Y Combinator plays this role in a lot of narratives. When you listen to founders they're often one of the first, people to believe and write a check. We also have a bunch of great angels who are professors who did that.

[00:06:53] So we love to be at that stage. And so I would define that as pre seed and seed stage. Like the first or second round. And it could be as early as like friends or family. There's, semantics around what you call these rounds, but yeah, some of the early checks at the very early stages, and since we have all this operational expertise and, we, people in all different camps, so myself, obviously I have medical device experience deep experience in stroke, my partner on the fund, he was on the human genome project, he was like, been in genomics since day one.

[00:07:23] But then we have 80 people across, every vertical you can imagine. I think we're great with invest early support. And, ideally enable them these entrepreneurs to start a company. But then also help them with some of the logistical things to get off the ground.

[00:07:35] Because there's a lot of commonality when you're starting companies, From like simple financial things, like corporate setup. But then also the specifics of MedTech and biotech and life science regulation and reimbursement and all this stuff.

[00:07:48] Giovanni Lauricella: Do you invest thus far, geographically, coast to coast? Do you, can you do internationally?

[00:07:54] Justin Olshavsky: We do internationally. Yeah. have some awesome companies in the portfolio. See, so on the like medtech, biotech side, I'd say that it's usually US, maybe a little bit UK. See less of that globally, although we'd be interested if there was some.

[00:08:06] And on the healthcare side, so we also invest in, in healthcare. And have invested in some of these companies and places like India, Latin America.

[00:08:14] Giovanni Lauricella: So you're already investing out of the fund?

[00:08:16] Justin Olshavsky: Yeah.

[00:08:17] Giovanni Lauricella: Able to share how many investments you've made or roughly?

[00:08:21] Justin Olshavsky: We have, so the fund will be 40 investments in total is our target.

[00:08:25] So quite a broad portfolio. And I think, we write we, we write somewhere between 50 and 100k checks. But at the stage we're investing, this is pretty impactful. And we also are able to bring other funders to the table oftentimes. Having network of people in the space. Yeah, so we've invested. I believe a little less than half. We're about 15 investments.

[00:08:44] Giovanni Lauricella: When you say you're looking at medical devices,

[00:08:47] is it a learning curve for you when you have to look at technologies that go beyond what you had to go through as an engineer to sell off that company?

[00:08:55] Justin Olshavsky: Yeah. It's one thing about having a great and deep bench of experience.

[00:08:59] I think to make the pioneer model work, we've got to rely on our experts in those spaces. So I am very excited. As I mentioned, I'm a hard ranger in my training, so I love geeking out. We mentioned like Andromeda Surgical, one of the med device companies in our portfolio. Love getting into the technical weeds of that.

[00:09:15] But when we're looking at synthetic biology companies where I have less experience, there's still some commonalities, but we have an awesome bench of other folks who are part of the fund who can really go deep on the technical nuances of that. We often something that I love about Pioneer Fund is, like, when we get off calls with entrepreneurs, or at the end of calls with entrepreneurs, I feel like probably 25 to 50 percent of the time you guys have the deepest technical knowledge. And it's because we bring people, to these conversations that have built companies in these verticals and are probably, maybe 2 to 10 years along this journey past these underwriters.

[00:09:48] Giovanni Lauricella: Let's play a succinct game and then after that we'll go into the bigger conversation. The succinct game is, imagine everyone who's listening in right now is an entrepreneur of sorts and they have this slide deck that they're willing to send you. And based on what you're going to say, it's succinct this is what we invest in, you have to be this, and this is what you should be raising, and this is the size of check you should be expecting.

[00:10:07] I'm either going to click send, and send you my deck, or not right now for me, or maybe just not the right fund. Tell us that. Tell all those people listening why they should send you their deck. What do you actually invest in, in the size of check? If you're this, click send.

[00:10:22] Justin Olshavsky: Yeah. If you are building an impactful, medical technology that kind of goes over med tech, biotech, life sciences, all of this you're at a very early stage, so pre C to C, first or second, round of financing, and you're looking for people who have been there before who can support you on that journey.

[00:10:43] Giovanni Lauricella: Love that, I'm sure. Yeah, we're quitting soon.

[00:10:46] Justin Olshavsky: And yeah, like we, we I know a lot of VCs are like, thesis driven, and we certainly have, we have like lots of theses, like I've got lots of theses about medtech, we'll probably talk about, I've also got a thesis about synthetic biology and all this stuff, and we've got all this expertise, so other people do as well, but I think given the ethos of the fund, given that we're all founders I think it would be a fool to think that I know more than the best synthetic biology founders.

[00:11:07] So we want to remain very open. And, it's not we're not like, oh, like we're only doing cervical probiotics, or like catheter based interventions or something. It's no, I want to see what the best founders are building, and I want to join them on that journey at their own stage.

[00:11:18] Giovanni Lauricella: So I want to ask you two questions before we get into the meat of your whole story that you've already alluded and told us bits and pieces of so far.

[00:11:24] So the first one is, From where you were to who you are today, who's a mentor that you'd love to give a shout out to?

[00:11:33] Justin Olshavsky: Man, look, there's so many to talk about but one that's particularly prominent in med tech and he's actually a venture partner with Pioneer Fund as well, is is Nick Damiano, who's the founder of Avail Medsystems and Zenflow, and now Andro Andromeda Surgical.

[00:11:46] And so super super storied MedTech entrepreneur. And we originally connected with them, actually, When we were originally applying for YC, one of the YC partners, Dalton Caldwell Nick had gone through YC with his previous company and Dalton connected us, and we were I had just moved to the Bay Area, I didn't really understand that the start of people were just so helpful and surprisingly and Nick more so than probably even most, and he invited us down to his, I think they were a series B, A or B company at the time, a big office right here in South San Francisco.

[00:12:18] He made, we probably talked for two hours about what we were talking about. We had, looking back, had no idea what the heck we were talking about. But he humored us and like really helped us and like really went deep. And yeah, like forever paying it back, to people like that.

[00:12:33] And I think like a lot of being, I do a lot of mentorship and really enjoy doing this for startups now because people like Nick were so impactful. And a cool kind of way to close this loop. Nick was running ZenFlow at the time a couple years back. He left and started another company Andromeda.

[00:12:47] This was actually just in the last six, twelve months ish. And it was right around the time we were spinning out this fund. After Nick was our first mentor, we got to be the first or second check into his new company. So it's cool that we've now been in this ecosystem so long that now I can be an investor in Nick's company when he was a mentor to us five or six years ago.

[00:13:06] Giovanni Lauricella: That's awesome. The next question is building a medical device startup company or being an entrepreneur, and is being an investor in the medical device or medical technology companies, is it luck or effort? And it doesn't differ based on the entrepreneur investor question.

[00:13:26] Justin Olshavsky: So being like a good entrepreneur, being a good investor, I think it's so much effort. I think there's, I'll probably just quote it, but like an expression of a lot of effort creates luck. Cause there's certainly aspects to it of that. Butyou have to be trying really hard, you have to be working really hard and focused on something to create that serendipity of luck.

[00:13:46] So I guess, let's think about on the entrepreneur side, there's more operational things as like an early stage medtech entrepreneur. I would say you, you have I mean you're just Battling on all angles, like I think it's like the Biodesign book, and they've got like these seven categories, like IP, and regulatory, and reimbursement, and R& D and all this stuff, and so you're like constantly jumping back and forth and trying to do this so I think you just, there's just a lot of effort that's just part of the course but then you've also gotta be, probably working extra hard to create that luck, and I think a lot of, when I think of luck, I think of like serendipitous connection, and I think like a lot of like serendipitous connection, meeting the right people at the right time it's a little bit of planning, but there's also just working hard enough to be there for those conversations.

[00:14:27] Giovanni Lauricella: New question that came to mind, because you've alluded to the Bay Area, there's something in the water, and serendipitous connections that you just brought up.

[00:14:35] What is it about the Bay Area? What is it about what everyone knows, tech, community, this is where you come to build a company, a start up company, the start up world. What does this place give you?

[00:14:47] Justin Olshavsky: I think ambition is just really embraced here in a way that I've never felt it in other places I've lived.

[00:14:55] That's like Pittsburgh, Pennsylvania. Clemson, South Carolina. I spent a little bit of time in Melbourne, Florida. And You in, in some of those places, ambition almost felt frowned upon. And this kind of the median path was just the expected one. You go work for a company, a big company, and you there's a limited amount of path.

[00:15:13] But here it's I a couple crazy things. A 23 year old, myself at Berkeley, espousing this crazy idea. We are going to cool the brain and reduce brain hemorrhage and stroke. I think my prior going in was, like, surely this will be shouted down. This is crazy. Maybe it's a Fun little school project, but we had serious venture capitalists, I remember talking to Bio, Y Combinator, Angel Investors, places like this and people were taking it seriously. And now, on the venture capital side of the table I get it, because there's so many companies that have come from this sort of ambitious, often young, but not necessarily person who is willing to work really hard, and sees a different future, and Yeah, I don't think it really sunk in that I could be someone who was doing that until I moved out here.

[00:15:56] Giovanni Lauricella: That's awesome. So let's get into your story now. So you started Voyage and you spun that out of your master's program?

[00:16:04] Justin Olshavsky: It wasn't, it was actually like a side project, so it wasn't anything we were working on at the university. It was something an ongoing conversation.

[00:16:11] It came out of my co founding of medical practice, more than anything.

[00:16:14] Giovanni Lauricella: But you literally left academia and then became an entrepreneur day one. You didn't have a job in between?

[00:16:18] Justin Olshavsky: Yeah I was able, I was actually able to time it well. I got the master's degree right right around the time we got funding, yeah, thankful for for the timing working out, not having to do, an interim job or having to drop out, although I guess that's somewhat the Bay area dream.

[00:16:34] Giovanni Lauricella: So I wanted to capture the Voyage story then because it ultimately led to an exit, which then gave you the credibility and traction and now here you are as a venture capitalist.

[00:16:41] But when you were this youthful entrepreneur, just got your master's, now you're this entrepreneur in medical device, how did you even learn or go about? Raising capital. You have this shower idea or you share it with friends that come up like, Okay, we're going to go try this crazy idea in a medical device.

[00:16:58] But once you start there, it's no longer simply an idea on a napkin, right? You have to start spending money on tools and materials, etc. And that money has to come from somewhere, especially after you've burned through your own initial pockets, if that's what you did. Yeah. But when you had that aha moment of, Oh wow, we need to start getting external money to fund this idea. How did you even go about doing that?

[00:17:20] Justin Olshavsky: Yeah I mean I think like a lot of fundraising, maybe like the first thing you have to do is learn just like the lingo, what goes in a pitch deck. And I was actually just talking to some young aspiring entrepreneurs about this, but I think a university is a good place to do this because you can really learn a lot of this stuff.

[00:17:35] So we took an incredible class at Berkeley Haas, which is the MBA, the business school at Berkeley with Professor Kurt Beyer, who is an awesome supporter. And it was this entrepreneurship class, and it was very project based, and we worked on Voyage kind of as a project throughout this class, and it just taught you all these, all the basics of how to start a company.

[00:17:53] What goes in your pitch deck? Oh, we need a marketing slide. Oh, we should talk more about our team. And things like that. We learned the basics. And recognized, as you say, that, we need a little more funding. We had a little bit of friends and family money. I guess probably like below thousands of dollars.

[00:18:06] And we were a very scrappy team. And I think we, we carried that ethos through. And I think we still do in, when I work on engineering things. But we were able to collaborate Rob, my co founder, came from University of Calgary, that's where he did his surgical training, and he came down here for the master's.

[00:18:20] Me on the engineering side, so I was the CTO of the company, was learning how to build catheters from what you buy on Amazon, essentially. Which was a very fun process. I've learned a lot more about how to build catheters now. tHere's this catheter but then we also have all these mentors, right?

[00:18:36] Mentors on, Nick was, as I mentioned, an incredible mentor on the getting a med device company off the ground front. We had technical advisors who had built catheters before and would just give us, we, we called them like cheat codes for like how to do this. But yeah, being like willing to work really hard to create that serendipity and then like actually apply those learnings.

[00:18:55] You're creating a story when you're going out to investors and there's obviously less expected of you when you're taking the first money. But you have to show that there's some promise in there. It's putting together the story from like the literature, like all of this literature speaks to what we're doing is going to be safe and effective.

[00:19:10] And then, hey, we have the skills to build. It's a catheter system, and hey, we've we've done a little bit of research, or worked with other researchers who have done similar stuff. And and that was ultimately what unlocked raising our first capital.

[00:19:23] Giovanni Lauricella: Throughout Voyage, then, if you can share, what did you raise?

[00:19:26] Did you have to raise multiple rounds? Was it one round? Did you only raise from angels? Did you ever have to go to institutional funds? How did that look and feel like?

[00:19:33] Justin Olshavsky: Yeah very little bit of friends and family up front, and then we raised what I'd probably call a pre seed round. So this was Ycombinator, some angel investors.

[00:19:41] And if you know about Y Combinator, so it's a three month program and there's a demo day at the end of it. We worked very hard, did some pre clinical studies that produced some good results and were able to raise some capital on demo day. So we call that like a seed round. And a very non traditional thing about Voyage, we only operated the company for about another year after that seed round.

[00:20:01] Until what we were doing was ended up being quite interesting to a large company that was thinking about similar things. And we were thinking about going out to raise the next capital but it ended up we got an offer for acquisition. And that, as you've already heard went through and we made enough self inflation.

[00:20:16] Giovanni Lauricella: You did that early stage family and friends, raised a seed round from angels and Y combinator. Yeah,

[00:20:21] we had a pre seed. Pre seed. And then a seed on the inside of that. And then

[00:20:24] you got taken out by a corporate. Yeah. And then My question for you is, obviously it didn't sound like you had to operate the company for the traditional seven years of a medical device company, so an early acquisition took place, but, I love asking this question to people who have successfully exited a company.

[00:20:43] Unique answers come back, but, this crowd of people who have never been entrepreneurs or CEOs, etc., and they think about all this, buzz about exits and acquisitions, or I'm going to build a company and sell it for hundreds of millions of dollars, and I'm going to go to Fiji and drink Mai Tais for the rest of my life, and all that.

[00:21:02] Is that what an exit looks and feels like? What are the pros and cons to an exit? You've been through one now, like, when you started the company, and now you've been on the other side of the exit tell us about that journey.

[00:21:12] What does it look like?

[00:21:13] Justin Olshavsky: Yeah. So I think there's three different stages of exits.

[00:21:16] Ours was, on a bell curve of age, it's very much on the left side, very early. Now if you're running a company that's doing a hundred million in revenue, your commercial medical device, that exit probably looks a little bit different and you're just, integrating that to a portfolio of a larger company.

[00:21:30] Yeah, I think It was an awesome experience. It was, I think the perfect thing for our product to go to a big company, the company that we were acquired by. It's focused on stroke. They've done this before, right? They know how to bring medical devices. It went from like I think the nicest like change in my mind post acquisition was like, there's so much risk with a kind of unproven team of founders.

[00:21:50] We're learning a lot as we go. And obviously I think we were doing quite good, but it just felt very like automatic, this company had been there, done that, it slotted into an existing pipeline. So it was great for the technology. Given that it was pre clinical, we still had a lot of work to do.

[00:22:04] So I spent two years working at the company. I'm not there anymore, but for for two years post acquisition went and was, working on on the development of this product because it was still pre clinical. Now I think yeah, like, how did The traditional medtech exit, maybe where advice, either in clinical trials or commercial probably looks a little bit different.

[00:22:23] But generally, I think it's good. Like the, probably the other side of that and I think this probably applies across all of these stages, is there's always going to be some sort of cultural conflict. Like it's, the, just the act of a large company and a small company joining creates some amount of cultural conflict.

[00:22:38] That was, frustrating for me on a day to day basis. That's and just losing autonomy, especially, I think, as a founder. You go from running everything to running a very small part of this much larger company. Pros and cons, but I think it was an awesome experience. It was great for the technology.

[00:22:55] Giovanni Lauricella: And then, that gave you the confidence, especially being with them two years after the acquisition, right? So you've been through that, you know what that looks and feels like. You've been through that operational execution experience. Did that give you the confidence to say, Hey. I want to go make a bigger impact and be a VC and help out the entrepreneurs that I was X amount of years prior.

[00:23:13] Justin Olshavsky: Yeah, totally.I had plenty of time, at least compared to when I was running the company. It was a little more laid back being at the larger company to think about what I want to do next. And, yeah the kind of big branching point in that decision was like, how I described it.

[00:23:27] I feel like it made such a deep impact, hopefully, with the Voyage work, and, that work's not done. But the, you're able to make such a deep impact as an entrepreneur. Do I want to do this again, or can I scale that and talk to a lot of people who have been on both sides?

[00:23:41] There's a number of advisors I've had who are, both VCs and founders and have straddled that. And yeah, I think, I was very excited about this kind of scale impact that, that could have. And it's been really fun, although, yeah, working in a very different way to raise the fund and now we're deploying the fund.

[00:23:58] Giovanni Lauricella: So you brought up an interesting phrase that I was going to piggyback off of, which I'll do now, is both sides. So you've seen now both sides of the table. You have been an entrepreneur, gone through an exit, and now you do see the institutional investor side as well. What are some of those nuances?

[00:24:13] And what I mean by that is, what do you have more respect, sympathy, empathy for now as an investor for entrepreneurs. And what are some of the a ha moments as an investor now that you didn't have when you were an entrepreneur? You're like, okay, I'm out there trying to raise money or helping my team raise money.

[00:24:31] Everyone's saying no, until you said yes. But you're like, okay, now as an investor, now I understand why that happened. Now I understand why that happened. What are some of those nuances?

[00:24:42] Justin Olshavsky: Yeah. I think we, as a fund and myself personally, having been entrepreneurs, and I think you talked to many entrepreneurs it's really good to have former entrepreneur investors on your cap table just because you have that empathy for what it's like to do a company.

[00:24:55] And someone who comes from a more financial or like business background probably doesn't have that as much. So yeah, try to be, and yeah, try to remain very grounded and empathetic for founders knowing they're in the trenches of knowing all of the minutiae that gets challenging all the stuff that we went through with Voyage.

[00:25:13] Yeah, I think on the things that I realize now as an investor that maybe I didn't appreciate as a startup founder is one I guess you, as a founder, you go out to venture capitalists, and you pitch them, and, especially as technical founders in MedTech, a lot of people come from technical backgrounds, maybe medical or engineering backgrounds.

[00:25:31] These founders are often so focused on the technical details, And that's often, obviously you need to show that there's technical validity to what they're doing. But what makes the venture asset class work is showing that this can become a business. Not just a business, but a very large business that, can scale up to a reasonable size.

[00:25:50] And then, obviously the venture model, there's an exit, and that capital can be distributed, fees, etc., etc. But, yeah. I had heard, going back to this Berkeley class, the importance of market size, you have that Tam Sam song like these concepts, and it didn't really sink in, like, why you talk so much about that, but and I was an investor, you can really see the difference between something that maybe is applicable to medical technology that's only applicable to a very small patient population, or solving a, maybe not a massive problem, you can see how that would have trouble scaling versus something that's, very The affordable to a large Asian population really drives improvements in clinical outcomes in a way that payers would be interested in.

[00:26:31] So yeah, it's something that I would like to emphasize to founders in our portfolio and in our estate founders that I talk to is detach yourself from the tech a little bit, think about market size, think about how are you going to build this organization to be large and sustainable to actually reach that market.

[00:26:46] Giovanni Lauricella: So to jump back into the Pioneer Fund and the Pioneer Bio and Health Fund. What you've done, especially, you said that the Pioneer Fund is part of Y Combinator and then there's three styles of funds underneath that Pioneer Fund. Do you happen to run the BioHealth Fund?

[00:27:00] Justin Olshavsky: Actually, point of clarification, so we're not part of Y Combinator?

[00:27:03] The fund is Y Combinator alumni. So the people who are part of the fund have all gone through the Y Combinator program, but we're not actually affiliated with the, with Y Combinator. It's a separate venture fund.

[00:27:13] Giovanni Lauricella: Thank you for sharing that. So now that I got that clear When you're running the Bio and Health Fund, is it, for all those people who are listening, we're going to get into the mechanics of actually becoming a VC now.

[00:27:25] Is it circumstantial, is it a unique aspect for you to be one of three and kind of collaborate or piggyback off of a large fund? And is it easier, more difficult, just different? Rather than saying, hey, I'm going to start the Olshavsky fund?

[00:27:40] Justin Olshavsky: Yeah. Yeah I think it's definitely advantageous and glad to have done it under this umbrella.

[00:27:44] The advantage is shared infrastructure. The Olshavsky Fund, this hypothetical fund if I were to start it myself would be just that, and I would be wearing every hat that's looking good in a real estate startup. And maybe those hats are a little bit different. I wouldn't be, fighting patents, per se, but I'd be doing a lot of financial back end and one of the most incredible things about working with an established fund and building under this umbrella is that there's established, we have a CFO who handles a lot of our, handles the is much better than I would be at handling nuanced financial things.

[00:28:14] And we have a whole team of support staff. We have the partners on the Pioneer Core Fund. The original Pioneer and core tech fund that focuses on YC have been running this fund for four or five years before the Bio and the AI fund started. Implicitly have mentors who have been there before and could help on things like fundraising and could help on things like and then I guess the other thing is There's already an existing infrastructure, which is non trivial.

[00:28:40] We have we have, lots of, we've built a lot of our own software just to make, you can imagine, you have 360 people you're trying to coordinate across all of these companies that we're looking at. So we have really detailed software that helps us coordinate all these people, pull people into the right conversations, make decisions quickly and in a timely manner.

[00:28:57] So getting the piggyback on all that infrastructure, it saves a lot from having to build that yourself. And you get to work with, I think everyone being Y Competent alumni, you get to work with a lot of founders, and they're just very exciting people very energizing, very ambitious.

[00:29:10] They've been there, they all have similar shared experiences and so it's awesome to get to work with them.

[00:29:15] Giovanni Lauricella: So the mechanics of setting that up, so it sounds like it's nice to be able to piggyback off that infrastructure, but I'm sure even having been a first hand fund manager, there's a lot of learning lessons and nuances and Building the back end of what you can teach us.

[00:29:31] What are some of those mechanics of, okay, Friday, you're an entrepreneur and working with the person or the company that acquired you. Monday, you're now a VC, right? What happens there? What was your first days? What did you have to set up? What was it like going out and raising capital? Tell us the nitty gritty. I almost like to paint by numbers.

[00:29:49] Justin Olshavsky: Yeah lots of like legal structuring in, that goes into a fund figuring out we did have some existing infrastructure, but figuring out who would be doing a lot of the financial backing of the fund. So there's a couple good service providers. We use AngelList. They they help, structure, give you boilerplate documents for setting up the fund.

[00:30:07] And we also had the advantage of, we had existing funds. Pull a lot of this information together and then, find the rights at legal counsel and rights service providers to be able to help us set all that up in the right way. So that was like, maybe challenge number one, just figuring out how to structure a fund is different than starting a Delaware C Corp startup, which is a lot easier.

[00:30:26] And then, yeah the next big hurdle is, okay, you've got the structure in place, now you've got to go out and raise this fund. And found I think an interesting learning for me. So when you're raising as an entrepreneur, you have these venture capitalists, they hang out the shingle, you know they are looking to invest in startups.

[00:30:44] That's not necessarily the case for LPs, Limited Partners, who are the people who invest in venture funds. Because these are usually like, it could be really anyone from like a individual to a corporation to a trust or something. But, yeah, they invest across all asset classes. It's not venture capitalists just invest in startups, whereas LPs invest across all asset classes.

[00:31:07] And there's obviously people who are more interested in venture capital, so you go out and talk to those folks. We were lucky to have, existing LPs within the Pioneer Fund network that made a lot of those initial conversations a little easier, allowed us to raise a little bit of capital right off the bat, and some interest in bio.

[00:31:23] But, yeah, going out and just, it's just you can't just go to, there's no sand hill road, you have to find and navigate where LPs hang out. And then even, on top of that, if you're competing across asset classes competing for attention, us, as a bio focused fund, had to make the case for venture capital.

[00:31:39] And the case for why biotech, healthcare, medtech, life sciences are a very interesting place to be investing. It was, it's good, I think the fun thing about fundraising is you probably go out, get slapped in the face in the first couple conversations, but it makes you really ask hard questions of yourself, refine the pitch, and have, it gives you a very strong conviction in what you're doing, because if you don't have that, you're not gonna be able to convince others.

[00:32:03] Giovanni Lauricella: Having raised funds on both sides now, the, Which one is easier or are they just different?

[00:32:09] But when I think about

[00:32:10] being in your shoes where you were an entrepreneur with a product based company and you were going and selling that story and that pitch deck to potential investors. And that investor has to make a decision and say, I'm investing in that technology.

[00:32:25] And maybe first and foremost, I'm investing in that entrepreneur who's developing that technology. But it's also a tangible technology, right? So worst case is they're investing in the technology's bright future, independent of who might be the executive change management that's going to come along the way where it's not you anymore.

[00:32:40] But they're investing in the technology. When you're raising capital for a fund, You're selling yourself, your team, your service, your word, your potential, but there's really no product. Yeah. Is there a tangible difference in raising capital in the asks and also the feedback?

[00:32:59] Justin Olshavsky: Yeah, it was interesting, because like my background is sort of product development, right?

[00:33:02] Like I was developing, essentially like the main person developing the Voyage product during when we were operating the company. And. See, it was weird because you're used to thinking about the product and the total market and all this stuff but yeah, as you said, if you think of the product for a venture fund, it's like the manager is for pioneers, maybe a little bit more than just myself and my partner Dave, who run the fund.

[00:33:23] It's, also this incredible team of venture partners you bring to the table, but yeah, that's the story that that, that is your product that you're going out to raise with. So I think it's, maybe more similar than different between the two, as long as you find people, you're just you're painting a compelling narrative you obviously believe in what you're doing, you that's why you started this, that's why you're spending your time working on it and then just finding a good way to communicate that to the right people is like the, is the challenge.

[00:33:50] Giovanni Lauricella: My last question, and this has been fantastic, so thank you very much for doing this. Speak to a metaphorical room of use from those years ago before you became a venture capitalist and you were an entrepreneur. And in other words, there's a bunch of entrepreneurs in the room, they're all developing medical device startup companies, and let's just say it's in the back of their mind that they could become venture capitalists eventually.

[00:34:16] Why should they become, or why should they consider being a VC after being an operator? And also more importantly, why shouldn't they?

[00:34:23] Justin Olshavsky: I think it's a really good way to scale impact. if you go really deep as an entrepreneur and you can be more wide as a venture capitalist I think, you can help on a, like an industry level.

[00:34:35] Medtech is actually a fairly small world. Like, when it comes to it, I feel like I, run into the same people. And one fund that supports, early stage, very ambitious medtech companies could really make a difference in that field. So you like, not just maybe like a single indication like stroke, but if you run maybe like a surgical robotics focused fund, you could you have a chance to invent or help support that whole industry. I have a friend and colleague who did this in longevity. And, like, when she started investing in longevity, it was a very nascent field. But was able to find really passionate people about it, support them from their earliest stages.

[00:35:10] And now it's actually crazy because longevity companies are quite hot. And when she started in this it was maybe something that not a lot of people are comfortable talking about.

[00:35:20] Giovanni Lauricella: And then, any reasons why they shouldn't be thinking about joining VC, like any downsides?

[00:35:26] Justin Olshavsky: Yeah, if you don't like, dealing with a lot of financial stuff there's the, I guess the, for me, very fun part is dealing with entrepreneurs, getting to support companies at the earliest stages, but there's also a big financial piece, being able to, manage other people's money, being able to go out and raise money and make sure that, all the money's going to the right places. So that was a bit of a new experience, thankful to have infrastructure of Pioneer Fund that supported that it would be harder with the Olshavsky fund for instance. But I was doing it all myself which I think is probably part of the reason that the Pioneer model of building this under an existing fund structure was really great for what I was looking at.

[00:36:02] It gives me more time to focus on what you can probably tell I'm quite passionate about, which is like working with these early stage companies and helping support them. I

[00:36:12] Giovanni Lauricella: couldn't think of a better place to end right there. And I just want to say thank you very much. This has been an amazing experience learning about what it means to be a MedTech entrepreneur who graduates into being a MedTech, HealthTech venture capitalist.

[00:36:27] And we just heard Justin Olshavsky general partner of Pioneer Bio and Health Fund, and his entire awesome story on the Med Tech Startup Podcast where we just got inside his head, his heart, and his guts for watching him do what he does. Thank you so much, Justin, for doing this.

[00:36:44] I really appreciate it. Thanks so much for having me. Thank you.

[00:36:49] Justin Olshavsky: ​

‍