What kind of person makes a good venture capitalist? A litigator? A soldier? A policy chief at a multinational giant? Or the multilingual child of immigrants? In the case of Nava Swersky, founder of Israel-based Columbine Capital, the answer is ‘all of the above.’
Swersky seems to have already had several lifetimes worth of experience even though she’s only in her early 30s. She returned home to Israel at the beginning of 1999 after more than a decade spent wandering the globe and honing her business skills in the field of life sciences. Now she aims to help Israel’s biotechnology industry achieve success on a par with that of the country’s thriving high-tech sector.
Swersky was 19 when she experienced the ‘defining moment’ that made her want to be in the business world. As a law clerk sitting at a negotiating table, the thought flashed through her mind, ‘I want to be sitting there, making those decisions, rather than going back to the office to draw up the legal documents.’
Legal eagle
In fact, starting her career as a litigator turned out to be ‘not bad training’ for the world of venture capital, but with this difference: ‘A litigator can usually make a point. But in order to be a good negotiator you need to listen.’
Born of South African parents, Swersky grew up to be Israel’s youngest ever lawyer at 20 and joined a law firm specializing in commercial law. She was drafted into the Israeli army and after officers’ training was appointed defense counsel for the air force and the navy, and as assistant chief prosecutor before ending her military service as a captain.
At 24, in search of a broad international perspective and hands-on business experience, Swersky went to Switzerland to do her MBA at IMD. Her class of 62 students from 27 countries remains a network of friends and colleagues. Speaking five languages (she used to speak a sixth – Arabic – but lost it on her travels), Swersky is suited to today’s business environment. ‘Coming from a smaller country, you have to work with different cultures in order to survive because you simply don’t have a large home market,’ she remarks. ‘The business world is clearly becoming global, and the biomedical business is entirely global.’
Though drifting toward investment banking or management consulting during her studies, and with no experience with biotechnology, Swersky joined Ciba-Geigy in 1991 as the youngest member of Ciba’s worldwide management team and rose to be worldwide head of policy. She was also entrusted with overseeing some of the Swiss company’s burgeoning venture capital investments in California, and when Ciba moved toward the creation of Novartis, she made a graceful exit to become a partner at Sanderling, a Silicon Valley venture capital firm.
For several years Swersky made her home atop Russian Hill in San Francisco – at least for the short periods when she wasn’t on the road in the US, Europe or Asia looking for likely investments and advising companies Sanderling was already supporting. She became chairman of Discovery Therapeutics, a Richmond, Virginia firm Sanderling had invested in, and director of another biotech firm.
All the while, Israeli venture capital was growing up, and when Swersky felt the pull to return home, she found the biotech industry at a turning point.
Different world
Swersky points out that the US biomedical sector is over 20 years old and still growing, while the current trend is a shift to other parts of the world. Several hundred non-US biotech companies have sprung up, in part spawned by the opening of markets – both by the ability to list European companies on the US market, and the birth of new European markets such as Frankfurt’s Neuer Markt. First in the UK, then in Germany, biotech has ‘exploded’ across much of Europe.
Having been at ground zero for that explosion, Swersky turned her attention to Israel. ‘What’s happening here is even more amazing,’ she says. ‘This is a country that had no venture industry to speak of until 1992, but which has managed to raise close to $2 bn in venture capital in recent years.’
Israel’s venture capital industry started with a rare example of successful government intervention: a fund called Yozma (Hebrew for initiative) that invested up to $8 mn each in a number of venture funds. The condition was that the funds had to raise 60 percent of their capital abroad. That outside boost ensured their success, to the point that the initial venture funds have been able to raise second and, in some cases, third generation funds. The government pulled out and privatized the framework after about six years. Adds the returning ex-pat, ‘Today the industry is alive and kicking.’
Swersky found a ‘very, very different place’ when she returned to Israel after ten years abroad. Today it’s the second largest source of foreign companies on the US stock market after Canada – remarkable considering the size of the country and its population of only 6 mn. And if Israel was a US state, it would be number six in terms of venture capital, according to a study by Coopers & Lybrand.
Still, much of that first wave of venture money went to software and telecoms, while Israel’s biotech sector was ‘the poor relation, much slower to develop,’ Swersky says. One reason is that high-tech companies have been the beneficiaries of so much attention and skill from the Israeli military, while life sciences aren’t given the same priority. In early 1998, the Israeli government sought to remedy that, and asked Swersky to lead a new venture cap effort for biotech. ‘As it happened I didn’t feel that government intervention was needed at this point,’ she recalls. ‘But it opened my eyes to the entrepreneurial life sciences activity in Israel, and the tremendous opportunity there was to connect it with the industry in the US, Europe and Japan, making it part of the global industry.’
Israel is fertile ground for biotech: a high percentage of university graduates in the life sciences, the highest number of doctors per capita in the world – almost three times the number in the US – and over 40 percent of its PhDs in the life sciences. ‘There is tremendous opportunity in the technology and the knowledge base, and now we also have the end of the food chain: the investment funds to take the biomedical industry forward.’
Swersky perceives her niche to be between these two poles of science and investment: management, whether it’s R&D management, marketing or business development. She brings experience finding CEOs and directors and, perhaps most important, she can attract ‘knowledgeable investors who can help grow a company.’ And no wonder. Swersky’s enthusiasm for working with young, growing companies is infectious. ‘When you really get involved, you have a real personal contribution to creating something new,’ she describes. ‘For me, that is still the beauty of working with early-stage companies: going from idea to product to entity to treating patients and making a difference. There’s nothing like it.’
Virtual fund
The embodiment of this passion is Tel Aviv-based Columbine Capital. Swersky describes the firm as a ‘virtual fund’ that will work with a limited number of investors to seek venture capital opportunities. Having spent the beginning of 1999 acquainting herself with the Israeli market and working hands-on with a few companies, Swersky says Columbine is ready to begin the task of investing in early stage biotech companies.
Belying the reputation of venture capitalists, ‘I’m a sound believer in investing for the long haul,’ says Swersky. ‘Companies take a long time to mature in the life sciences – this isn’t the internet. At Sanderling we had the philosophy that you invest in very few companies, you go in early and provide all the assistance needed to free the entrepreneurs to get on with the science, and you stay and support the company for as long as it’s needed.’
That said, Swersky adds, ‘One of the important things in venture capital is not only to be able to provide the hands-on assistance, but also to know when the time is right to step back and become less actively involved. If a company is to succeed, it has to have its own infrastructure, and it can’t forever be relying on its board members for business development.’
She may step back at the right time, but it’s hard to imagine Swersky ever distancing herself entirely from the companies she invests in as a venture capitalist; she so clearly loves what she does: ‘Being involved with something that grows – something that wasn’t there yesterday and is there today – is a phenomenal experience. It’s a great kick.’
