As we move our Monday meetings to a monthly basis, we are pleased to hear from John Backus, co-founder and managing general partner of New Atlantic Venture Partners located in both Reston, VA and Cambridge, MA. John is a seasoned technology investor, entrepreneur and policy advocate with more than 25 years of experience investing in and managing emerging, high-growth technology companies. Prior to forming New Atlantic Ventures in 2007, John spent nearly a decade as a general partner with Draper Atlantic.
Before his career as a venture capitalist, John was appointed as President and CEO of InteliData Technologies. He joined InteliData through the acquisition of US Order, a company he founded and led through a successful $65 million IPO in 1995. He currently serves on the board of directors of Qliance, Healthwarehouse.com, Koofers, AppTap, Ftrans and RemitPro. He is the past Chairman of the Wolf Trap Foundation Board of Directors, the past Chairman of the Northern Virginia Technology Council (NVTC), the founding Chairman and current Board member of the NVTC TechPAC, and was appointed by former Virginia Governor Mark Warner to co-chair the Virginia Research and Technology Advisory Commission, which he served on for 4 years. John began his career at Bain & Co. and Bain Capital, where he was the first Bain & Co. management consultant to take a full time operating role (as CFO) in a portfolio company. He received his BA in Economics and his MBA from Stanford University.
John Backus, Co-Founder and Managing General Partner, New Atlantic Venture Partners
Q. From which industry sector do you think we will see the most innovation in the next 2 years?
A. Healthcare services and delivery. Working from the National Capital Region, where politics permeates, I seem to have a front row seat watching legislators attempt to modify our country’s health policy. When there’s dramatic change like this, combined with our own personal frustrations with the system, it opens up big opportunities in the business side of healthcare. This is a $2.6 trillion dollar industry crying out for serious change.
The industry incumbents have set up a game and until now, no one challenged their process or pricing structure. Did you know that 40 percent of the cost for a primary care doctor to see you or treat you goes to cover the insurance bureaucracy? And, that companies routinely receive bills for prescription drugs from their pharmacy benefit managers every two weeks, and are required to pay them within 48 hours without reviewing them? And, you are almost always paying too much for generic drugs when you pay your co-pay and paying cash and not using insurance is almost always cheaper? Consumers and businesses are finding smarter ways around this and entrepreneurs who started companies like Qliance, Truveris and Healthwarehouse.com are changing the healthcare system forever.
Q. 2011 is the year ...
A. ...…that experimentation with the venture capital model - incubators, super-angel funds, mixed stage funds, seed funds inside traditional VC funds, pre-IPO funds, single purpose funds to invest in one company, private stock trading platforms - peaks - before most of these experiments crash and burn in the next few years.
Q. The biggest threat to the US venture capital industry is ...
A. …the unintended consequence of well-meaning legislation written in Washington DC.
Q. What is your favorite book of the last year?
A. Fall of Giants by Ken Follett. This is a fictional novel that shows how small things can lead to big conflicts around the world. It puts the Middle East uprisings in perspective. We live in a global economy and US companies need to pay attention to what is happening around the world in order to win big.
Q. Name a venture-backed company you are are not invested in but wish you were.
A. It is too easy to pick a big winner by looking through the rear view mirror. I would love to be an investor in Khan Academy, if it was a for profit company. Khan is turning the classroom upside down and has the potential to change our outrageously outdated education system (which I blogged about here).
Q. Name a practicing VC from another firm who you admire and why?
A. Peter Barris, the managing general partner at NEA. He steers one of the largest venture capital firms, which consistently delivers solid results, with companies that are reshaping the technology, healthcare and energy business.