Foreword: The following is an abbreviated and edited transcript from the latest Medtech Trailblazers, the real stories behind the Innovators, Fogarty Innovation’s series of casual, in-depth conversations aimed at discovering the people who have forged our industry. To view part 1 of the videocast, click here.
While the accomplished Jan Garfinkle has been a key part of multiple foundational companies in the medtech industry, she has made an indelible impression as the founder and managing partner of Ann Arbor-based Arboretum Ventures. She supports the early-medtech ecosystem at the firm with a mission that is similar to Fogarty’s: driving down the costs of healthcare through innovation.
Arboretum has invested in 60 portfolio companies, which collectively employ 5,000 people and help over 10 million patients, making a remarkable impact on human health and our economy.
Andrew Cleeland (AC) had the pleasure of chatting with Jan (JG) to learn more about her path to Arboretum, along with insights and lessons learned along the way. The following is an excerpt of her interview.
AC. Tell us about growing up and your family life.
JG: I was born and raised in San Francisco with a younger brother, my dad who was an attorney and my mom who was a career guidance counselor for the City of San Francisco. At the time, it was a town much like the Midwest, a small, safe city where people were really nice—a great place to grow up.
My dad was my first mentor. He cared deeply about his kids and whenever we had an issue, he would help solve the problem. I remember how he would give me a ride partway to high school before heading downtown, and I just loved those times being with him because he was so compassionate and cared so much about what we were going through and wanted to hear from us. Because he was a corporate attorney, he was one of the first people I would talk to as I entered the business world, and it was always so helpful to have a trusted person to go to who really cared about me.
AC. You went on to get a biomedical engineering degree at UC Berkeley. How did that come about and how did you launch your career?
JG. I didn’t know a lot about schools outside of California, so I applied to the UC system and got accepted into the college of engineering at Berkeley. At the time, I wanted to do pre-med to eventually become a physician, so I decided to try bioengineering as it was partially considered pre-med. There were only two of us in the program since UC Berkeley had just launched this major.
When I graduated, the industry was still so new that there weren’t a lot of options for this particular major. I joined Procter & Gamble’s Pampers baby diapers division in nearby Modesto, and that experience sparked an interest in working in an industry that would help humans.
I was soon promoted to production manager and while we had a tough work schedule, I learned so much about managing people. It also expanded my love for manufacturing, which I consider to be at the heart of the company as you get to build and see the finished product.
While it was a great experience, it wasn’t biomedical engineering so eventually I realized I wanted to get into medical devices. I decided to go to business school and ended up at the Wharton School of the University of Pennsylvania.
AC. And while you were at Wharton you did an internship that cemented your interest?
JG. Yes—at Eli Lilly, which deserves so much credit for being a progressive pharma company that was far ahead of where all the other companies were at the time. They had a small group of five who was tasked with evaluating and acquiring medical device companies so Eli Lilly could broaden the impact of what they were doing in the healthcare space. In 1983, I was their summer intern working with Bill Hawkins, who eventually became the CEO of Medtronic; Ron Dollens who became CEO of Guidant; and Jay Graf who later joined New Enterprise Associates (NEA) as a VC.
They asked me which medical technology I wanted to work on, and I chose angioplasty. In my research I learned about Advanced Cardiovascular Systems (ACS), and I asked if I could go meet John Simpson. I spent a week with him in the cath lab, and I came out convinced that his technology for cardiovascular disease patients would revolutionize their outcomes. I went back to the team and told them how important this technology was going to be, and we started our due diligence.
I then went back to finish by MBA, and while I had the opportunity to return to Eli Lilly when I graduated, I really wanted to work for a startup, so I reached out to John and got a job at ACS in 1984.
AC. Eventually you moved onto other iconic companies in our industry. Tell us about your journey.
JG. I was a sales rep at ACS when John asked if I wanted to help him write the business plan for a new company he was starting, an atherectomy startup, which was Devices for Vascular Intervention (DVI). Although I didn’t know at the time what an atherectomy was (the shaving of the plaque out of the arteries), I agreed to help and eventually I joined the new company as head of marketing and clinical research. I led the PMA trial, launched the product worldwide and trained all the physicians on how to use the technology. It was incredible. Perhaps not surprisingly, both ACS and DVI were later bought by Eli Lilly.
That led me to my next company, Guidant, which honestly felt like an extension of ACS and DVI. Ron Dollens, the CEO, was the architect behind acquiring ACS and DVI and eight other companies. He was a master at leading Guidant as it grew into a very large organization with eight or 10 disparate companies.
It was a remarkable experience to be there at the time and work with someone (Ron) who is exceptional with people. And like John Simpson, he is unwavering in his belief that if you give people the skillset they need, they can accomplish pretty much anything. Half the organization was women, which wasn’t typical at the time, but Ron really believed in hiring the best, such as bringing Ginger Graham into the company. He was an incredible communicator who backed his employees and did an exceptional job creating an atmosphere where everybody who was there could excel.
AC. How did Arboretum come about?
JG. My husband and I had moved to Ann Arbor, Michigan, and I stopped working for a while to care for my three girls, an 18-month old and twins who had arrived nine weeks early. Eventually I got a call from Guidant asking if I would be interested in consulting, which I did for eight years, with Guidant and Compass, Guidant’s venture arm, as my largest clients.
At that time Michigan was really becoming very progressive. After receiving a big tobacco settlement, Michigan decided to use the funds to create a robust healthcare industry. They started what’s called the “Life Sciences Corridor,” where they gave grants and loans to startups focused on the healthcare space. My passion is helping early-stage healthcare companies, and I was starting to take on a new startup roughly every six months in addition to my work with Guidant. I was doing some due diligence for two local venture funds and realized I wanted to see what it’s like to work for a VC firm so tried to get a job at either.
One ended up shutting down and the other turned me down, so I decided to launch my own—I filed for a tax ID number and started Arboretum Ventures. Healthcare at the time in 2002 was about 12% of GDP, and I had seen from all the little companies I’d helped that anytime a new technology came out, it was being priced higher and higher. I felt that through innovation, we should be able to reduce healthcare costs, rather than having them continue to climb. So that’s the mission of Arboretum, which I founded almost 20 years ago. And, sadly it’s even more important now because healthcare is now about 18% of GDP, largely due to the volume of Baby Boomers needing healthcare.
I started the firm and a few months later, Tim Petersen, joined me. He’s been a phenomenal partner and played a key role in its development and growth. We started with a $250,000 venture fund grant from the state, which really kicked things off for us as a company. We have worked well as a team, from the first close of our first fund of $6 million to now on our fifth fund of $250 million, 60 investments, and we’ve raised $700 million in total.
AC. What would you describe as your key accomplishments?
JG. One is serving on the National Venture Capital Association’s (NVCA) board of directors and as board chair in my last term. NVCA represents all the entrepreneurial ecosystem in the US, with an influential group of venture fund members. Last year, I had the opportunity to testify in a Senate hearing on entrepreneurship and the importance of venture funds, and I went to the East Wing of the White House to talk about the science and technology industries because all the Senators and Congressman would love to have more entrepreneurship in their states.
But probably the most important thing I got to do as board chair was fight hard to make sure that venture-backed companies could apply for the PPP loan. The smaller ones in particular are desperate for capital, and many of them would have gone under without access to the loans.
The other thing I’m really proud about is the creation of Venture Forward, which is a very important effort by the NVCA to help create more diversity in venture funds and portfolio companies.
AC. If you were starting out in this career, what would you like to pass on that you know now?
JG. I think in part it depends what your end goal is. If your end goal is to be in venture or a senior role in a medical device company, it’s really important to go back to the core of learning how a product goes from concept all the way through to a sale. The only way to really learn that is to be in a startup and experience all those different phases. So I really encourage young people to take that opportunity to work in a startup. It doesn’t matter what your role is initially, just start learning—manufacturing, marketing, running a clinical trial, finance, sales. Each of those are super important, and it’s more difficult to gain that experience in a large company. At ACS I had the opportunity to help launch 20 different technologies and experienced a lot of different functions, which was very important to my end role.
The other thing I would recommend is learning to listen to your gut. If something’s not right or is bothering you, or you want to raise your hand for an opportunity, listen to yourself and then do something about it. You are your best advocate, so listen to your inner voice and act on it, which is definitely something that’s harder to do when you are young. Lastly, but maybe most importantly, remember that human relationships are the most important thing in business. Know that comes first, and then the rest all comes along.
AC. Any final thoughts on the industry?
JG. I think it’s amazing that those in leadership positions are willing to share their knowledge so freely. My summer internship basically made my career, and the fact that the Eli Lilly team let me go talk to John Simpson—that they would bestow that much responsibility on me—was incredible. I believe it’s vital for organizations to offer internships and give the interns opportunities to really excel and own a project. It’s why I’m excited about Fogarty Innovation and what is does for the industry and will do in the future.
When you read about Bill Gates and Steve jobs, you know they were the right people, at the right time to create the computer industry. If you look at Paul Yock, Ron Dollens and John Simpson, they have made this medical device industry, and it’s absolutely comparable in my mind to what has happened in the computer industry, and yet could be even more important because it’s healthcare. So thank you for including me in this incredibly stellar group. And ultimately, it’s the entrepreneurs who have made my company successful and who make this industry so fascinating.