ExSight Ventures Investment Thesis

ExSight Investment Thesis

Tl;dr: Investment thesis of ExSight which invests in eyes.

To be honest, I’m adding this because it’s a weird one. I don’t even see that they have a fund, but they are active having done 8 deals and had one exit.

​ExSight’s Investment Thesis

​Drawing on our unique domain expertise and utilizing capital efficient techniques, ExSight invests in early-stage companies that are developing breakthrough technologies to aid, diagnose, and treat large populations of those afflicted with vision diseases.

Such domain expertise has been shown by ExSight partner Randolph Cohen and others to be a key factor associated with superior investment returns. Skeptics typically grant that such a specialized and concentrated approach will improve average returns but argue that the reduced risk associated with a generalist approach outweighs the return benefits of specialization. Diversification is indeed important, but Dr. Cohen and his colleagues respond with compelling evidence that diversification can and should be achieved by diversifying across managers, rather than across holdings within each manager. Thus, the ideal investment strategy consists of a diversified portfolio of focused managers each of whom possesses deep domain expertise. In our case expertise in ophthalmology provides an unfair advantage over generalists attempting to analyze and invest in eye care. Investment by our focused firm in an early-stage ophthalmology company becomes a de facto validation of the company’s technology.

By applying our exceptional depth of expertise in one particular area we can efficiently analyze early-stage risk. Close contacts with major innovators, scientists, leading academicians, and strategic partners maximize potential collaborations and partnerships for our portfolio companies. ExSight’s approach differentiates us from the mega funds that have come to dominate healthcare venture capital. We invest in pre-seed to Series B rounds where our investment can generate substantial value. Our capital, advice, and counsel will have outsized importance at this formative stage.

ExSight’s expertise and stage focus underpin an ability to invest in a capital efficient manner. Our specialization drives critical insights that may be missed by generalists, part-time investors, and even frequently utilized expert networks. With these insights we can help our portfolio companies’ focus their pre-clinical and clinical efforts efficiently. Capital efficiency is often critical in early-stage companies. The majority of any investment at this stage will go to technology development rather than staffing and sales and marketing. By investing predominantly in the technology our investment can drive exponential value creation.

The eye’s unique anatomic features make it an ideal proving ground for breakthrough technologies. The eye is easily accessible facilitating the testing of novel treatments. The eye is a self-contained organ; the side effects of ocular treatments on the rest of the body are limited. Sophisticated and widely available diagnostic tools provide rapid treatment feedback for testing new treatments. The retina is a model for the diagnosis and treatment of the central nervous system because it is part of the brain. The confluence of the eye’s features drives rapid progress in research and development of new treatments.

Powerful external factors are driving innovations in eye care. An aging global population, a global diabetic explosion, and an expanding global middle-class are macro trends ideally situated to the novel approach of emergent technologies. These trends will require new treatments and technologies to meet these demands. The need for innovation in eye care will only increase.

We are often faced with the question “Why VC for ophthalmology?” The eye care space has the necessary conditions for success in venture: there is a massive market, global trends are driving demand for better eye care, current standards are insufficient to meet demand, ophthalmology has a robust environment of innovative companies, and the eye’s unique anatomic characteristics make it an ideal proving ground for innovative technologies. Finally, our exceptional domain expertise, extensive relationships, and value proposition give us the broadest access to deals and make ExSight an ideal partner for the most promising companies.

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