Is venture philanthropy the new venture capital? The FasterCures-organized session at BIO focused on this question and highlighted the similarities and differences in the two. The panel featured a terrific lineup of:
- Robert Beall, Cystic Fibrosis Foundation
- Katie Hood, Michael J. Fox Foundation for Parkinson’s Disease
- Eric Olson, Vertex Pharmaceuticals
- Mark Simon, Williver Group
As for how the venture philanthropy groups view their mission, it turns out failure is an option. “There will be failures, this funding from organizations like ours is not a panacea,” said Bob Beall of the CF Foundation. Eric Olson of Vertex spoke of the pass-off from CFF where they take the funding baton after CFF funds discovery. The synergy with Vertex and the other companies CFF partners with wasn’t always so easily found. Turns out Bob had to pass through the phase where there were a lot of calls unanswered from biotech in his early days at CFF. Expectations must be realistic on both sides for these relationships to work, reflected Beall.
Katie Hood of the Fox Foundation talked about how one size doesn’t fit all. They are driven by different imperatives in terms of their disease state as well as their pipeline , which has resulted in different types of relationships with companies; what they have in common with foundations like CFF is that they are trying to remove risk for companies potentially interested in investing in their disease. Katie also discussed PD Online, which they are launching to provide a collaborative space for discussion and problem-solving in PD research.
Even though philanthropic research funding accounts for only two percent of total health research funding, it's a small but substantial source for novel, high-risk research that might not be able to compete successfully for public funds. It fills gaps in funding research that is high risk but also with potential of high return.
So, is venture philanthropy the new venture capital? Not exactly, but it is an exciting new kind of collaboration that can bring benefits -- funding, but also intelligence, relationships, and access to patients -- to companies and to foundations.
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