Funding America’s Next Generation of Healthcare Leaders
With healthcare reform and technology innovation forces reshaping the healthcare industry, there is opportunity abound, and organizations with the right leaders have everything to gain from an infusion of capital and the counsel of experienced board members.
While working for Highland Capital Partners, Bijan Salehizadeh discovered a passion for helping founders of healthcare companies who are ready to transition to the next phase of growth. Inspired by his mentors Bob Higgins and Paul Maeder, who had founded that firm in 1988, he pursued this passion and raised a fund for NaviMed Capital, a Washington, DC-based private investment firm focused exclusively on helping companies scale in the new era of healthcare.
“Having gone through that founding journey, I can truly say that I can now relate to business owners and founders in a way that I never did before working at a larger firm,” said Bijan.
Experience in a large firm, as well as founding a one-office, focused healthcare fund made him expert at identifying leadership teams that will succeed in the competitive healthcare space. “I often like to say that I am in the “people business.” By that, I mean that our firm does not invest in a company unless we have deep conviction about the senior leadership team.” said Bijan.
In Becoming CEO, Bijan discusses his most important lesson learned while starting NaviMed Capital, why people are the most important criteria in an investment, and the key to successful hiring in the healthcare space.
Slone Partners: Do you have a particular approach when vetting a new leader for what NaviMed Capital would call “the new era of healthcare?”
Dr. Salehizadeh: When people ask me how I make investment decisions, I often like to say that I am in the “people business.” By that, I mean that our firm does not invest in a company unless we have deep conviction about the senior leadership team. There are lots of great businesses that we won’t invest in because we just don’t have the right mix of leadership.
Great leaders are hard to find – and matching a great leader with the right stage of company that plays to the strengths of that leader is absolutely critical. I look for experienced leaders with high integrity, EQ, and self-awareness and strong, confident communications skills. I’m looking for people who are just as good delivering bad news to their employees, customers, and shareholders as they are in delivering good news. Finding the right mix of these traits in a single person is difficult. To do this, we spend countless hours as an investment team getting to know the leaders we back to run our companies, and we often rely on trusted advisors and search professionals to help us enrich the odds of finding that right person.
Slone Partners: Do you source leadership from outside the healthcare industry? If so, where and why?
Dr. Salehizadeh: Our bias at NaviMed is that as much as healthcare needs new ways of thinking and can benefit from outside business models and perspectives, we don’t want to back leadership teams who are entering healthcare for the first time. There’s a whole range of reasons for this but fundamentally, most buyers of healthcare products, whether life sciences companies, physicians, insurance companies or hospitals are at their core conservative buyers resistant to business model change. There are many reasons why healthcare is “different” than other sectors, which I summarize as “lives are at stake” so buyers tend to move more slowly, bounded by often complex regulations.
In that context, I have found it extremely rare that entrepreneurs who grew up outside of the healthcare system can on their own adapt to the reality of developing and commercializing products in healthcare. In Silicon Valley, it’s been quite popular over the past five years for VCs and entrepreneurs from outside of healthcare to want to “disrupt” healthcare. And while I wish those companies and investors well since the system does need to be changed, all too often, I see teams that are naïve to healthcare and life sciences stub their toes badly on critical regulatory and commercial paths that are sacrosanct to experienced healthcare leaders but seem new and “unnecessary” to outsiders.
With that said, I do think, however, that it’s absolutely critical to have diversity of thought on management teams. So while, I may not want to back a CEO and entire team who are new to healthcare on their own, I may back that person or team in combination with a COO or CFO who has deep and relevant healthcare sector experience.
Slone Partners: What inspired you to make the leap from Highland Capital Partners to founding NaviMed Capital?
Dr. Salehizadeh: I entered the investment business in 2003 at Highland Capital Partners while I was getting an MBA. I joined Highland to work with two amazing mentors, Bob Higgins and Paul Maeder, who had founded that firm in 1988 and had grown Highland to be a highly respected firm working in several industries including tech and healthcare investing.
After 8 tremendous years at Highland, three things were obvious to me: 1) investment decisions work best around a single small table with a small number of decision makers – and not spread across multiple offices or done by video conference; 2) healthcare and tech investing are just completely different in almost every aspect – timelines, experience level of leadership that investors want to back, and of course the core language; 3) as much as I liked early stage investing, the companies that brought me the most personal satisfaction were those that were already commercially executing and not those where I would be up at night sweating the outcome of a binary clinical trial.
So I was itching to do myself what Bob and Paul had done when they started Highland in the 1980s. Namely, I wanted to start my own firm and have it be focused on healthcare. So with two fantastic investors and friends who were running the healthcare growth capital practice at The Carlyle Group, we set out to raise a focused healthcare fund – where every investment professional would be deep in healthcare, where we would commit to staying a one office firm, and where we would only invest in mature, profitable healthcare companies.
Slone Partners: What important lesson(s) did you learn when starting NaviMed Capital?
Dr. Salehizadeh: One key lesson: Entrepreneurship is much harder than it looks from the outside! NaviMed was itself a startup while we raised our initial fund. And with that came each of the founders rolling up our sleeves and doing every aspect of what it takes to create a new business: Setting up the phone system, running the payroll, stocking the kitchen – whatever it took to be able to get the firm off the ground. And as we hired our own team of investment and support professionals, we took to heart many of the lessons we had learned in hiring executives for our portfolio companies over the years – looking for passionate and experienced people ready to go on that journey with us.
Having gone through that founding journey, I can truly say that I can now relate to business owners and founders in a way that I never did before working at a larger firm.
Slone Partners: What is your view on data sharing in the health care industry?
Dr. Salehizadeh: Data sharing is the future of healthcare. There are so many locked or proprietary non-searchable data silos in today’s healthcare world – from clinical trials data, to published peer-reviewed research, to data within EMRs and insurance claims systems. I think there are great strides being made by government and start-ups to unlock these data assets and make them more shareable with the right sorts of privacy and sharing protections and with patients at the core.
However, make no mistake, we are in the first inning of a long ballgame with respect to data sharing in healthcare. Despite well intentioned lip-service to opening data access, the entrenched forces of large provider, big pharma, publisher, and mega-insurer oligopolies will fight data sharing in subtle and insidious ways for many years to come. It’s not in the interest of their business models today to have what they view as “their data” being shared with what they view as “their competitors.”
So to me, this is the beginning of a 50-year trajectory that will take modified regulations, court cases, and some pioneers who take arrows in their backs to get to this holy grail.
Slone Partners: I hear that you work from a “walking” desk, do you walk and work every day? Does this improve your workday?
Dr. Salehizadeh: Yes! I’m in the healthcare business after all. About five years ago, I had enough of feeling chained to my desk or conference room chair and felt it was making me unhealthy and dulling my mental acuity to be so sedentary at home. In today’s world of unrelenting emails and phone notifications, standing up and walking while I work is really important to keeping my sanity in the office.
I’m a tinkerer at heart and so I’m always trying new productivity and wellness techniques whether they are related to how I work or how I eat. Things I’m trying these days in addition to standing while I work are the Pomodoro Technique (a way to work in short 25 minute focused bursts on a single task with no distractions including no email) and intermittent fasting (I try to fast – i.e., 500 cals per day – 2 days per week).
About Bijan Salehizadeh
Dr. Salehizadeh has over 15 years of healthcare operating and investment experience. Prior to co-founding NaviMed Capital, he was a General Partner at Highland Capital Partners, where he focused on growth stage healthcare investments.
Prior to joining Highland Capital Partners in 2003, Dr. Salehizadeh spent several years in a variety of operational roles at Medtronic. Before Medtronic, Dr. Salehizadeh held a variety of senior management roles with HealthCentral, a private equity-backed digital health company that went public in 1999.
Dr. Salehizadeh is currently on the Board of Directors of CenterPointe Behavioral Health System. He also serves as a member of the Board of Directors of Auris Surgical and Procured Health. Dr. Salehizadeh previously served on the Board of Directors of several companies including BÄRRX (sold to Covidien), Hyperion Therapeutics (IPO; sold to Horizon plc for $1.1 billion), and Opgen (IPO). In addition, he has sourced or been actively involved in Highland Capital Partners’ investments in AVEO (IPO), Baronova, Conor Medsystems (IPO; sold to Johnson & Johnson for $1.4 billion), Entourage Medical, kyruus, and Pharmaca Integrative Pharmacy.
Dr. Salehizadeh holds an AB in Molecular Biology from Princeton University, an MD and Master’s in Science in Health Policy from Columbia University, and an MBA from Harvard Business School. He is also a graduate of the Kauffman Fellows Program.
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