At 27, Lisa Skeete Tatum was at a crossroads. After four years with Proctor & Gamble and three years with a startup, she was working 13 hours a day, sometimes more. She didn’t mind the pace or the pressure – she loved the exhilaration of developing and introducing new products – but found the day to day maintenance of a business much too mundane. It didn’t require verve.
She sought out a former colleague, now a venture capitalist in San Francisco. Perhaps she should become a consultant, she thought, which would keep exposing her to a variety of new assignments and retain the fun of working with different people. Then again, she had an operations background and liked to see things through to completion. Consulting wouldn’t afford that luxury.
As her colleague described what he did, it struck a chord. Venture capital investment began in the United States and has been credited with fueling American innovation. Assembling partners, VCs start funds that typically last for 10 years; they make investments for the first five or six years and cash out on their investments for the remaining time. Meanwhile they help the entrepreneurs manage a company’s growth and make strategic partnerships.
You never know what will be on your desk the next morning, the VC told her. You will constantly see a variety of new ideas and meet bright, intriguing people. When you invest in young companies, you will have a discernible impact. You will get involved in a wide array of business challenges over time. Even the dynamics of working inside a venture capital partnership are appealing, he said, because partners have diverse backgrounds and enjoy spirited debate.
It was at this moment that Skeete Tatum realized that venture capital offered all the elements she wanted in a career. Ten years later, Skeete Tatum is a general partner at Cardinal Partners, a Nassau Street venture capital firm specializing in the life sciences. She loves the fact that she can make a difference in the world by investing in life sciences and life sciences-related companies, which help peoples’ lives.
"I meet great people and see new ideas all the time," she says. "When you are working with start-ups, you have an opportunity to make a tremendous impact in building those companies."
Skeete Tatum and her husband, Mark, another Harvard Business School graduate and a vice president at the National Basketball Association, enjoy the trappings of success. They have a beautiful colonial home in Central New Jersey and a second residence near San Diego. Travel is also a leisure-time priority. The couple drives a sports car, as well as an SUV, mostly to cart their two toddlers around.
It is her family that is most important in her life, Skeete Tatum says, and her life isn’t all about glamour. She works long days and travels frequently, occasionally bringing along her preschool sons. Skeete Tatum’s sister, a college student, lives with them to help care for the children, and they have another nanny as well. But when it comes time for someone to serve at the co-op preschool, mom is the one who volunteers. In fact, Skeete Tatum had to relinquish an opportunity to be a panelist at a recent venture fair because she was scheduled to teach the nursery school class.
She readily admits that juggling a high-level job with motherhood can be grueling. She typically gets only three or four hours of sleep a night. "I work a full day at work and then come home and face another full day," Skeete Tatum says. "I didn’t realize how challenging it would be."
Born in Newark, Skeete Tatum moved at the age of five with her mother, a registered nurse, and her stepfather, a U.S. Army officer, to an army base near Frankfurt, Germany. Tatum’s mother was adamant that her daughter would make the most of new experiences. So during their three-year stay overseas there were side trips to Spain, Paris, and Morocco, palate experiences ranging from baked Alaska to spaetzle to lebkuchen cookies, and even awkward rides on camels. "My mother always insisted that I make new friends, visit new places, and sample new restaurants and foods," Skeete Tatum recalls. "We were on an adventure
together to explore the world."
After his tour in Germany, Skeete Tatum’s stepfather was stationed in Colorado, and then the family – she has a younger brother and sister – lived in Guam as well as in several cities along the East Coast. Skeete Tatum enrolled at Cornell, Class of 1989. During a semester in her junior year, and again during the summer between her junior and senior years, she worked in Procter & Gamble’s research laboratory and in its manufacturing engineering development department. After graduating Skeete Tatum worked in P&G’s product supply group and beauty care divisions, specializing in package development and purchasing. She already knew that she did not want to be involved in research. "When you are in research, your milestones can take several years, as opposed to business, where the milestones are more immediate," she says.
Two years later P&G acquired Cover Girl, based in Hunt Valley, Maryland, and P&G sent her there to merge Cover Girl’s supply system into P&G’s network and then join a team to launch new products and promotions. Thereafter, P&G acquired Eurocos, a prestige fragrance and cosmetics company based outside of Frankfurt, and Skeete Tatum became the product supply manager for the unit, splitting her time between Hunt Valley and Frankfurt.
She moved closer toward her venture capital career in her next job at start-up Circle of Beauty in 1994. She was a managing associate in charge of packaging development, and spent a frenetic 14 months helping to launch 630 products, before deciding to go the venture capital route.
Almost all new VCs have MBAs, and research showed that, at that time, a disproportionately large number of VCs went to Harvard Business School. So she applied and got accepted, as did her husband, who had also gone to Cornell. (They didn’t meet until after graduation, when they went back to their alma mater to recruit for their respective companies, and they shared a recruiting table).
With her career goal clear, she did everything that might be expected of an up-and-coming venture capitalist. She became president of Harvard’s Venture Club and chairperson of Harvard’s annual international VC conference, improving her venture capital network. She also started a consulting business, focused primarily in pharmaceuticals and cosmetics, and her largest client was based
In her second year, she applied to the Kauffman Fellows Program, a post-graduate educational program that matches novice VCs with experienced ones. This program was originally run by the foundation set up by Ewing Marion Kauffman, founder of Marion Laboratories (now Hoechst Marion Roussel). With current assets of $1.8 billion, the program is now run by the Center for Education Foundation in Shawnee Mission, Kansas (www.kauffmanfellows.org). Over 10 years, there have been 91 Kauffman Fellows who have invested in 417 companies that have created more than 42,700 jobs; they have helped consummate 84 mergers and acquisitions and 28 initial public offerings. Seven alumni have
created their own venture capital firms, and six are CEOs of VC-backed start-ups (www.kauffmanfellows.org).
Kauffman Fellows must have a graduate degree, at least five years of industry operating experience, and expertise in a field in which venture capitalists invest. On average, one in 25 applicants is selected. The curriculum, delivered in quarterly four-day modules and a summer session, exposes the novice VCs to top-tier venture capitalists.
But what attracted Skeete Tatum was the program’s two-year mentorship at a sponsoring venture capital firm. "I knew I would learn an enormous amount about the venture capital process in an accelerated time frame," she says. The sponsoring firm pays $50,000 tuition for the two-year program, plus a minimum salary of $80,000 a year.
Kauffman Fellowship in hand, Skeete Tatum met John Clarke at Kauffman’s "matching event," the time when the venture capital firms meet the prospects. Clarke, a general partner with Mort Collins at DSV Ventures, had co-founded Princeton-based Cardinal Partners and was a former board member of the National Venture Capital Association. "Once you get to the matching event," says Skeete Tatum, "it’s all about fit, matching skills and personalities. I knew I wanted to be on the east coast, and because I wasn’t fresh out of school without any
experience, I was specifically looking for an environment where they wanted me to be a contributor sooner rather than later."
But the wisdom of the match wasn’t immediately obvious. When the two initially met over lunch, Skeete Tatum told Clarke that she wasn’t particularly interested in health care and he told her that her consumer products background didn’t particularly appeal to him. By the end of that lunch, however, a strategic partnership had been formed. Clarke realized that she might be an important asset to the firm precisely because she was an expert in consumer marketing. Health care companies were finally starting to become consumer-driven to enhance their odds of success.
Skeete Tatum’s two-year fellowship at Cardinal began in 1998 and included quarterly education modules covering such topics as the tools of venture capital, structuring a deal, and being a good board member. "Certainly that can be learned over time," she says, "but the advantage of Kauffman is accelerated learning. And you have a built in network. You can call people who are in the same business you are in when you don’t know what’s going on."
In 2000 Skeete Tatum joined Cardinal, which was founded in 1997 as a spinout of an earlier firm, DSV Ventures; it has $180 million under management and is invests in early-stage life sciences and life sciences-oriented start-ups. Also in 2000 the firm started its second fund, Cardinal II, with $120 million, and next year it will start its third fund, with $175 million. Between the two funds Cardinal has 16 portfolio companies, including five biotechnology firms, seven health care information technology firms, two medical device companies and two health care services firms. Along with Clarke, Brandon Hull and John Park, Skeete Tatum is a general partner, and the firm will soon add a fifth partner.
Skeete Tatum spends her days working with portfolio companies, doing due diligence on new deals, or interacting with her partners and networking with people in the industry. One of the more satisfying aspects of Skeete Tatum’s job is working directly with her portfolio companies, recruiting top talent and developing strategies to help them build rapidly growing enterprises. "Because I work at an early-stage investment firm, I get very involved in helping build the start-up," Skeete Tatum says. "The work is very diversified and intellectual, and I really enjoy it."
One of her portfolio companies is Seattle-based Nexcura, which offers online treatment option tools for decision support to several hundred thousand patients and caregivers per year. E-care tools for chronic disease management for more than 30 conditions, including various types of cancer as well as cardiovascular and pulmonary conditions, are available free through the websites of national advocacy groups, healthcare organizations, and healthcare portals.
NexCura makes its money by charging pharmaceutical and medical device companies to supplement the information in the treatment option tools with timely, relevant news on their behalf. Companies may want to spread the news about new therapies, updated research, and leading-edge clinical trials. This additional information is sent only to those who give their consent – and for whom the information is clinically appropriate. "Thousands and thousands of people have talked about how it changed their lives, and it even made them aware of
treatments that their doctor didn’t share with them," says Skeete Tatum.
Her other portfolio companies are Mobile Medical Industries, based in Boynton Beach, Florida, with home healthcare services; Athenahealth, in Waltham, Massachusetts, outsourcing for billing, collection, and practice management systems for doctors’ offices. Her fourth company has been sold; TechRx, based in Coraopolis near Pittsburgh, has software for prescription fulfillment.
Ultimately, as a venture investor, Skeete Tatum is held accountable for producing returns to the other investors in the fund, and she realizes that people are an important ingredient to that success. "You can do good business and still treat people right," Skeete Tatum says. "You can simultaneously make money and value and respect people, and make them feel good about themselves. That is very important to me."
As a female venture capitalist, Skeete Tatum is a relative rarity in the venture capital world, although not by the standards of Kauffman Fellows graduates. A quarter of the program’s graduates and current class of fellows are women, roughly five times the ratio at all U.S. venture capital companies, says Trish Costello, CEO of the Center for Venture Education, new home of the Kauffman Fellow program, based in Shawnee Mission, Kansas.
Over time, Costello says, female venture capitalists strengthen a firm by broadening its perspective and enhancing its business networks, eventually increasing the number of promising investment opportunities. Very few start-ups with women CEOs have attracted venture capital, but a surprisingly large number of them nonetheless have managed to go public at a hefty premium. "If you want to understand a particular area of the market, you need people who operate in that market, and there are some markets in which the number of women at the top rival the number of men at the top," Costello says. "Some very successful venture firms come to me specifically looking for the brightest women leaders to take important roles in their firms. If they are not aware of the emerging entrepreneurship demographics, they will eventually miss out financially."
Nonetheless, the number of women partners at VC firms has grown slowly and Skeete Tatum, typically, is the only female partner at her firm. Ultimately, the venture community will encompass more women, a byproduct of macro trends and the Kauffman Fellows program, but change will continue to come slowly. "Venture capital firms have a specific profile of the people they are looking for, and they are usually introduced through referral," says Skeete Tatum, who is a founding board member of the Center for Venture Education. "Venture capital is an exclusive club and VCs tend to work with, and attract, people like themselves. One can lose sight of the expanding opportunities outside our networks. If we are going to continue to invest in the world, venture firms need to be reflective of the companies we are building."
In any case, Skeete Tatum believes that her position provides her a good balance between work and home life.
She can accommodate her children at her office and has the flexibility to visit her sons at pre-school activities. "The fundamental reason I love venture capital is because I get to work in an intellectually stimulating environment," says Skeete Tatum, "and I invest in companies that change the way people live their lives." "I am so comfortable in pretty much any environment," she says. "You just come in, you unpack, and you just get on with it and you make the most of whatever it is. I think that because I was exposed so early to so much, I know there is more out there. Maybe that is why I like venture capital – because it is about discovering the next thing, the next new thing."
Cardinal Partners, 221 Nassau Street, Princeton 08542.
John K. Clarke, managing general partner. 609-924-6452; fax,
More Women in VC
Nicole Vitullo is one of eight venture capitalists who are general partners at Domain Associates on Palmer Square and the only woman. Of 18 venture capital firms in Princeton, only three can name a woman as a general partner. But Vitullo does not believe being a VC is more difficult for women.
Domain Partners has 18 people in Princeton and another office in California, and it manages $1.4 billion in the areas of life sciences and healthcare. Founded in 1985, it is working on investments for its sixth fund, which amounts to $500 million and closed last year. Venture funds generally take 10 years to play out, and Domain is still managing investments in its third, fourth, and fifth funds. It expects to round up capital for its seventh fund in 2007.
Among its Princeton area investments have been DNX, now part of MDS Pharma; Small Molecule Therapeutics, now part of Morphochem; and Oncotherapeutics, now part of Biomira. Vitullo joined the firm in 1999 after helping to establish a venture capital division at Eastman Kodak, working in investor relations at Cephalon, and doing biotechnology investing at London-based Rothschild Asset Management. For Rothschild, she worked out of Domain’s office on Palmer Square for seven years. When she left Rothschild and joined Domain in 1999, she did not have to move her desk.
The daughter of a history professor and a dental hygienist in Niagara Falls, New York, Vitullo is the second of four children. She graduated from the University of Rochester in 1979 with a math major, and she has her MBA from there as well. She and her husband, whom she met in college, live in Newtown Square, west of Philadelphia; they do not have children. He works at Elan Pharmaceuticals in King of Prussia and she commutes to Princeton. "I like my job and I like the people I work with, so I do the commute, just over an hour," she says.
Her path to venture capital was unplanned – serendipitous. "I happened to be on the corporate staff at Eastman Kodak, and they were looking to see if they could leverage their chemical technology by partnering with smaller companies, and they created a two-person department." Self taught, she found it a "great experience." "We had a relationship with a number of venture funds, and we used the funds as a window into small companies with technology."
Her colleague, Bob More (who happens to have a mother who is a prominent venture capitalist for Oak Investment Partners in Connecticut), came to Domain through the Kauffman Fellow program. Vitullo didn’t know about the Kauffman program when she came to work in Princeton. "We have had a lot of very good people come through the program, but I am very happy with the way I did it. There is no one right path. And being a VC is not more difficult for women. I have never found in my career any difficulties that can be attributed to women. I was given a job to do and was going to do it as well as I could."
Vitullo has full management responsibility for Domain Public Equity Partners, a fund for small cap public healthcare companies. Her portfolio companies, those for whom she serves on the board, include Onyx Pharmaceuticals, Ruxton Pharmaceuticals, and Eunoe Inc. Based in California, Eunoe is the only company working on Alzheimer’s therapeutics that manages cerebrospinal fluid; it has a flow-regulated shunt. Ruxton Pharmaceuticals is based on the work of Johns Hopkins researcher Jeffrey Rothstein, who seeks to treat ALS, known as Lou Gehrig’s disease. Onyx Pharmaceuticals, also in California, has a lead product candidate that inhibits cancer cell growth and is in Phase III clinical trials. More, the former Kauffman Fellow, agrees that venture capital is a "terrific business for women" but thinks more diversity is needed. "I personally interact with quite a few women VCs, says More. "I would like to see an integrated industry, in all respects because entrepreneurs come in all varieties, and it could only be good for the industry."
Domain Associates LLC, 1 Palmer Square East, Suite 515,
Princeton 08542. James C. Blair, general partner. 609-683-5656; fax,
609-683-9789. Home page: www.domainvc.com
Other Women VCs
As CEO of New Jersey Technology Council, Maxine Ballen launched the NJTC Venture Fund and hired three general partners (who happen to be men) to manage the fund; the council is also a general partner. "I saw a crying need for more early stage capital in this state. Thank goodness I went to my board in December, 1999," says Ballen, referring to the burst bubble of the following spring. "If we had waited three months, there would not be a venture." This $80 million early stage venture capital fund invests from $500,000 to $4 million in early stage companies in New Jersey.
Brenda Gavin, a partner at Quaker BioVenture, works out of Philadelphia but has obtained $10 million from the New Jersey Economic Development Authority to put toward investment in New Jersey companies. Her firm has $280 million under management and has picked 8 of 20 potential investments. In the next few weeks she expects to close on a Princeton-based company that has just entered clinical trials.
A 1970 graduate of Baylor University, Gavin has her doctor’s degree inveterinary medicine from the University of MIssouri and her MBA from the University of Texas at San Antonio. She has been investing in life sciences since 1981. After working in corporate venture capital for Smith Kline Beecham, she was a general partner in another firm. Four years ago she and two male partners co-founded Quaker BioVenture to invest in life sciences in the Mid Atlantic states. "Venture capital is a hard field to break into, but it is not harder for women than for anyone else," says Gavin.Jan Rock founded Florham Park-based MedCapital LLC in 1998 to invest in early-stage health and life sciences companies. A 1977 graduate of Cornell with a Harvard MBA, she had been a vice president at Johnson & Johnson, responsible for expanding J&J’s $2 billion franchise in women’s health.
Virginia Breen is the co-founder of Blue Rock Capital and a partner in Sienna Ventures (co-founded by Harvard and Princeton alumni who compromised on sienna as the appropriate combination of crimson and orange). Breen majored in computer science and electrical engineering at Harvard, Class of 1986, and has her MBA from Columbia. She was an investment banker at DLJ when she was invited to join a VC fund. "My entire family is entrepreneurs, so it was a wonderful match," she says. "My parents had 11 different businesses, everything from pet stores to mail order. You name it, they did it." Breen and her husband – who stays home with their three school-aged children – live in Sussex County in North Jersey, where she has a home office.
"If you have a fabulous entrepreneur who can make money for investors you want to pair up with that entrepreneur. And savvy entrepreneurs understand that writing a check is only a part of it," she says. Each entrepreneur will need to tap different connections that the VC can provide. "Whatever works for them. It is not a cookie-cutter relationship."
Says Breen: "People in the venture business are focused on building businesses and making money for their investors, and doing that is gender neutral."