Upcoming Events
Synergist x Ellevest: Making (& Keeping!) Your New Year's Resolutions
Wednesday, January 13 @7-8PM ET
Please join us with Emily Green, the Director of Private Wealth at Ellevest, to discuss how we can achieve our financial goals in the new year. RSVP here for the zoom link.
Happy Holidays!
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Synergist Senior Sound Bites - December 2020:
Sara Nayeem
Partner, New Enterprise Associates
A.B. Harvard University, M.D., M.B.A. Yale University
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Background
Sara Nayeem, M.D. is a Partner at New Enterprise Associates (NEA), a large diversified global venture capital firm. Sara joined NEA's healthcare team in 2009 and focuses on investing in biopharmaceutical companies. Prior to joining NEA, Sara was an Investment Banking Associate at Merrill Lynch's Global Healthcare Group, where she advised biotechnology, pharmaceutical and medical device companies on numerous mergers, acquisitions and financing transactions. Previously, she worked as an Investment Banking Analyst at Morgan Stanley. Sara concurrently earned her MD (cum laude) and MBA from Yale University, where she was a Yale MBA Scholar. She received her AB (magna cum laude) in Biology from Harvard University.
Sara serves on the boards of the New England Venture Capital Association and BioHealth Innovation Management, and on the Advisory Council of Incubate Coalition. She was included on Fierce Biotech’s 2019 list of the Fiercest Women in Life Sciences and was selected three times as one of GrowthCap’s Top 40 Under 40 Growth Investors.
Tell us about your background.
I studied biology in college and was rather reluctantly pre-med. My father, sister, and various other family members were physicians, and like many undergrads I didn’t know of many careers beyond medicine, law, or engineering. I liked science but wasn’t fully convinced that I wanted to be a clinician. During my junior and senior years, I began to take economics classes and started working part-time at a local consulting firm. I started to wonder if maybe I should go into the business world. I applied to medical school but deferred at Yale for two years to go work as an investment banking analyst at Morgan Stanley. At the end of those two years I decided to matriculate to medical school as I felt that I might still want a clinical career. Once at Yale, I found myself gravitating toward the business and policy aspects of medicine again, so I decided to do a joint MD / MBA degree. I was still planning to do a residency – I was thinking of ophthalmology, which is a relatively entrepreneurial field – but a couple of months into the MBA work I realized that I just liked the strategic aspects of healthcare more than clinical work. I completed a summer internship in Merrill Lynch’s healthcare investment banking group, and I decided to return full-time after graduation. While at Merrill I began to meet small, venture-backed companies through a colleague who had practiced medicine as well as worked in VC previously. While these companies didn’t have a lot of work for Merrill at that point in their life cycle (this was 2007/2008, and the IPO window wasn’t open for early stage biopharma, nor were they yet M&A targets), I found the issues they were struggling with more interesting than the work I was doing for larger, commercial-stage clients. I started to look into VC and in January 2009 I joined New Enterprise Associates as a Senior Associate. I have been at the firm for nearly 12 years, focused on biopharmaceutical investments.
Why did you decide to pursue a career in investing and specifically biotech venture capital?
Given my background in science / medicine, I was drawn to the opportunity to get a first-hand look at exciting innovations in the biopharma space, as well as to be involved in bringing new therapies through the clinic to patients. I was also intrigued by the role VCs play as board members, helping to operationalize companies and set strategy.
What is your favorite part of your job?
I love the moment when a company in which I’ve been involved in building and financing gets a new drug approved. It’s very gratifying to see new therapies being made available to patients and to feel as though I played a small role in the process.
Most challenging thing about your role?
Being a venture investor involves saying NO to new investments a lot and saying YES only a few times a year. There may be a dozen things that are compelling about an opportunity, from technology to team, but one looming risk around which the whole thesis falls apart. Often one gets really excited about a new company, only to learn about some challenge partway through diligence.
What are some skills and key lessons learned to be successful in investing?
We talk a lot about “pattern recognition”. This means having seen a lot of successful investments, and some unsuccessful ones, and being able to discern what separates them. Sometimes this isn’t predictable; early stage science is challenging and clinical trial outcomes are binary and to some extent, stochastic. But the hope is that over time one starts to be able to pick out winning theses and gauge management teams. One way to make sure you’re developing a critical eye is to sit through a lot of pitches, ask a lot of questions, and share your views afterward with senior investors (don’t wait for them to share theirs first!) Of course, being at a firm that teaches you deep (but efficient) diligence is key. Alongside developing the ability to recognize compelling investments, one must also cultivate ways of sourcing them. This happens naturally to some extent, but networking and building an external profile are also essential. And finally, you need to be able to win deals; some of this depends on people feeling you’ll be a strong contributor on the board. Ideally as a board member you’re supporting management, anticipating issues you’ve seen in other investments, helping with each new fundraising cycle, and adding value around hiring, connections to strategic partners / acquirors, etc. Serving as a formal or informal board observer as much as possible early in your career will help you step into board roles confidently. And make it a point to touch base with the deal sponsor frequently on any company where you’re involved – this will remind them to include you on more calls and perhaps get you involved with company projects.
How do you balance your personal life with a demanding job?
I have a very supportive and understanding husband, which helps! He’s a cardiologist and he’s slowed down his own career to have a more predictable schedule, which is critical with young kids and my (pre-COVID!) travel schedule. That being said, it’s certainly a daily struggle to maintain a sense of “balance”. Many working mothers end up feeling guilty all the time – when they’re working, they stress about whether the kids are okay at home, and when taking time for family, they feel pressure to respond on work obligations right away. I think we need to give ourselves permission here too to not be “perfect”. And to recognize that taking time for ourselves, for our significant others, actually makes us better at work and at home.
What is your advice to young women just starting out their careers in investing?
1) Cultivate relationships – to build a track record, you have to work for and with people who believe you are developing your own pattern recognition (and therefore give you the opportunity to invest both initially and as companies go through the unavoidable ups and downs). This requires, especially for women whose accomplishments and potential are often under-recognized, developing strong working relationships with your partners.
2) Let go of the people-pleasing – for some of us, performance is paramount based on upbringing or work in client-facing roles (women are often socialized to feel they must be “perfect”). But many jobs, including VC, require as much work outside the direct view of your boss as direct work FOR your boss (building a network, reading about the industry, sourcing deals). To help force time spent on everything outside of “deliverables”, set up habits (e.g., reading every AM before calls start; setting up a couple of networking meetings on every work trip).
3) You don’t get what you don’t ask for – whether board seats or a promotion or the ability to coordinate directly with a CEO to tackle a project, ask even if you expect the answer to be a no. You’ll be signaling your commitment / interest, and the next time the answer is more likely to be a yes.
What do you think would help increase diversity and gender equality in investing?
I have a few suggestions for VC firms to increase diversity and cultivate a sense of inclusion and belonging.
1) Use recruiters and not just word of mouth to access a more diverse group of candidates.
2) Anonymize case studies and if possible, even candidate names on the initial resume review (studies show the same resume with a minority name on it will produce fewer interview offers than a white-sounding name, and that people tend to judge the same piece of work more harshly if they believe it was written by a minority or a woman than if they believe it was written by a white male).
3) Expand networks to meet people earlier in their careers and shift searches to people a bit younger when possible. In an industry in which diverse professionals are underrepresented at the highest levels, by definition a more senior pool of candidates is less diverse (hiring more junior people requires more focus on training and mentoring, but these also promote inclusion, belonging, and retention).
4) Think critically about the criteria on which professionals (and potential investments) are judged and try to make these consistent. E.g., ask the same types of questions in every interview and look at the same metrics for judging companies. In review processes, look to see if multiple people have the same "growth areas" or strengths – is the underrepresented professional being treated similarly to how a white male is or was treated? Studies show women and those from underrepresented groups have to do more, over and over, to get the same credit as a white male. E.g., women and minorities are promoted based on accomplishment, while white males are promoted based on potential.
5) Educate your workforce on implicit bias, microaggressions, and inclusive leadership.
6) Make space for conversations around different experiences team members have had to foster understanding and build awareness.
Hobbies outside of work?
I’m a volunteer with the Junior League of Washington; this year I’m co-leading the efforts on diversity, equity and inclusion. I also serve on advisory boards for a few non-profits, including NEVCA, Incubate Coalition, No Patient Left Behind, and BioHealth Innovation. But I suppose my hobbies are mostly those of my three young boys – an endless stream of Legos, Star Wars role play, and recently, these cool “paint by sticker” books. (Believe me, it’s a thing.)
Favorite book, podcast or source of news?
For biopharma industry news, I’m a big fan of “The Readout Loud”, a podcast from the health news organization STAT. I also like Samir Kaji’s “Venture Unlocked” podcast – it gives a lot of great perspectives on how to stand out as a venture investor, both to LPs and to management teams. I also listen to the five minute Coronavirus Global Update most days, but I’m hoping to be able to unsubscribe from that in 2021!
Thank you for your time, Sara! To learn more about NEA, click here.
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