Lumira launches new philanthropy initiative to support Canadian healthcare innovation
A CVCA interview between CVCA CEO, Mike Woollatt and Peter van der Velden, Managing General Partner, Lumira Capital
MW: Peter, Lumira announced this morning a really unique strategy to donate a portion of the carry earned by the partners of the firm on Lumira Capital Fund IV to leading healthcare foundations across the country. Can you tell us a little about where this idea came from?
PLV: The idea for all of this started over a year ago during one of our partners’ meetings. We were discussing the really exciting changes and positive momentum within the Canadian healthcare innovation ecosystem and how the evolving challenges and pressures on funding innovative science in Canada might ultimately negatively impact that momentum. As the discussion evolved, a couple of the partners bemoaned their perception of the lack of impact their personal healthcare philanthropy was having and suddenly the idea of marrying these two concepts came together.
MW: So what are the objectives of the initiative?
PLV: The idea is really simple. We wanted to put in place a long term philanthropic strategy that was fundamentally designed to benefit the healthcare ecosystem in which we and our portfolio companies work. At the same time, we wanted to connect the donation to our successes in building best and first-in-class healthcare companies and ensure that our donations would be focused on supporting innovative research and innovation adoption within the Canadian healthcare ecosystem. Equally importantly, we wanted our relationship with each of the foundations to be more than simply “donor and recipient”, as we are looking to be a resource for these foundations as they build out their innovation strategies. Ultimately, we hope to build a highly symbiotic relationship with each of the institutions we have decided to support.
MW: How did you choose which foundations to support?
PLV: That was actually much more complex and time consuming then we had ever imagined. We initially put together a list of 40 of the top healthcare related foundations in Canada and we then started to reach out to learn about their specific strategies and programs to support the development and adoption of healthcare innovation. We thought, “Hey this will be super easy as we are giving away money”, but actually the first months were pretty challenging as our donation strategy didn’t fit the traditional donation model. While some of the foundations got the idea immediately, others simply did not. Having said that, once we got the dialogues going we met so many interesting people with so much passion and vision and we learned about so many interesting programs and ideas that it was all a bit overwhelming. In the end it became very difficult to narrow down the list to choose the initial cohort of foundations to support. While we are obviously very excited about our initial foundations named, we are a bit disappointed that we couldn’t support everyone we engaged with.
MW: You talk about an initial cohort of foundations, are you expecting to name more?
PLV: We most definitely are. With the new Fund one of the nice developments has been the addition of a significant number of family offices as investors in the Fund. Some of these family offices are already very significant donors within the Canadian healthcare ecosystem and so one of the things we have decided to do is work with some these investors to identify and support Foundations that are important to them while still meeting our broader goal of enabling innovation development and adoption.
MW: Wow that really is a whole different level of engagement with your investors.
PLV: It is, and we are really excited about it.
MW: Do you know of other managers in Canada that are doing this?
PLV: While I can’t be 100% sure, I think the short answer is no. We have seen a few managers in the US launch similar initiatives but I don’t know of any other managers in Canada with this kind of a program. Having said that, there are programs in Canada like the Upside Foundation that targeting this kind of philanthropy from VC-backed Canadian companies.
MW: Let’s talk about the new Fund, the process of getting it raised and exactly what it means going forward.
PLV: While fund raising is never easy I think the process this time was really helped by three things. The first was great support from our existing investors. All of our existing institutional investors returned to Fund IV, which is fantastic. Second, while we are only at the midway point for our existing funds, 2017 is already proving to be a great year for our portfolio companies. With two IPOs (Zymeworks and G1 Therapeutics) and great clinical data from companies like Aurinia, our portfolio companies have been able to raise over CDN$500 million in the first half of this year at significant valuation step-ups. These tangible successes are driving very meaningful fund performance and there is still lots more to come. Finally, we have seen very positive engagement from new institutional, corporate and family office investors which has really helped to broaden our investor base. Altogether, I think we are extremely well positioned to continue in our role as Canada’s most active private venture fund manager focused on healthcare. In fact, I would say that our pipeline of opportunities has never been deeper or better and we have already executed two term sheets in the first 30 days since the Fund has been up and running.
MW: Congratulations to you and the team on this unique initiative of tying Fund success to aligned philanthropy and, of course, on the new Fund.
PLV: Thanks very much, Mike. I think that this really is an exciting time for the Canadian venture capital ecosystem and it is great to enjoy fantastic support from our investors, both returning and new, and to be able to do something a bit different for the community in which we and our portfolio companies work.
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