Funding innovation in the healthcare sector
Adair Newhall is a Principal at Greenspring Associates. Founded in 2000, Greenspring is a leading global investment firm that today manages over $3.5 billion in capital commitments worldwide. Greenspring acts primarily as a fund of funds, backing a host of dynamic venture capital firms, including Greycroft Partners, Revolution, and Volition Capital. Additionally, Greenspring has been involved with private companies such as GrubHub, FanDuel, and Alibaba Group. Before joining Greenspring, Adair managed several portfolio companies as a Principal at Domain Associates, a venture capital firm specializing in healthcare. Earlier this year, citybizlist interviewed Adair’s older brother, Ashton, who acts as the Greenspring’s co-managing partner.
Can you take us through Greenspring’s strategic focus and your role?
ADAIR NEWHALL: Greenspring Associates is a venture platform. It started as a fund of funds in 2000, but we’ve evolved. Now we have both a direct and secondaries funds as well, which allows us to engage the ecosystem of venture capital from micro VC all the way to growth equity. Our strategy is that we back national venture managers out of the fund of funds. They source the deals. They’re not in the Baltimore area. When we do our deals, they’re expansion stage, so Series B to Series D revenue generating. What we need to do is put a spotlight for the Series A managers here in this ecosystem, get them to fund those companies, and then rally around that to our strategy.
You have a great deal of experience in the healthcare industry, and your former company, Domain Associates, is a Greenspring fund manager. How did Greenspring get involved in healthcare, and what can you tell us about venture capital in this highly specialized market?
These transactions focus mostly on specialty pharma and tools and diagnostics. The belief is that you can select a very small patient population and that helps you with getting drugs to the FDA faster. The costs are less and the efficacy can be better if you can identify the patients that react to the drug better. And so tools and instrumentation were incredibly important. I think you’re going to see a new wave in healthcare: you’re going to see a lot more M&A events, but it has a lot to do with the tools and instrumentation that came out of the San Diego area, because of Lumina, because of Life and Thermo Fisher—these are all the biggest companies in those spaces.
Since joining the firm, you’ve spearheaded a direct investment initiative. How does that compare to the fund of funds model already in place?
We can touch the groups that are as low as micro VCs, funds that are as low as $150 million, and then we can have touchpoints with the groups that are in growth equity. This is a platform we found, whether it’s through directs, secondaries, or fund investments, that gets us exposure and keeps us engaged with those decision makers, those company builders.
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