Notwithstanding the positive (informal and formal) feedback I’ve received regarding kicking off the Alumni Showcase, my time, time zone, and work load constraints unfortunately preclude more frequent interactions with Tuckies and hence, blogging. A sincere vote of thanks to the subjects of my posts – venerable Tuck alums – who are always willing to give me a patient hearing and set aside valuable time to chat with me on a variety of aspects of their lives, career, family, and other causes that are important to them. Without their enthusiastic support, this series wouldn’t have taken off the ground. As always, readers’ feedback is appreciated – it will help me bring out a better product on this platform.
Brent Ahrens, T’97 – General Partner, Canaan Partners.
I had first met Brent back in the fall of 2008, when he was visiting Tuck to speak about the prestigious Kauffman Foundation (Brent is a Kauffman Fellow, Class of 2001 – more about the Foundation later). I distinctly remember speaking to him after the session about VC as a career after business school, and of course, the Kauffman Fellowship. What struck me during that meeting – and which has only been reinforced time and again – is how accessible Brent is! In person, he is a delight to speak to. As for email, he makes it a point to respond within 24 hours (unless, of course, he is traveling), and is always willing to lend a patient ear to Tuckies wanting to discuss career options and give candid advice. We’ve met a few more times since then, both in Hanover and in Canaan’s offices on Sand Hill Road, and most recently over this past summer when Brent was in Mumbai during a brief visit to India.
In each of these meetings, his passion for all things healthcare comes across effortlessly, and that’s no surprise. After completing his masters’ degree in Mechanical Engineering from the University of Dayton, Brent joined a small technology company where he was tasked with developing plans to get funding for the research being undertaken. This work gave him the first insight into spreadsheets and understanding profit and loss. From there, he moved to healthcare giant, Johnson & Johnson, where he worked in different areas – business development, commercial marketing, sales, and product development. His technical work earned him several patents during this period. The exposure to healthcare that he got at J&J – more so, gauging the needs of the market place, developing a product that meets those needs, the logistics involved – created a strong impression on him and he decided then, to weave his career around healthcare, not so much in terms of technical aspects, but more in terms of becoming an enabler of healthcare focused businesses.
MBA was a logical next step for him to pursue his career goals. He got sold on Tuck when he visited the campus for a day. The small class size, the way the professors engaged students in discussions within and outside classrooms, and the camaraderie amongst students clinched the deal. While at Tuck, one of his classmates, Jonathan Perl, introduced him to the Kauffman Fellows Program.
The Kauffman Fellows Program
aims to develop global leaders in venture capital through a 24-month apprenticeship during which, a Kauffman Fellow is matched to a venture capital fund where the Fellow works full-time and is mentored by senior partners of the fund. In addition to the apprenticeship, the Fellows attend frequent sessions where practicing venture capitalists and speakers discuss the various aspects of VC in both the for-profit and non-profit realm. The opportunity to listen to and learn from world-class speakers and the tremendous networking that results from these sessions makes the Kauffman Program a truly sought-after Fellowship globally. Needless to say, this is an extremely selective program in which only a handful of individuals are selected each year from thousands of applicants. For instance, the number of Fellows back in Class of 2001 was 11. In the latest class, the number is 35.
When I asked him how the Kauffman Fellowship has evolved over the years, he had this to say: “Today’s Fellows come from diverse backgrounds and there’s a lot more international flavor to the program with the class being made up of individuals from distinct geographies such as Norway, Middle East, Mexico, India, South America, Africa, and South East Asia. There are more minorities in the program now, and it is very reassuring to see the ongoing impact the Fellowship is having on venture capital worldwide.”
Brent and Jonathan both applied for the Fellowship. Jonathan qualified, but Brent did not. After graduating from Tuck, Brent took up a job with a small healthcare focused company in the Bay Area, General Surgical Innovations (which was later acquired by Tyco). Still, Brent never gave up on the idea of becoming a Kauffman Fellow. With encouragement from Jonathan, Brent persisted and was accepted into the Fellowship a year later. As a Kauffman Fellow, his apprenticeship was at Canaan Partners within the purview of healthcare investments. He has been with Canaan ever since and is now the general partner investing in healthcare. When he is not actively working on a deal, he can be seen coordinating and speaheading the fundraising process. Just this year, Canaan raised its Fund IX with a corpus of $600M in what is arguably one of the toughest fundraising environments in a long time.
Canaan is a technology + healthcare focused fund that was founded in 1987, which also has offices in Israel and India. The fund is typically the first institutional investor in the companies in which it invests. Roughly 2/3 of the partnership focuses on technology while the remaining 1/3 focuses on healthcare investments. The fund aims to invest $12-15M in a given portfolio company over the life of an investment with a target ownership of 20% in the company. They are stage agnostic, meaning they can enter a company from the seed stage (with an investment of just $200K – sometimes as low as even $50K) all the way to late stage depending on the geography in which they are investing. Canaan leads every transaction it gets involved in and its partners are on the boards of almost all companies they invest in.
Over the years, Brent has made some very successful investments for Canaan and has delivered excellent returns to investors. As an acknowledgment of his track record, he was named to the Forbes Midas List, a roster that ranks the best dealmakers in technology and life sciences. For instance, Elevation Pharmaceuticals, which he invested less than 3 years back was acquired by Sonovion and is expected to give 8X multiple at exit. Another company, Durata Therapeutics, went public a couple of months ago. Yet another investment DexCom returned 5X capital and currently enjoys a market cap of $1B. Peninsula Pharmaceuticals, a company he invested in was acquired by J&J. Cerexa, a company developing antibiotics was purchased for $500M + $100M earn-out by Forest Laboratories. Calixa, another antibiotic company he invested in was purchased by Cubist.
He is typically on the board of 8-9 companies at any time. With this level of activity, I couldn’t help but wonder how he achieves work-life balance. Brent simply says, “Where there is a will, there is a way!” When he is not focused on investments, Brent tries to maximize his time with family and can often be seen at baseball games with his four children during weekends. He is very involved in Church-related activities. A voracious reader who tries to keep up with the latest developments in the world of business, Brent is also involved in activities of the Kauffman Foundation – he regularly reviews applications and screens candidates who apply for the Kauffman Fellowship. He is a regular at Tuck-related events talking to current and prospective students and is a sought-after speaker on all things healthcare and biotech.
I asked him what advice he would like to give prospective Tuckies as well as current students about venture capital. He responded thus: “I’m a firm believer in the idea that the harder you work, the luckier you get. Figure out what you want to do, develop an investment thesis for yourself, and go after it with all your energy. You have a big responsibility as a venture capitalist. Respect the entrepreneur and always give feedback to her/him whether or not you invest in the company.”
As a parting remark, he added: “When you’re investing, don’t get too caught up in too many complexities. Keep things simple. My rule of thumb for investing is if I can’t explain what a business is doing to my mom, I probably don’t have the ability to pursue that business any longer for a potential investment.”
Given that I’m involved in the VC/PE sector in the emerging markets, I need all the advice I can get. It's not a surprise, therefore, that I’m always looking forward to Brent’s next trip to Mumbai – and soon enough – so I have the opportunity to catch up with him once again!