Mayfield's newest partner Arvind Gupta staked his whole career on 'climate change being real,' and is now challenging other VCs to step up investing in 'conscious capital'

  • IndieBio founder Arvind Gupta joined VC firm Mayfield as a partner on Wednesday. He will continue investing in biotech startups at Mayfield, but he is also planning to focus on an area he calls "planetary health."
  • At the biotech accelerator IndieBio, Gupta helped founders, primarily scientists and academics, get their young companies off the ground by establishing resilient business models.
  • That skill set will come in handy with sustainability startups as well, Gupta told Business Insider, even as green technology has fallen out of favor with other investors after major investment misfires in the early 2000s.
  • According to Ursheet Parikh, with whom Gupta will work at Mayfield, the "hype cycle" around healthcare and sustainability technology startups will help create more resilient business models and ultimately lead to better investment opportunities.
  • Both Parikh and Gupta told Business Insider that investing in these two areas is the right thing to do as an extension of Mayfield's new "conscious capital" initiative that aims to advance equality in several areas within the broader venture capital and tech industries.
  • Click here for more BI Prime stories.

Two of the biggest crises facing humanity today — the coronavirus pandemic and the climate crisis — also represent two of the biggest opportunities, if investors have more than just profit in mind.

Healthcare and sustainability technology haven't always been hot VC deals. The businesses typically require lots of cash upfront to cover heady expenses related to hardware production, research costs, or a combination of both. They rarely deliver the kind of returns on investment that the typical enterprise software startup can reap for investors. But with both industries at the forefront during the crises, some investors are willing to overlook the less-than-ideal unit economics for the potential positive impacts these companies could have on humanity.

"I bet my career that climate change is real and if you don't believe that, it's the wrong fit," Mayfield partner Arvind Gupta told Business Insider. "If you don't believe the data, that health and lifespan going down for the first time in a first-world country is not a sign that something is deeply and fundamentally broken, I think you are not willing to believe what you are seeing."

As Mayfield's newest partner, Gupta is planning to co-lead the 50-year-old firm's growing health investing arm by considering what he calls "planetary health" in addition to more traditional human health.

"Beyond the typical venture capital success measures is the additional metric of affecting billions of people's lives around the world," Gupta told Business Insider. "These huge pools of capital to redeploy to opportunities that can make our children's world better rather than make a quick dollar on an application that may not be around in that typical venture timeframe."

Gupta's comfort with long-term investments stems from his background at biotech startup accelerator IndieBio, he said. There, he worked closely with academics and scientists who were in the early days of building a company based on compelling technology or research breakthroughs.

"We helped them derisk the technology and helped scientists figure out how to build a business around the technology they are developing," Gupta said. "We graduated companies that are real companies, not science projects."

IndieBio graduates' success, and thus IndieBio's, is a stark contrast to the "green tech" misfire of the early 2000s. Many VC firms at the time invested massive amounts of money in unproven tech with large overhead and operating costs. Many of those companies went under in the 2001 crash, taking their investors' funding with them.

"After the first bubble, the world tends to be more measured and investors do more diligence, which is good for the ecosystem," Mayfield partner Ursheet Parikh told Business Insider. "Planetary health is part of the sustainability hype cycle, and will there be another hype cycle? Probably, but we will have great companies on the other side."

Parikh has helped Mayfield develop a new "conscious capital" initiative, along with managing director Navin Chaddha and Mayfield's other partners. It seeks to look beyond financial returns when investing in companies that may have the potential for adding to the public good, Parikh said. Luckily for Parikh and Gupta, that includes the firm's focus on biotechnology and sustainability, the areas in which both partners are focused.

"Conscious capital is where I would like to place my time and energy for the next three decades of the working life I have left because I can measure my life through my children," Gupta said. "Will they say 'thank you' for being a great dad but also for helping build companies that made a difference in our world? That's my only measure of success."

Do you have a personal experience with the coronavirus you’d like to share? Or a tip on how your town or community is handling the pandemic? Please email [email protected] and tell us your story.

Get the latest coronavirus business & economic impact analysis from Business Insider Intelligence on how COVID-19 is affecting industries.

Source: Read Full Article