Stead concedes there are a limited number of medical center teams that understand entrepreneurial people well enough to know how to lead them. "Harry Jacobson [MD, vice chancellor for health affairs at Vanderbilt University] has been a very successful entrepreneur himself and does know how to nurture that kind of endeavor. If you look at academic tech transfer, you'll discover that there have been very few big successes, like Gatorade [developed at the University of Florida in the 1960s]." In most cases, Stead says, such successes often result from the sheer popularity of the product, not the organization's effectiveness in managing the program. "At Vandy, to get the kind of acceleration and breakthroughs in workable healthcare, we have to fundamentally change the relationship between academia and industry that makes each component inside the other rather than silos. We're struggling through that with key partners."
As for Vanderbilt's experiment with the venture fund, "there have been discussions about creating more than a one-shot deal," Stead says. "But I'm not aware of any commitment to do more of that."
Bull's-Eye for Private Equity
Targets for healthcare private equity investing are early, middle and late-stage companies engaged in providing services or products that will have a positive impact on hospital or health system operations, cost structures and quality of care. Targets will exhibit the following characteristics:
Source: Strategies in Capital Finance. Next Generation Solutions: The Case for Strategic Health Care Investing.