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Game Changers

Jonathan Flint '73 and Terry McGuire '78 invest in high-risk ideas that change lives

by Mary K.LeClair and Catherine Williams

Jonathan Flint

Jonathan Flint '73

We tend to get excited about ideas that bring something entirely new to the market, ones that are disruptive," says Jonathan Flint '73. "We look for technologies or services that provide greater efficiencies or those that perform better for customers. We get excited about companies doing something compelling, about ideas that have a sustained competitive advantage. We want to bring something to the table that can't be copied the next day."

"It comes down to this," explains Terry McGuire '78. "Is the idea game changing? By investing in this idea, are we really going to change peoples' lives?"

Flint and McGuire are the founders of Polaris Venture Partners, a venture capital firm that specializes in nurturing big ideas into innovative products in the fields of technology and life sciences. They invest in seed, early stage and middle market companies, and currently have $3.5 billion under management with investments in more than 110 companies.

The scope of their influence is significant. Under their management, companies have created advances in pharmaceuticals and nanopharmaceuticals, developing drugs that bond to disease-causing proteins or ones that can be inhaled. They have backed the creation of medical devices that monitor health non-invasively through the skin as well as ones that improve surgery and recovery rates. They are behind major innovations in e-commerce, hybrid cloud file storage, mobile device technology, social networking and blogging.

Basically, if you've used the Internet, received a weather report, or been to the doctor, your life has likely been affected by the work of Flint and McGuire.

Since the two started Polaris in 1996, venture capitalism in the United States has doubled, today infusing between $25-30 billion each year in emerging businesses that offer immense potential with high risk. In order to become one of the leading venture capital firms in the nation, Flint and McGuire have had to become experts in evaluating business ideas and, more importantly, they say, experts in assessing people.

Terry McGuire

Terry McGuire '78

"I do think there is an ability in some people to be able to bring home an idea-it's hard to describe," McGuire says. "It's about identifying people with raw determination. It's not enough to be smart; you have to be clever. Every company will hit bumps in the road. A clever CEO will figure a way around that, or be able to abandon a product that just cannot succeed."

The two agree that their success as a firm is measured by their ability to select ideas that will be profitable to investors. That profitability, however, is almost always dependent on the personalities of the people behind the idea. "Good entrepreneurs aren't afraid to fail; they are risk takers," says Flint.

Flint and McGuire met while working for the venture capital firm Burr Egan Deleage. They both took a risk when they began their own company, which today has six senior partners and more than 30 employees.

Flint, who majored in English and history at Hobart, took a non-traditional path to his current career. After working in Hollywood with director John Landis, he was an investigator and researcher on the Nixon Impeachment Inquiry Staff of the House Judiciary Committee and then for the Watergate Special Prosecution Force. Flint attended the University of Virginia law school and was a litigator for Testa Hurwitz & Thibeault. When he landed an assignment representing Burr Egan Deleage, he became fascinated with the field.

"I saw the work of venture capital as collecting and identifying great people with exceptional talent and putting good teams together. I thought I would be good at that. I also knew that as a litigator, that I was good at due diligence... at investigating people, products and markets." But the field of venture capitalism was, as it is today, highly competitive. And Flint and his wife, Alice, had just had their first daughter. "But I knew this was the right career for me," says Flint. "I took a risk and offered to work for free for six months. I made Bill Egan an offer he couldn't refuse."

At Hobart, McGuire majored in physics and economics. After getting an engineering degree from Dartmouth, he began working for a small startup whose founders were looking for venture capital to propel their business. The business ultimately failed. "It was a good experience for me," McGuire explains. "I got exposure to venture capitalism and I got to see firsthand what the owners of a young business go through."

McGuire earned his MBA from Harvard where he was elected president of Harvard Business School's Venture Capital Club, of which every MBA candidate was a member. After graduation, McGuire was one of only three Harvard MBAs to land a job in the field, first with Golder Thoma & Cressey before moving on to Burr Egan Deleage.

Flint and McGuire say that the best thing that ever happened to them professionally was meeting at Burr Egan Deleage. "We complement one another very well," says Flint. "We are good partners with complementary strengths and weaknesses."

"I think it is fair to say I wouldn't have taken the entrepreneurial plunge without Jon," says McGuire. "This is a wonderful partnership. We continue to share a common vision of our firm's mission and purpose. An essential component of the mission is the belief that supporting the entrepreneur is one of the keys to a successful venture."

In an effort to generate more and better ideas, the two have created a series of "Dogpatch Labs," idea incubators designed to mentor new entrepreneurs as they launch their companies. There are now four Dogpatch offices in Cambridge, Mass., Palo Alto, Calif., New York City, and Dublin, Ireland. "It's a great way for us to encourage innovation and to see from the start which ideas and people might be ready for investment," says McGuire.

One of Polaris's companies recently completed successful clinical drug trials. The company's CEO contacted McGuire to share the good news. "The call wasn't centered on how much money we made," McGuire says. "The call was really about 'think how many lives we're going to touch; we're going to improve millions of lives.' And so I think the best entrepreneurs are driven by the fundamental nature of what they're doing. Advancing an idea, touching lives, and in the case of life science, saving lives. And if you do that right, the money part is a natural consequence."