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Friday, May 15, 2009
Michael Greeley talks about VCs and recovery funds
By Mass High Tech staff
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Michael Greeley is a general partner at Boston-based Flybridge Capital Partners and chairman of the New England Venture Capital Association. Last month, the National Venture Capital Association elected him to its board of directors. Mass High Tech staff writer Galen Moore spoke with Greeley at the Nantucket Conference earlier this month about how government can play in the venture field.
Q: What’s the role of government in helping the venture industry turn around?
A: I think where government can be very helpful is in properly allocating the stimulus dollars that are about to flow. My fear is they’re not getting comprehensive advice. I was suggesting to (Massachusetts) Gov. (Deval Patrick) that there be a group of entrepreneurs and venture capitalists that would help think about the allocation of those dollars. I worry that the allocation will be really inefficient and will be a lot of pork barrel, so it’ll be directed toward projects that won’t be commercially successful. I think that’s a bad use of resources.
Q: If you were in that group of advisers, what would you push for?
A: I’m worried that electronic medical records, a very important initiative, is budgeted at $20 billion. That to me just seems an extraordinary amount of money for that one issue.
I think the opportunity better manifests itself as a connected health paradigm. For instance, there’ll be smart devices near, on, or in your body that will connect you to a broader network of payers and health care providers, and you’ll have this ability to deliver the appropriate therapy at the appropriate time in the appropriate dose, or you’ll have the ability to alert people in advance of some condition. Where I think the stimulus initiative could be really helpful is, acknowledge that there are opportunities across a wide spectrum. By the nature of connected health, that’s going to involve really dozens of companies to contribute hardware and software.
I think the stimulus plan needs to plant thousands of seeds rather than being so focused on EMR. I’d like to see out of this an allocation process that gives smaller grants to more companies. And let each company try to solve its piece of the overall puzzle, rather than being so rifle-shot that we’re going to solve EMR. That is only part of the overall solution.
In this environment there’s sort of a flight to safety. You see investors not prepared to take new market risks, and they just want to make incrementally better companies. That’s what EMR smacks of. That doesn’t really change the equation. We’ve had EMR technologies for 20 years and 3 percent of the doctors use it. So they clearly don’t put a high premium on it.
Q: What would you advise against?
A: I worry that the government will be very heavy-handed in regulation, frankly. I worry that the venture capital industry will be regulated as if it were a hedge fund or a private equity fund. And that just doesn’t take into account the job creation potential that companies have. To do anything that retards the ability for entrepreneurs and venture capitalists to start companies I think is a negative.
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