Annie Lamont has been working in the venture capital world for about 35 years, with the past 30 as a general partner.
So she’s been involved in plenty of venture deals and realized many exits. As such, she’s experienced the ups and downs of a fluctuating market.
Now as managing partner of the growth equity investor Oak HC/FT, she’s developed her opinions on where VC is headed, especially within the firm’s core focus areas of healthcare and fintech.
In brief, Lamont has outlined three areas, which she calls “the Three Manias”:
- Early 1990s: Biotech Mania. IPO market frothy and public market stable, with 35 IPOs completed in 1991.
- 1998-2001: Dotcom Mania. Frothy private and public markets. Internet companies Amazon, eBay and Priceline founded.
- Today: Stay Private Mania. IPO market anemic, although public market is frothy.
So I reached out to Lamont to talk about the state of VC and the current exit environment.
She and Oak HC/FT have been busy, to say the least.
The Greenwich, Connecticut, firm, which is led by Lamont and General Partners Andrew Adams and Patricia Kemp, has invested in more than a dozen companies in the past two years. And it has boosted its team, most recently adding two venture partners: Ezekiel Emanuel, focused on healthcare, and Michael Heller, focused on fintech.
Oak HC/FT, which is investing from a $500 million fund raised in 2014, in June led a $50 million Series B investment in US HealthVest, which develops behavioral health facilities nationwide. Also participating were current investors Polaris Partners, F-Prime Capital Partners and Dr. Richard A. Kresch.
In April, the firm led a Series C round for Trov, the Danville, California, provider of on-demand insurance services via mobile phone. Other investors in the $25.5 million round include Australian insurer Suncorp Group, insurance technology provider Guidewire and fintech-focused venture firm Anthemis Group.
In addition, Lamont herself has stayed active investing and speaking. In June, she participated in a panel on women’s entrepreneurial leadership at the seventh Global Entrepreneurial Summit at Stanford University. The panel was moderated by U.S. Secretary of Commerce Penny Pritzker.
Q: I read about your involvement in the GES. What are your thoughts on women in VC?
A: In terms of the present and future, I am seeing female expansion at every level of VC and entrepreneurial activity.
There are significant players like Kleiner Perkins Caufield & Byers being dominated by awesome women with Mary Meeker, Beth Seidelberg and Lynne Chou, and Canaan Partners with Wende Hutton and other female partners.
Women, now more than ever, have become mainstream in some of the best venture brands in the business.
Q: So many smaller venture funds are emerging and accelerators are coming into existence, many of which have female advisers. Is that where you are seeing growth for women in VC?
A: Yes. Small funds and accelerators are creating more opportunities for women to get in the door, which we are also seeing.
However, they still remain a much smaller fraction than their male entrepreneur counterparts. But at the end of the day, the odds of seeing a female CEO at a company is 5x higher than a decade ago, and that is progress.
Q: You wrote about mentoring after you participated in the GES. Whom did you look up to and perhaps use as a mentor when you came into VC in 1982?
A: I found qualities I admired in many venture capitalists I worked with early on and still to this day. However, one stands out the most to me. Jerry Gallagher [a general partner at Oak Investment Partners, who died in 2014 at age 73] was an exceptional venture capitalist and human being. He taught me to never compromise on people [and] my values and to always maintain a long-term outlook.
He had the single best track record in retail VC of anyone in the country and he did it in the most modest and deliberate way. He personified the word “character.” When dealing with him, an entrepreneur would always know what he/she would get: a thoughtful response supported by the facts and fair treatment.
These are the qualities that we strive to emulate every day, at every meeting, with every investor and entrepreneur at Oak HC/FT.
Q: At Oak HC/FT, are you seeing pricing return to normal levels?
A: We’re still seeing great companies getting founded and at high valuations. The good companies are still getting funding at more reasonable valuations. The poor companies, which could raise money a year ago, now, I don’t know, probably not.
Part of the problem with VC is that we’ve been very focused on valuations. We’re starting to see a normalization.
Q: What types of company trends are you seeing?
A: In healthcare services, it’s about delivery of care. The trend is in consumerism and how patients are being managed.
Look at our investment in Hometeam in New York. It’s about connecting seniors and providing home-care services for older adults. It’s more about keeping people out of the hospital.
Q: What are you seeing in fintech?
A: A lot of focus is on payments and data, as well as compliance.
Insurance is a growing area. Look at our investment in Trov, which provides on-demand micro-insurance. It’s an interesting and innovative approach for consumers, like Millennials, to jump on, as opposed to traditional insurance-sales models.
Q: In regard your Three Manias, do you see startups raising capital today exiting on the public market?
A: I don’t see a mania for the next three years. There will come a time when there’s a backlog of companies from being created now that will go public. But historically, 70 percent of companies are bought via strategic acquisition.
Still, good companies will always go public, and you’re seeing that now.
Q: What are your thoughts on the current IPO market, particularly for life sciences?
A: As I am no longer actively involved in biotech, I can’t intelligently comment on that space other than to say that as long as big pharma continues to buy promising companies at exceptional valuations, you will have a robust but perhaps more selective IPO and public market.
In the coming years, I believe there will be a number of great tech-enabled and healthcare-services companies emerging as excellent targets for strategics, but also good candidates for the public market because of their ability to scale.
Action Item: To read a blog post from Annie Lamont about women in venture capital, go to http://bit.ly/29DmpzH
Photo of Annie Lamont courtesy of Oak HC/FT