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Earlier this week, Forbes published its annual Midas List<\/a>, which\u00a0showcases who the outlet believes to be the top investors in the world. Stuart Peterson of Artis Ventures<\/a> was on the list \u2014 very far\u00a0down, behind the many VCs whose names are instantly recognizable to founders, like Chris Sacca and Peter Fenton and Mary Meeker.<\/p>\n The way Peterson tells it, that\u2019s the way he likes it. There\u2019s a reason he didn\u2019t put his name on the door 17 years ago when he left the hedge fund Cypress Funds in L.A. to open his own investment firm in Silicon Valley. \u201cI\u2019m not crazy about being the center of attention. I never wanted to do this by myself. I think you can be successful if you\u2019re part of a successful team.\u201d<\/p>\n Certainly, Artis has seen its share of success. In one of its most notable deals, it invested in\u00a0YouTube before the company sold<\/a> to Google in 2006. A family connection seemingly helped. At the time, Artis\u00a0employed David Lamond, son of renowned VC Pierre Lamond, who spent 30 years with Sequoia Capital, another early YouTube investor.<\/p>\n Artis also invested alongside Sequoia in a number of other deals, including Aruba Networks,\u00a0which\u00a0went public<\/a> in 2007 and was acquired<\/a> by Hewlett Packard Enterprise in 2015. Lamond left Artis in 2012 to form his own firm<\/a>.<\/p>\n More recently, the\u00a0firm\u00a0\u2014 whose newer bets include troubled<\/a> Juicero and\u00a0Zenrez<\/a>, a company that sells pricing technology and tools to fitness studios\u00a0\u2014 made a killing off the sale of cancer drug developer Stemcentrix to AbbVie last year for $10.2 billion.<\/a><\/p>\n Artis led Stemcentrix\u2019s Series A round and Peterson sat on the company\u2019s board. In fact, though\u00a0Founders Fund has received much attention\u00a0for leading the company\u2019s Series B round (it reportedly returned $1.4 billion<\/a> off a $300 million investment in the company), Peterson\u00a0says Artis made \u201cjust less than $1 billion\u201d from its $35 million\u00a0investment in the company.<\/p>\n Asked how he landed the deal, Peterson points to a\u00a02010 event to\u00a0unveil a social apps fund<\/a> created by Kleiner Perkins. At the time, famed VC John Doerr was hosting a panel that included Facebook CEO Mark Zuckerberg and Amazon CEO Jeff Bezos, and Doerr asked Bezos what advice he had for investors and founders.<\/p>\n \u201cMy advice for entrepreneurs just getting started is to pick an area you\u2019re passionate about,\u201d Bezos said. \u201cIf I were coming out of school today, I think I would be very passionate about genetic engineering, synthetic life, I think these are incredible areas . . .\u201d<\/p>\n Doerr, confused by the change of subject, interrupted, \u201cOn social networks?\u201d<\/p>\n \u201cNo,\u201d Bezos continued, \u201cI\u2019m talking about test tubes and engineering real biological organisms to solve clean energy and a whole bunch of interest issues.\u201d<\/p>\n \u201cI was blown away by that,\u201d says Peterson, whose firm has invested roughly a billion dollars since its inception, much of it via special purpose vehicles whose funding has come from CEOs, CFOs, actors, and sports stars. Says Peterson, \u201cThey love the idea of access, and they\u2019ve added a tremendous amount of value to companies that we\u2019ve funded.\u201d<\/p>\n So where is\u00a0Peterson \u2014 who plans\u00a0to raise a fund for Artis next year \u2014 getting his leads today? We asked him that and much more in a wide-ranging conversation yesterday. Here\u2019s an outtake:<\/p>\n TC: You got behind Stemcentrix at a time when not many in Silicon Valley were focusing on novel biotech cancer drugs.<\/strong><\/p>\n SP: You had Zynga and Groupon and Twitter and all these seemingly overnight successes that had raised very little capital and were producing great returns. We felt like maybe there\u2019s just one YouTube and now it\u2019s time to move on.<\/p>\n TC: VCs certainly would agree with you at this point. I don\u2019t think a week passes without\u00a0another firm jumping into biotech investing<\/a>.<\/strong><\/p>\n SP: Because a lot of benefits accruing to the tech landscape are now accruing to the life science space. Ten years ago, it cost a few million dollars out map out the human genome; now it\u2019s a few hundred dollars and before you know it, it\u2019ll be $30. It\u2019s collapsing faster than Moore\u2019s Law.<\/p>\n But it\u2019s not just about mapping our your genetic instruction set; there\u2019s opportunity in everything that lives on and inside of you. It\u2019s funny, we don\u2019t even understand yet what\u2019s going on in our microbiome, yet we want to travel to Mars. I love the enthusiasm, but our bodies are their own solar system. We need to get to a point where instead of having a doctor test you for 20 or so pathogens to figure out what\u2019s wrong, the doctor says, \u201cWe\u2019re going to sequence your bacteria, fungi and viruses, and I\u2019m going to tell you exactly what you have in an hour.\u201d<\/p>\n It\u2019s like this\u00a0Netscape browser moment. You knew it was powerful, but you didn\u2019t know where it was going to take us. Now we know that mapping out your own instruction set is powerful, but where will it take us? I think we\u2019ll find out shortly, and that it\u2019s going to release a tremendous amount of value.<\/p>\n TC: What are some of your more recent life sciences bets?\u00a0<\/strong><\/p>\n SP: We did the Series A of a company called IDbyDNA<\/a> [which aims to be able to identify any pathogen] a year ago. We funded Fabric Genomics<\/a> [whose software aggregates insights about cancer and pediatric genomics from around the world, then spits out an actionable report for lab technicians to send off to clinicians].<\/p>\n We\u2019re going full circle [in our newfound ability to more easily find co-investors]. When we looked at Stemcentrix and needed to find another investor, it was really hard.\u00a0We all looked around the table, and we said, \u201cWe better call Peter Thiel.\u201d I didn\u2019t have a number two.<\/p>\n [Editor\u2019s note: Asked for comment, a spokesperson for investor Brian Singerman, who is credited<\/a> with betting on Stemcentrix on behalf of Thiel\u2019s Founders Fund, says Singerman\u00a0was introduced to Stemcentrix via the debt firm WTI<\/a>.]<\/p>\n TC: You made it on Forbes\u2019s Midas List this week. How are you feeling about it?<\/strong><\/p>\n SP: I see 12 people who funded Twitter. If I was given a choice between funding a targeted therapeutic to cure cancer or Twitter, I\u2019d take the therapeutic. I look at the garbage that\u2019s funded every day, and even if it\u2019s hugely successful, who cares? Will it change my life?<\/p>\n TC: A\u00a0lot of investors do seem to be experiencing a similar shift in thinking.<\/strong><\/p>\n SP: I think we\u2019re seeing it. Y Combinator is trying to wrap its arms around the life sciences opportunity. Yesterday we put a term sheet out to a life sciences company, and guess who was there with a term sheet? Andreessen Horowitz.<\/p>\n What\u2019s interesting to watch is how people pivot but try to keep their story intact. The venture firm Data Collective<\/a> wanted to do everything in big data, but then they began to see the opportunity in life sciences. So what do you tell investors? That genomics is the biggest data opportunity we\u2019ve ever seen. Andreessen is the same. It was never going to invest in healthcare, then it had to pivot into life sciences without looking crazy.<\/p>\n I think it\u2019s great, by the way. If you\u2019re investing in [the video platform] Vessel [acquired, then shut down<\/a>, last year by Verizon] or [the pet-sitting service] DogVacay<\/a>, I don\u2019t think you can complain about the lack of exits<\/a>.<\/p>\n TC: So we\u2019re talking about Benchmark here. I don\u2019t think they\u2019ve jumped into life sciences.<\/strong><\/p>\n SP: Trust me, if [Benchmark\u2019s] Bill Gurley went after these targeted therapeutics and he was successful, he would have as\u00a0much liquidity as he could imagine. Sequoia is trying. Kleiner is trying. Either these firms pivot or they\u2019ll disappear. They just won\u2019t be relevant.<\/p>\n TC: You\u2019ve funded an array of companies from different industries. Are you saying you\u2019ll only do life sciences deals now?<\/strong><\/p>\n SP: We look at everything. We led a $35 million\u00a0round in [the networking company] Versa Networks<\/a>. We\u2019re about to lead another round in a healthcare company that\u2019s in stealth and we\u2019ll probably raise $35 million for them. We invest in about a dozen companies each year. But there\u2019s no mandate. This may be the last networking deal we do, or the last targeted therapeutics deal we ever do.<\/p>\n As far as the consumer-facing space, I don\u2019t know. I mean, the Flipagram\u00a0\u2014 I don\u2019t even know what this is. I was like, I can\u2019t listen to this for five minutes. It looks like Instagram to me with longer video feeds. Its numbers probably looked just like Google\u2019s early on, but I didn\u2019t care. \u00a0[Editor\u2019s note: Sequoia and Kleiner, Google\u2019s earliest venture investors, wound up co-leading\u00a0Flipagram\u2019s early funding. The company, which struggled to gain momentum,\u00a0sold<\/a> in February to the Chinese company Toutiao.]<\/p>\n Same with Jet.com. I just thought: If this is hugely successful, who cares? Amazon is already operating on razor-thin margins.<\/p>\n I think people in the Midwest, when they see five different billionaires that come out of a place like Twitter or 12 different venture funds that helped make a\u00a0company a\u00a0success, they might wonder: Is this the best we can do? Really?<\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/stuart-peterson.png?w=680\")
The way Peterson tells it, that’s the way he likes it. There’s a reason he didn’t put his name on the door 17 years ago when he left the hedge fund Cypress Funds in L.A. to open his own investment firm in Silicon Valley. “I’m not crazy about being the center of attention. I never wanted to do this by myself. I think you can be successful if you’re part of… Read More<\/a><\/p>\n\n<\/img><\/a>
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