Canaan Partners welcomes two new General Partners

The firm promoted Hrach Simonian and added Nina Kjellson from InterWest Partners

Financial trends and news by Steven Loeb
September 30, 2015
Short URL: http://vator.tv/n/4069

Diversity in the venture capital landscape can be hard to find. In the U.S., there are a total of 3,396. Of those only 164 of them are female. That is less than 5 percent. 

One firm that has been on the forefront of diversity is also one Silicon Valley's oldest firms: Canaan Partners, which has just gone ahead and added yet another woman to its ranks.

Canaan Partners announced on Wednesday that Nina Kjellson has joined the team as a General Partner. She will be based in the firm’s office in Menlo Park.

Kjellson has spent the last 13 years at InterWest Partners and before that at Bay City Capital and Oracle Partners, where her focus was on healthcare.

"I have known individuals at for a long time. I've known Stephen Bloch since my first deal back in 2002 or 2003, and I've known Wende Hutton for years. Canaan had co-invested in a lot of deals I did on the tech and healthcare side," she told me in an interview.

"I also knew the firm by reputation, and I thought of Canaan  as our cousins in the industy, in terms of strategy and history. Canaan is 40 years old while InterWest is 30 years old, both have a history of investing in healthcare and IT under same roof. Both are on their tenth fund, so there was a lot of familiarity and similarity."

Kjellson and Hutton had worked together on Labrys Biologics, a migraine drug company which was a co-investment with Interestwest and Canaan Partners. The company was acquired by Teva Pharmaceuticals last year.

So when InterWest, in the spring of this year, made a decision, after what Kjellson said was "much internal discussion," to split up its diversified fund, she "did a real soul search, about how and where I like to invest."

"I wanted a collaborative environment. I thrived on a diversified platform, one that draws upon insights of consumer markets. Because I liked diversified perspectives I decided not to go forward with InterWest to raise a separate healthcare fund," she said.

"Canaan was an incredibly lucky fit in terms of stage and culture. Canaan is distinctive, not just because they have a high performing fund and returns, they are setting the standard for how to build an organization and culture. It was very easy to say yes when I was invited."

In her role at Canaan, Kjellson will continue investing healthcare, specifically in biotech and and healthcare IT.

"With bio tech, despite fact that it is mature industry, there are still a huge amount of unmet medical need. There is the need for better drugs that aggressively treat areas that are currently being focused on, as well as new therapies for under served or neglected diseases," she said. 

"There has been an explosion in scientific discovery, thanks to smarter, sharper tools, and there is a tremendous amount of opportunity to do better by patients and by the healthcare industry."

As an investor, Kjellson said she is "interested in significant problems," and that she want to work on things that are "transformational not incremental."

"I want to see entrepreneurs who have a vision and can ideally tell and sell that vision. That is good for attracting other talent, investors, and partners. I want to see strong ideas that capture the imagination pof others."

With the addition of Kjellson  as GP, Canaan will go from the 8th most diverse VC firm in the country to the 3rd according to the National Venture Capital Association's report on diversity. The firm now has three female General Partners, and seven male General Partners.

Another General Partner

In addition to Kjellson, Canaan also announced another new General Partner, promoting Hrach Simonian, who has been a tenured investor at the firm. He will be investing in the firm’s Technology practice.

Simonian started at Canaan in 2007, where he "started all the way at bottom rung as an investment analyst," he told me in an interview. "I've held every title at the firm. I'm homegrown, and I made my career at Canaan. I have been mentored and brought up internally."

Prior to joining Canaan, Hrach was actually getting his PhD in electrical engineering when he decided to drop out and pursue a career in tech.

Prior to joining Canaan, Hrach was pHD in electrical engineering when he decided to drop out and pursue a career in tech.

"I was in college in 1999, and we were all thinking we'd graduate and start a company then retire by the time we were 24. The economic downturn changed a lot of things, so I sought some safe haven in grad school, but I had the itch to do build something," he said.

"One way to do that is to build a company. That is something I had always been interested in, but I lacked all business knowledge. I was an engineering and tech guy." 

So Simonian earned his MBA from the Stanford Graduate School of Business and then served as an Associate at Rutberg & Company. He also held several positions at Northrop Grumman and TRW.

"I was working with Canaan on a couple of deals and I got to know the team. Maha Ibrahim was my primary contact and midway through my banking career she asked if I would want to come over to Canaan. After that it has been been a swift eight and half year climb up the ranks."

Not much will change for Simonian in his new role, as he has spent the last three to five years leading deals and taking board seats, and that will continue.

"General Partner is about being involved in the management of the fund and future strategic moves," he said. "It means being involved with the internal management of the fund. This is ultimate goal of what I've been working for, and it hasn't been easy."

Hrach led Canaan’s investment in Instacart as well as the initial venture round in several marketplace deals where he serves on the board, including Cargomatic, CompStak, Realty Mogul and Washio. His interest, he said, is in on-demand and sharing economy companies.

"I look for spaces and themes and see what kind of trends are converging that gives rise for an opportunity that wasn't available before. Mobile is overplayed, but you can't discount that it is changing people's thoughts and behaviors," he told me.

"Lending Club, which is one of Canaan's portfolio companies, started doing peer to peer lending in 2007, and no one thought that people would lend thousands of dollars to strangers on the Internet. Over the years it is proving not to be crazy as education started permeating the entire system. People started lending cars and homes with Airbnb, and there has change in consumer behavior that we've been tracking."

One thing that Simonian told me that he particularly proud of is Canaan's diversity.

"One thing we pride ourselves on is having a diverse group of people. We have names that are hard to pronounce. We are over a third women, and in my office in Menlo Park there is a 50/50 ratio male to female. We are very diverse, we are  not a club of old white men. Better decisions come through diversity of opinions."

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