Heather Sherwin is a rare creature, equally at home in the worlds of science and business.
Her job as fund manager of Bioventures, SA's only venture capital fund dedicated to biotechnology, combines these strengths and draws on her unusual qualifications, a PhD in cell biology and an MBA.
"SA doesn't lag behind the rest of the world in science or entrepreneurship," says Sherwin.
"The problem is putting the two together."
And that's exactly what Sherwin (37) does in investing the fund's R80m capital in biotechnology start-ups.
It's a tiny fund by world standards but the backers - Sanlam, Real Africa Holdings, the Industrial Development Corp and the US-based International Finance Corp , a member of the World Bank Group - are taking a chance on an industry that has yet to turn profitable, either locally or internationally.
In the US, only 5% of listed biotech companies were profitable last year. The industry made a combined loss of US$4,3bn off sales of $46,2bn. However, the market capitalisation was more than $340bn.
Sherwin helped set up Bioventures in 2001 for Gensec Bank while working at the bank as a strategist. Since then, the fund has invested R50m in seven start-ups, creating three from scratch and using its networks to help several obtain additional private equity funding.
"It's absolute seed funding," says Sherwin. "We saw there was a need since few venture capital and private equity funds in SA invest in start-ups; most invest at a later stage. Also, the funds are generally staffed by people without biotech know-how. Our advantage is understanding the technology side. That, and knowing whether an idea or innovation makes a business, is the skill."
Bioventures' first investment was in Shimoda Biotech, a company specialising in innovative systems that allow for more efficient delivery of pharmaceutical drugs within the body.
Its second investment was in Amandla Water, a company with a proprietary process using plants to extract heavy metals from waste water .
The third investment was in Disa Vascular, a company producing vascular stents that help re-establish the blood flow in patients with blocked arteries.
The common thread in the fund's investments is the presence of quality science backed by quality management. There is a lot of good science in SA backed by inexperienced management, says Sherwin. There is also a lot of science that isn't market-focused, that is driven by scientists' pursuit of knowledge for its own sake or by social objectives, like the quest for a cheap Aids vaccine. Finding the single gem among the rough that will translate into a commercially successful business is Sherwin's job. It is the life of a prospector.
None of the fund's start-ups is profitable yet. But then, says Sherwin, none has been liquidated either and in this industry that alone is an achievement. The fund, which takes an equity stake in all its investments, doesn't expect to see a return for at least the next three to five years, until the companies mature and stakes can be sold off.
"The biggest problem is that these companies burn cash and have little revenue to show for it," says Sherwin. "You have to have the stomach for it. It's a roller-coaster ride. The value of these companies lies in their intellectual property, not their sales ."
Sherwin says she is partly driven by the desire to grow SA's fledgling biotech industry, which, according to a survey published by the eGoli Bio Incubator, is made up of more than 100 companies which spend more than R300m combined on R&D each year.
"What's really cool is being at the forefront of an industry, watching it bear fruit and owning part of it," says Sherwin. "If we fail, it will hurt the industry. That's hell of a scary but it's also very exciting."
