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Gilbert H. Kliman, M.D., Managing Partner and leader of the Healthcare Investment Team at InterWest Partners

Gilbert H. Kliman, M.D., Managing Partner and leader of the Healthcare Investment Team at InterWest Partners

The managing partner and leader of InterWest’s healthcare investment team, Gil Kliman joined InterWest Partners in 1996. He invests in a broad array of healthcare opportunities, with a special interest in ophthalmology, digital health, and AI/robotics. Kliman pioneered InterWest’s highly successful ophthalmology franchise. He was an early investor in Avedro, Glaukos, LenSx, and IntraLase, all category-creating ophthalmic companies that became standard-of-care for eye surgery around the world.

Kliman built this important franchise for InterWest over the last twenty years through multiple companies, leveraging his unique background. A former practicing eye surgeon, he completed an ophthalmology residency at Wills Eye Hospital and a retina fellowship at Massachusetts Eye and Ear Infirmary as a Heed Foundation fellow. He has a BA from Harvard University, an MD from the University of Pennsylvania and an MBA from Stanford University.

Following is the conversation that we had with Kliman to understand his investment strategy and the way he has pivoted it over the years.

How has InterWest evolved as a venture fund? 

InterWest is a blue-chip, Silicon Valley-based venture fund that has been around since 1979, but always adapting to changing patterns of innovation.

For over 43 years, InterWest has partnered with entrepreneurs to build winning companies. With more than 200 years of operating and investing experience, InterWest has raised $2.8 billion, completed 94 IPOs, and participated in over 93 upside acquisitions. InterWest is currently managing InterWest X, a $650M fund.

InterWest’s primary focus is providing venture capital to early-stage healthcare and information technology companies. The Healthcare team invests capital in a wide array of early-stage companies, including preclinical- and clinical-stage firms with great potential, as well as companies with commercial-stage assets. The InterWest IT team typically favors funding development-stage companies, but also provides capital to early-stage companies with near-term ROI potential.

“We want to see a strong leader in the CEO and a strong technical team, because most things we’re investing in require visionary leadership and are highly technical.”

Although we generally invest in the early stages of a company’s development, we evaluate companies on their individual merits rather than their investment stage. We invest an average of $10 million to $15 million over the span of our involvement with each company in our portfolio.

Can you tell us about InterWest’s differentiated strategy?

InterWest is the lead investor in more than 70 percent of the investments we make, and on the board of 85% of our companies, reflecting our leadership role and ability to marshal resources and organize financings on behalf of our portfolio companies. We focus on new category technologies, often betting on a first-of-kind innovation and helping to successfully commercialize it.  Because of our long history, we have a strong network of entrepreneurs and executives to recruit into companies, and often we back the same entrepreneur in serial startups, as the level of success usually grows with successive companies. 

What does InterWest consider while making an investment?

While we are always intrigued with innovative technology, the main thing we look at is the team.

We want to see a strong leader in the CEO and a strong technical team, because most things we’re investing in require visionary leadership and are highly technical. For example, if you look at our three most recent high-value healthcare investments, Doximity, Glaukos, and PMV Pharma, they’re all led by very visionary founders and strong technical teams.

The other factor we’re looking for is a first mover, or first-of-kind technology. We have found the biggest successes to be pioneering companies developing new markets, rather than fast followers fighting to gain market share in established markets.

Please elaborate on a recent investment that InterWest has made?

We recently invested in Doximity, a digital health company, which has gone from startup to IPO with the help of our investment.

A leading professional network for U.S. physicians, Doximity (NYSE: DOCS) has more than one million members, including more than 80 percent of doctors and 50 percent of nurse practitioners and medical assistants. In 2020, the company added functionality to allow provider members to perform telemedicine visits with their patients, and Doximity rapidly became one of the leading telemedicine platforms. Doximity’s unique nationwide physician network and strong track record of rapid revenue growth, combined with impressive profitability, enabled the company to execute on a highly successful NYSE IPO in June 2021 at a valuation exceeding $4B.

The company was founded in 2010 by Jeff Tangney while he was an entrepreneur-in-residence at InterWest, and InterWest was Doximity’s first institutional investor.

I’ve played a lead investor and board role since inception. I previously backed Tangney in his first company, Epocrates, which pioneered the first mobile app for physicians. InterWest was a founding investor in Epocrates, which was acquired post 2011 IPO by athenahealth.

What would be your advice for companies trying to secure investments?

As a grizzled investor having been around for 30 years in the industry, I’m very excited to see that there have never been more opportunities than what I see now.

I would encourage entrepreneurs to pursue their passions in matching innovation technology with unmet needs, and focus on assembling the right human and economic capital to penetrate and develop new markets.

We have a whole new generation of younger investors coming up that I think are going to have new approaches and probably make innovation happen even faster. In healthcare innovation, that success means better care for patients. And that’s really my passion––to help innovation bring better care to patients.

I believe the next 10 years will be the most exciting times that I’ve seen in my career.

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