Sep 2, 2021 · 1h 14m · capital-allocators
Jan Garfinkle – Arboretum Ventures (Manager Meetings, EP.09)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Manager Meetings, Roz Hewsenian of the Helmsley Charitable Trust interviews Jan Garfinkel, founder of Arboretum Ventures, exploring her journey from biomedical engineering to building a top-performing, capital-efficient healthcare venture firm in the Midwest.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 10.3% of the talking time here. How this is scored →
Ted as informed peer 3.5 Guest teaching 3.8 Guest disagreement 0.1 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:10:22 Jan Garfinkel confronting the Wharton admissions dean
Jan describes walking back into the dean's office after being rejected over GMAT math scores to forcefully defend her Cal engineering math credentials.
Hardest push from Ted ▶ 56:14 Roz Hewsenian demanding accountability on failed investmentsRoz deliberately pivots away from celebratory case studies to press Jan directly on deals that failed and what went wrong.
Biggest teaching moment ▶ 56:40 Jan Garfinkel breaking down CMS reimbursement vs FDA approvalJan details the distinct three-year regulatory gap between FDA clearance and CMS reimbursement that can instantly sink a capital-efficient device company.
Ted holds their own ▶ 9:09 Roz Hewsenian on rejection of identity victimization in executive careersRoz articulates a clear philosophical position on how she and Jan succeeded by viewing themselves as technical professionals rather than viewing obstacles through identity lenses.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Episode Overview and Capital Allocators University | 6 | 2 | 0 | 1 | Ted Seides and Roz Hewsenian have a highly collegiate discussion about Helmsley's LP allocation philosophy and why they backed Arboretum. Roz articulates Helmsley's unique Midwestern focus and position sizing requirements with significant domain competence. | |
| Jan Garfinkel's Education, P&G Process Engineering, and Wharton | 3 | 4 | 0 | 0 | Roz invites Jan to detail her formative career steps, prompting Jan to explain how she transitioned from biomedical engineering at UC Berkeley to running high-speed manufacturing shifts at Procter & Gamble. | |
| Early Medical Device Career at ACS and DVI | 3 | 4 | 0 | 0 | Jan recounts her operational experience launching angioplasty and atherectomy devices at ACS and DVI, walking Roz through the full product lifecycle from clinical PMA trials to acquisition by Eli Lilly. | |
| Moving to Michigan, Early Consulting, and Founding Arboretum | 3 | 4 | 0 | 0 | Jan describes her move to Michigan, consulting for Guidant's venture arm, and impulsively registering Arboretum on irs.gov after being turned down by local funds. The dynamic is conversational and reflective. | |
| Arboretum's Investment Thesis, Early Capital, and Midwest Advantage | 4 | 5 | 0 | 0 | Jan lays out Arboretum's foundational math: targeting $200M-$400M exits with high capital efficiency, boosted by an estimated 1x extra return due to lower Midwestern operating costs. | |
| Building the Arboretum Team and Recruiting Key Partners | 3 | 3 | 0 | 0 | Jan explains her staffing philosophy and how she recruited practicing physician Tom Shehab to lead healthcare diligence and proprietary deal sourcing. | |
| Sponsor Message: Ridgeline | 4 | 4 | 0 | 0 | After the sponsor read, Roz asks about internal business practices and fund discipline. Jan articulates why Arboretum caps fund size at $250M to maintain top-quartile performance rather than gathering assets for fee income. | |
| Exemplary Investments: NeuMoDx Diagnostics and nVision Medical | 3 | 4 | 0 | 0 | Jan provides case studies of home-run deals including NeuMoDx, detailing how their automated molecular diagnostic platform became essential during early COVID testing in Detroit. | |
| Navigating Regulatory and Reimbursement Headwinds with Sonitus | 3 | 5 | 1 | 0 | Jan educates Roz on the severe risks of medical reimbursement, using the write-off of Sonitus to explain why Medicare/CMS policy can kill a clinically superior device if an existing billing code does not exist. | |
| Leadership at NVCA and Policy Advocacy in Washington | 3 | 4 | 0 | 0 | Jan recounts her tenure chairing the NVCA during the onset of COVID, navigating PPP loan eligibility for venture-backed companies and lobbying Congress for regional venture ecosystems. | |
| Personal Reflections, Core Habits, and Life Lessons | 3 | 3 | 0 | 0 | Roz conducts the closing rapid-fire section, where Jan shares personal routines, zero-tolerance pet peeves for dishonest CEOs, and a story about forcefully challenging the Wharton admissions dean to get accepted. |
Statements from this episode (21)
Hewsenian: Viewing Career Obstacles Through Immutable Traits Drives Self-Victimization
“If you look at everything through the lens of some immutable characteristic, then you'll victimize yourself faster than anybody else will.”
Helmsley Charitable Trust Targets at Least 5% of Each VC Fund
“The way that we size our positions is we start out with how much is the GP raising? We want to be at least five percent of the fund. Sometimes that's not possible with a firm like Sequoia, but we want to be at least five percent of the fund. We want it to have…”
Garfinkel: Bioengineering Majors Are Now Approximately 55% Women
“It's more like 55% women, which is terrific, and when incoming college students now, a lot of them go into bioengineering, and many of them are women, which is fantastic.”
Garfinkel: Atherectomy Provided Better Long-Term Patient Outcomes Than Angioplasty
“The problem with angioplasty is that it would come back pretty quickly. If it's called re-stenosis, it re-blocks. With athrectomy, which was what this technology was called, it would shave it out and it wouldn't rebound so quickly. So it was better for patient…”
Garfinkel: Eli Lilly spun out eight device acquisitions into Guidant
“Eli Lilly decided to spin out these eight companies that they had ultimately bought into a new company through an IPO, and that was called Guidant. So Eli Lilly owned 20%. The New York Stock Exchange public markets owned 80%.”
Garfinkel: Michigan used $70M in tobacco money for healthcare startups
“So Michigan got seventy million dollars and they said, let's see if we can create a whole nother industry here. So they started what was called the Life Science Corridor, and they were giving grants and loans to a whole bunch of healthcare startups.”
Garfinkel: Rick Snyder shut down his VC fund to run for governor
“One of them, the senior gentleman wanted to become governor of our state, and he did, so he shut his fund down, and that was Rick Snyder. Governor of our state for two terms.”
Garfinkel: Many Healthcare Startup Exits Occur Between $200M and $400M
“In the world we live in, in healthcare, many of the exits are in the 200 to four hundred million dollar range.”
Garfinkel: Midwest Startups Cost 33% Less to Build, Adding 1x Return
“The beauty of being in the Midwest and focusing primarily on Midwestern companies is that it takes about a third less dollars to develop the company in the Midwest because salaries, rent, vendor costs, just all those things all combined. You basically get an a…”
Garfinkel: Hiring Pure Investment Bankers Did Not Work Well for Arboretum
“And when we've tried to bring in people that are just like bankers, that hasn't worked out nearly as well for us.”
Garfinkel: Venture Capital Skills Can Be Taught; Cultural Fit Cannot
“We feel we can teach anybody how to do venture, how we evaluate companies, how we help the board level. We can teach all of those things. We want to make sure they're a cultural fit from a personality standpoint and a work ethic.”
Garfinkel: Arboretum Will Probably Not Exceed a $250 Million Fund Size
“We probably won't go much bigger ever than two 50 because we find that that will be really hard to be successful because of the normal range of exits with our companies.”
Garfinkel: Pharma Adjacencies Capture Upside Without Binary Trial Failure Risk
“Pharma adjacencies, which is companies that play in the pharma space, but it's without a drug, so they have the same upside potential, because pharma has big upside potential, but without the binary risk that the drug would fail in phase three.”
Garfinkel: Arboretum Returns All LP Capital Before Taking Any Carry
“We return all the capital first to our investors, and then we get into the carry.”
Garfinkel: Arboretum Targets Investments That Cut Healthcare Costs by 20-30%
“We're trying to remove 20 to 30% of the cost of that procedure or of that technology with our investment.”
Garfinkel: Half of Arboretum's 15 Major Exits Were Within One Mile
“I think we've invested now in 50 or 55 companies. We've had about 20 exits, but 15 that were in sort of the five to 10 X range, and when you look at that, half of them are a mile from our office.”
Garfinkel: Device Reimbursement Path Adds up to $50M in Development Costs
“If we have to also go through the reimbursement path, it will add another up to fifty million dollars to that company's development and timeline, but cost to develop that product to get reimbursement approval.”
Garfinkel: Arboretum Lost $10M After Sonitus Failed to Get CMS Reimbursement
“And when we couldn't get reimbursement approval, it killed the company, so we had to shut it down. We lost ten million dollars.”
Garfinkel: Arboretum Prioritizes Medical Devices Fitting Existing Reimbursement Codes
“We tend to primarily invest in companies that already have a code exists, and it's just a new product in an existing code.”
Garfinkel: Congressman Wrote CMS Bill Following Sonitus Reimbursement Story
“I was meeting with a Republican congressman from Ohio and told him the Sonnetus experience I just shared with you about not getting reimbursement. He actually wrote a bill to try and get CMS to approve new technologies that would reduce the cost of health care…”