Venture Investing in Science

301 Pages·2017·5.63 MB·English

by  Douglas W. Jamison and Stephen R. Waite

Venture
Investing
Science
in
Douglas W. Jamison
Stephen R. Waite
and
Mark Anderson
foreword by
Venture Investing in Science

Columbia University Press
Publishers Since 1893
New York Chichester, West Sussex
cup.columbia.edu
Copyright © 2017 Columbia University Press
All rights reserved
Library of Congress Cataloging-in-Publication Data
Names: Jamison, Douglas W., author. | Waite, Stephen R., author.
Title: Venture investing in science / Douglas W. Jamison and Stephen R. Waite.
Description: New York : Columbia University Press, [2017] | Series: Columbia
Business School Publishing | Includes bibliographical references and index.
Identifiers: LCCN 2016047015 | ISBN 9780231175722 (cloth : alk. paper) |
ISBN 9780231544702 (e-book)
Subjects: LCSH: Venture capital—United States. | New business
enterprises—United States—Finance. | Science and industry—United States.
Classification: LCC HG4751 b .J364 2017 | DDC 332.6—dc23
LC record available at https://lccn.loc.gov/2016047015
Columbia University Press books are printed on permanent
and durable acid-free paper.
Printed in the United States of America
Cover design: Fifth Letter
To Charles E. Harris, mentor and kindred spirit.

Contents
Foreword by Mark Anderson ix
Preface xiii
Acknowledgments xvii
Introduction 1
1
Deep Science Disruption 18
2
The U.S. Deep Science Innovation Ecosystem 50
3
Deep Science and the Evolution
of American Venture Capital 80
Contents
4
Diversity Breakdown in Venture Investing 109
5
Fostering Diversity in Venture Investing 132
6
Deep Science Venture Investing 168
7
Our Choice Ahead 185
Appendix 1:
The Case of D-Wave Systems 205
Appendix 2:
The Case of Nantero 233
Notes 249
Index 263

viii
Foreword
mark anderson
There are probably as many venture investing models today as
there are venture capitalists around the world, yet we can rather
easily categorize their interests and effects by their targets. Unfor-
tunately, we are living in an era when the conventional icons,
target industries, and risk allocations common in the past have
changed to include short-term, often spurious (if lucrative) plays.
The hallmarks of this transition are apparent in the growing
forest of unicorn ($1 billion or more) start-up valuations for
companies that are based on little more than social touch, with
no revenues beyond inflated advertising statistics. An early lead-
ing indicator of the real risk inherent to this new category of
behavior was the entry, and then driving influence, of a group of
venture firms that made their deals without any apparent regard
to price.
While no good capitalist criticizes another’s attempt at maxi-
mizing return on investment, an obvious schism is arising between
short-term investments into profitless global social apps, for
example, and what Douglas Jamison and Stephen Waite term
ix