Laissez-Faire Founders Fund Sets Sights On Health Care

Article preview from Start-Up - February, 2012

Armed with an investment manifesto and aiming to place big bets on high-risk, high-reward start-ups led by extraordinary minds, San Francisco-based Founders Fund has recently closed a $625 million fund and is now testing its thesis on life sciences and health care information technology start-ups.

 

 Laissez-Faire Founders Fund Sets Sights On Health Care

Article preview from Start-Up - February, 2012

It’s a popular notion that the life-science venture capital model is broken, but Founders Fund is one of the few firms that believe high-risk investing is the fix. Best known for its vocally libertarian partner Peter Thiel, its frontier bets on robotics, space exploration and artificial intelligence, and its impending windfall from an early stake in Facebook, the firm has an audacious belief that every one of its investments can change the world – and its partners are happy to say so.

The firm's early track record in the digital, high-tech world shows the belief might have some merit. But Founders Fund is turning its gaze toward life sciences and health care, areas with bedeviling development timelines, complex regulations, and hugely entrenched status-quo interests. Its first dozen or so investments  will be a fascinating test of the firm’s thesis that the best companies with the deepest societal effects will arise from independent thinking geared toward long-term growth. Anything less, the partners say, may make incremental improvements, but will do more to reinforce the status quo than to upset it, and that just won't do.

“We’re looking for cures,” says partner Brian Singerman, one of five partners at the firm. “I want to be remembered as the guy who helped find a cure for cancer.”

Founders Fund won’t invest in re-formulations of existing drugs, therapies that improve end-of-life conditions for terminal patients, or drugmakers seeking to design better compounds for well-studied targets. Beyond biopharmaceuticals, the ambition remains the same: build disruptive companies that have major impacts on the world, says Singerman. Like his colleague Thiel, Singerman identifies himself as a “hardcore libertarian” and is inclined to identify market-based solutions to society’s ills. Most of the firm's investments, he says, “will have political implications” among their disruptive effects. He stresses that he never loses sight of a stated goal of “innovation through capitalism."

 

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