17 Mar 2021
DPhil student is awarded Venture Capital Fellowship
The Included VC fellowship will provide DPhil student Dr. Alexey Youssef with skills and access into the world of Venture Capital
Dr. Alexey Youssef is a DPhil student and the first Syrian Rhodes Scholar working in Professor David Clifton’s Computational Health Informatics lab. He has been selected into a Venture Capital fellowship (Included VC) that aims to tackle diversity and inclusion in the Venture Capital world. We spoke to Alexey about this prestigious fellowship and how his engineering background will help him along the way.
Please tell us a bit about venture capital
Harvard Business Review makes a very interesting analogy about entrepreneurship and venture capital. It likens the entrepreneur to a modern-day cowboy, roaming new industrial frontiers much the same way that earlier Americans explored the West. At his side stands the venture capitalist who is ready to help the cowboy through all the tight spots—in exchange for a piece of the upside, of course.
Venture capitalism is an investment vehicle in which capital is invested in an early-stage company until it reaches sufficient maturity that it can be sold to a larger corporation or on the capital markets through an IPO. In the process, the venture capitalists (VCs) aim to multiply the value of their investments, by multiples that can go as high as 1000x in successful cases - as with Facebook’s early investor, Peter Thiel. In essence, a VC fund is a partnership in which VC partners raise money from limited partners (capital providers such as family offices, endowments, etc.) and deploy this capital in entrepreneurial ventures. A VC manages the money for a management fee, returns the profits to the limited partners, and typically keeps a 20% share of the profits.
That said, venture capitalism fills a critical funding gap: it funds the commercialisation of innovations developed through basic R&D. While basic R&D is usually funded through grants, VC money usually funds the translational part of the journey in which basic R&D innovations are translated into products. In that sense, it plays a key role as an engine of an economy that spurs innovations and economic growth. That is why countries around the world are trying to replicate the successes of Silicon Valley or the Boston life-sciences ecosystem.
How did you find out about Included VC?
Included VC was recommended to me by a friend and it seemed like a great fit given my interest in early-stage investing.
What does the fellowship include?
Included VC is a “unique fast-track MBA for venture capital”. It is the first of its kind 9-month global Fellowship for individuals from diverse communities that are often overlooked or excluded – its aims to provide access, opportunity and knowledge into the world of venture capital.
The fully-funded Fellowships comprise: masterclasses, mentoring, foundational learning,, simulation investment committees, and in-person (COVID dependant) retreats. During the Fellowship, we will have access to investors from successful funds such as Notion Capital (UK), Seedcamp (UK), Mangrove Capital (Luxemburg), Daphni (France), K Fund (Spain), M12 (Europe & USA), Wilson Sonsini (UK), HSBC Ventures (USA & UK), Creandum (Sweden & Germany), Mouro Capital (Spain & UK), and Enern (Czech Republic).
A core focus of the Fellowship is aiming to improve diversity within the Venture Capital industry. In the US, the profile of people who work in VC (70% white, 80% male, and 40% hail from just two elite academic institutions: Harvard & Stanford). In the UK, the profile is comparable (87% male and 75-80% are white). As a result of all the above, VC is generally homogenous and outliers rarely stand a chance. The lack of diversity among the investment ecosystem directly impacts the innovation that reaches the market, with confirmation bias creating a major disadvantage for new innovation from excluded communities.
The Fellowship aims to address the lack of diversity in the VC industry by identifying individuals who are entrepreneurial, passionate about technology, and fascinated by the potential for venture capital to drive change on a massive scale. Fellows demonstrate the broadest definition of diversity; gender, ethnicity, non-typical degrees, intergenerational diversity, disability, neural diversity, and include applicants from so-called excluded communities. Fellows comprise 25 nationalities and 21 countries; 52% of the cohort is female, +80% are from a BAME background, and +30% are neurodiverse.
What do you hope to gain from the experience?
Given my background, I want to devote a part of my career to investing in early-stage healthcare companies. Personally, I view early-stage funding as a great financial investment vehicle and an opportunity to make a real impact by supporting companies that are solving some of the most difficult problems in the healthcare sector. By doing so, capital is transformed into a tool that solves challenging clinical problems and brings value to patients.
Previously, I have had the opportunity to work across multiple healthcare areas: I did hands-on clinical work on the front lines in Syria during that country’s civil war; I worked on the digital transformation of healthcare systems with the World Health Organisation; and I have had the opportunity to work on cutting edge biotech and tech innovations with Entrepreneur First and Oxford University Innovation. These experiences allowed me to understand the “value gaps” in healthcare today and how new and innovative companies can create value and address these gaps. Therefore, healthcare VC is a great opportunity for me to couple my deep healthcare and biotech expertise with my interest in investments and making an impact on the healthcare industry.
I see Included VC as being a great opportunity to meet like-minded people, build a network in the European & global VC ecosystem, take part in improving diversity in VC while getting the chance to acquire a solid understanding of how the economics of VC and early-stage investments work.
How do you think your Engineering background and DPhil will help you with this programme?
I believe my experience as a DPhil student in Engineering Science is highly valuable because it teaches me two highly transferable and relevant skills: critical analysis and the ability to build a thesis around a specific industry “vertical”.
One of the most important skills that an investor should have is the ability to think critically and seek the truth, which usually means confronting biases and critically evaluating evidence. For example, when an investor evaluates an investment opportunity, they need to look beyond superficial information and unpack the details of the investment opportunity to identify the risk and the challenges. This requires the investor to be a critical thinker and a careful optimist; optimist in that they can see the future value of the company and careful in that they can look at the risk and challenges through an unbiased and critical lens. These skills one certainly learns as a DPhil student at Oxford, and especially in an entrepreneurial Department such as ours.
There is a common saying in science: “If you torture the data long enough, it will confess to anything”. This usually refers to the fact that if you analyse data with a preconceived bias in mind, you can always find results that support your hypothesis. This is true not only in science but also in commercial “due diligence”. Being embedded in the Oxford ecosystem means that I can work with top scientific minds in the world, and learn critical thinking and analysis from them.
Working in the CHI lab supervised by Professor David Clifton exposed me to a very entrepreneurial scientific culture. Many of the lab’s innovations are patented and implemented in healthcare systems. As a DPhil student in the lab, I identified a specific research “vertical” on which I want to focus my DPhil (in my case this was predictive healthcare tools and the generalisability of Clinical AI). Doing so meant that I needed to become an expert in this topic, mapping out the existing solutions in the space, identifying the challenges and problems to solve, and building a vision for the future of the vertical. Doing so would enable me to identify interesting and worthwhile problems to solve and inform my DPhil research plan. Being a VC is not so different! Every VC investor should have an investment thesis in a particular industry. This requires the VC investor to build expertise in a specific domain and understand the challenges and interesting investment opportunities. My DPhil has provided great training for that!