Physician Turned VC Facilitates Transfer of Technology, Education and Quality of Life
Drew Senyei, M.D., Managing Director and General Partner, Enterprise Partners Venture Capital
Most universities and research institutions across the country, particularly science and engineering departments, are eager to accelerate the advancement of innovation. Otherwise known as "tech transfer," this is the process by which patents owned by universities are licensed to startup or existing companies and brought to market.
Drew Senyei, one of the first physicians to become a venture capitalist, has been instrumental in raising $1 billion for Enterprise Partners Venture Capital (EPVC) based in La Jolla, Calif., where he serves as managing director and general partner. EPVC – the largest VC firm headquartered in Southern California – invests in areas where its directors have deep domain expertise. In the past decade, Senyei's knowledge in the area of life sciences has become an increasingly important VC niche, fueling the commercialization of technology that saves and changes lives.
Advancing Tech Transfer
The VC process typically involves meeting with dozens of entrepreneurs and providing feedback and suggestions for advancing their proposed products or services regardless of whether the VC firm ultimately funds them. In its efforts to mobilize technology, EPVC interacts extensively with university tech transfer offices across the country.
"The tech transfer process in general has a couple of significant issues," says Senyei. "First, although universities really want to promote it, they don't all have the infrastructure to do it in an efficient manner. Sometimes the decision process involves multiple offices instead of a single entity, so a small company interacting with the university has to go through four or five offices.
"Second, there is no standard contract and policies vary widely from university to university. Some take equity. Some have restrictions on sponsored research. Some limit how much time a faculty member can spend with a startup. It's that much harder to get a license without the inventor's know-how behind it. All of these issues present unique problems you have to understand and solve to move technology out and into the commercial space."
In addition to his firm's interaction with tech transfer offices, Senyei makes time to share his knowledge of the field with Northwestern University, where he earned his M.D. in 1979.
"Drew Senyei is a very valued member of our Board of Trustees and our Technology Transfer Committee," says Henry Bienen, president of the university. "He has also been a generous supporter of Northwestern, providing funds to help move basic science to the commercial realm via support of faculty efforts. Drew is an extremely knowledgeable biotech venture entrepreneur, and he takes what he knows into the university arena."
This coming year, Senyei will step into the role of chairman of the Jacobs School of Engineering Council of Advisors at the University of California at San Diego (UCSD), which helps the school interface with the business community. He had been working extensively at UCSD on licensing technology for several companies when the dean asked him to join the group about five years ago.
He also meets with five students who participate in a mentoring program sponsored by UCSD’s Rady School of Management. The group meets, says Senyei, "as the spirit moves us." The Rady School opened its doors to executive MBA students in September 2004 and will welcome its first full-time MBA students this fall. Unlike conventional MBA programs, the Rady School targets students involved in science and technology. Senyei's partner at EPVC, Bill Stensrud, serves on the board of directors.
Education as Equalizer
Senyei is an ardent supporter of education, the common thread in nearly all of his extra-curricular activities, with the exception perhaps of his long-time support of the San Diego Opera, where he now serves as president.
Senyei traces his passion for education to a deep appreciation of the help he received from others in pursuing his education. Born in Budapest, Hungary, Senyei was six years old in 1956 when his family fled during the Hungarian Revolution. They eventually settled in Hollywood, Calif. Senyei won one of four Walt Disney Foundation scholarships in 1968 and earned a B.A. in biology from Occidental College in Los Angeles.
"My father was the ultimate risk-taker," says Senyei. "He came from a Communist country with me on his back and started from nothing at the age of 32. My parents really instilled in me the value of education in terms of access to opportunity. It is one of society’s great equalizers."
Today, Senyei is helping to make similar opportunities available to enable children to attend The Bishop's School in La Jolla who might not otherwise be able to afford a private school education. Senyei came up with the idea for Equity in Education when he observed the same usual suspects being asked to support numerous causes in the community but rarely encouraged to donate gifts of private stock, at least partly because gifts of private stock are not tax deductible.
San Diego being a very entrepreneurial community, Senyei and several others constructed a program in which entrepreneurs can pledge private stock to the school and write off when the company goes public.
"We were pretty successful," says Senyei, who will only say that the effort resulted in a "few million for a small high school" serving grades seven through twelve. Senyei serves as chair of the 501c3 nonprofit organization known as the Bishop Knights Alliance Trust.
In addition to scholarships for students, the program arranges for entrepreneurs to share their stories with students. Recently, for example, the founder of Rubio's chain of fresh Tex Mex restaurants, a former surfer, told students how his business evolved from a taco shop on the beach to a public company. Other recent visitors include Chris Simmons, an entrepreneur from New Zealand, and Sue Hesse, entrepreneur-in-residence with the Kauffman Foundation, one of the premier charitable foundations in the world dedicated to accelerating entrepreneurship.
From the school's perspective, one of the most significant ways the trust helps is by providing housing and mortgage assistance to faculty members to help offset San Diego's high cost of living.
"Dr. Senyei is one of the brightest guys I know," says Headmaster Michael Teitelman. "He's been on our board for five years. He's helped us with technology. He supports building the school's resources, attracting faculty, and marketing the institution. He's a great brain who's very involved in giving back."
While Senyei did not create Equity in Education with a view towards replication, he concurs with others who have suggested that a similar program to encourage pledges of private stock could be implemented by universities to help widen access to entrepreneurship education.
No Hard Decision
Senyei got his first taste of entrepreneurship as a second year medical student coming up with ideas while sitting in pharmacy class and obtaining funds to test them in the lab the following summer. Eli Lilly hired him as a consultant in 1975 and licensed the patents.
In 1987, Senyei joined the obstetrics-gynecology faculty at the University of California at Irvine and, a year later, patented a test now used worldwide to predict pre-term birth two-to-three weeks early. He joined EPVC in 1988.
Leaving clinical practice for an industry in its infancy was "a hard decision and a huge risk," says Senyei. It is not hard, however, for him to decide to give back.
As a successful entrepreneur and a venture capitalist who makes his living evaluating and taking chances on other entrepreneurs' ideas, Senyei was a logical choice to be asked to judge the Ernst & Young Entrepreneur of the Year regional competitions in 2003 and 2004.
As for the future, Senyei sees himself involved in the effort to gain relief for small companies from the requirements of Sarbanes-Oxley that are making it hard for them to compete in the marketplace. "Over the next few years," he says, "it's going to be really important to make sure that small companies continue to be competitive."
The fruits of Senyei's decision to marry his knowledge and love of science to a career as a venture capitalist have been many. Helping his alma mater move discoveries to the marketplace brings a special satisfaction. Universities and researchers across the country are constantly in need of help that entrepreneurs with advanced knowledge in science, engineering, computers and related fields are uniquely qualified to provide.
Hopefully, it's only a matter of time before more folks like Senyei find out how much fun it is to help brilliant people in ivory towers change the world.
© 2006 Ewing Marion Kauffman Foundation. All rights reserved.