Brian Gormley Discusses The Evolution Of Venture Capital

Founders, Funders & Followers

Brian has been with Dow Jones and The Wall Street Journal for almost 17 years, and has a Bachelor's degree from UMass Amherst and a Master's in Journalism from Boston University. He began his career writing for local newspapers in the Boston area, and then moved on to writing for business pages. He then went to work for a publishing company that produced venture capital and private equity newsletters, which was acquired by Dow Jones. Matt asked Brian to discuss the evolution of journalism and his own work over the past 15-16 years. Brian noted that the industry has changed drastically, as technology has allowed for more content to be produced in a shorter amount of time. He also mentioned that there is now more pressure to report breaking news quickly, which has been challenging for reporters. Finally, Brian mentioned that he has seen the industry become more professionalized and specialized, as reporters have become more focused on a particular area of reporting.

Brian, a journalist covering healthcare and venture capital, discussed how he goes through the process of selecting stories to write about. He states that he is consistently writing at least a couple of stories every week. He also states that he receives many pitches from people in communications or at companies looking to be featured in the Wall Street Journal. Brian explains that he has themes in mind that he looks for companies and investors that fit into. He also looks for stories in progress that he can add to. Therefore, he is able to pick through the volume of information he is receiving to find stories that his readers will find value in.

The conversation discussed the evaluation process of companies and the idea that they are pursuing. The speaker noted that while a combination of an innovative idea and high profile investors certainly gets attention, the company still has to go through the same amount of scrutiny and validation. They also noted that it is important to keep an open mind when looking at any kind of company and the idea that they are pursuing, as well as the investors that have supported them in the market. Lastly, the speaker discussed that there has been a trend of more people raising money and starting companies, but it is uncertain if there has been a cooling of that trend in the past twelve months.

The conversation discussed the current climate of venture capital and investments in the life sciences industry. It was noted that funding is easier to come by at the early stages, such as seed and series A rounds, but that in the middle stages (series B, C, and D) it is more challenging. Companies are trying to reinvent themselves and cut back on staff and drug development programs in order to survive in the tighter financing climate, and this is leading to a consolidation of companies. It was predicted that risk capital will become easier to come by in the future, but that in the near term, venture investment will be more selective. The conversation then shifted to funds, with it being noted that venture capital funds have been raising record amounts of money for healthcare, with the ability to be selective in investments. It was also noted that domestic VCs are primarily investing in US companies, but there has been an expansion of global investment in US companies and international companies looking for attention in the US.

Timestamps

0:00:04

Covering Venture Capital and Healthcare for The Wall Street Journal

0:02:26

Exploring the Changing News Landscape with Journalist Brian O'Keefe

0:04:44

Evaluating Companies and Investors in the Venture Capital Market

0:06:42

Exploring the Impact of the Cooling Off of the Life Sciences Market on Venture Capital Investment

0:12:20

Global Trends in Biotechnology Investment

0:15:01

Interview with Brian Gormley of The Wall Street Journal: Exploring the Impact of Gene Editing and Gene Therapy in Healthcare

0:16:52

Interview with Wall Street Journal Reporter, Caitlin Christine

0:19:50

Interview with Brian Gormley, Venture Capital and Healthcare Reporter at The Wall Street Journal and Dow Jones Newswires

Highlights

I often meet with founders who have dealt with illness themselves and have gone on to dedicate through careers to eradicating it. I met recently with her name, Caitlin Christine she's the founder of a company called Gabby and it's a startup that predicts breast cancer risk for women and they sell a service to self insured employers. So she has a passing story. The name of her company is an average tuber of her mother and it's not unique, though I do find a number of entrepreneurs who have dealt with illness either personally or significantly in their families and friends and started companies to try to relieve that burden.

There is some concern about recipients law that makes it difficult to raise capital from certain countries. So I can't say that that plays out in every opportunity that comes up, but it is something on the back of mind of investors and entrepreneurs, I think, to the extent that you have foreign investors coming into the United States. But I wouldn't say it's a primary concern for most companies, at least in the United States, had a reason. Capital.

Even in their backyard itself, that sort of geopolitical landscape continues to play out as well, seemingly increasingly by the day. Tensions running high between the United States and certain parts of the world right now. Are you feeling any of that in terms of the kind of pitches and opportunities that you're seeing in terms of particularly out of China type of investment that we're seeing there into the US.. The reluctance any hesitancy or is it still kind of businesses, business and trade is trade.

Well, there's certainly global investors that are coming into US companies constantly, constantly sovereign wealth funds and where it's been a big source of capital for startup companies, especially during the boom years. Europe has a lively biotechnology industry. There's a fewer venture capital funds there, but it's still a source of great investment opportunity for investors in Europe and some in the United States who travel to Europe to fund some of the most promising companies there.. You do see some companies that start in Europe go public in the United States to gain additional visibility. So I would say that the biotechnology industry in particular has become increasingly global and that's a trend that's only going to continue to increase, I think.

Now, speaking from a domestic standpoint, US domestic standpoint and the VCs themselves, what are we seeing in terms of domestic VC funds primarily investing versus what are we seeing internationally? Are you seeing any difference in terms of how many entrants or participants in that? Do you see an expansion of that sort of global investment in US companies and then also corollary there sort of the international companies looking for attention in the US.. Any particular trends you're noting there as far as investment?

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