2012 Powerlist: Darren Carroll, Lilly Ventures

Darren Carroll has had a varied and two-part career at Lilly Ventures, the corporate venturing unit of US-based drugs company Eli Lilly, in which he has worked across multiple aspects of its business.

In his present role as vice-president of corporate business development at Eli Lilly, he oversees acquisitions, private equity deals, partnering and corporate venturing. He came to the role after five years at Lilly Ventures, where he helped develop multiple structures.

Carroll said he looked to make Lilly Ventures, which manages about $500m, more like the outside venture industry in terms of incentives and structure. He said: “If corporate venture capital groups are good at what they do they can get cherrypicked for talent by institutional VCs. I did not think it was appropriate for Lllly shareholders to be financing a feeder school for the VC industry.

“We would know if our investments generated good financial returns, and also if our investment professionals were attractive to institutional VCs. We have to provide a strategic return and have to be financially successful. We were prepared to take appropriate steps to attract and retain the people managing results, such as carried interest [a share of profit].”

He added: “We created a new fund, Lilly Asia Ventures, which is the only corporate life science VC in China. For four years, until late 2011, I spent one week of every month in China. The rest of the time was in my role as vice-president of ventures. I helped to create a new fund type, known internally as the mirror fund, working with external fund managers TVM and Healthcare Ventures.

These mirror funds use strategic and institutional capital to develop potential medicines to proof-of-concept stage, using very lean methods of development under the direction of the external VCs.”

In the early 2000s, Carroll worked developing new businesses for Lilly. He said: “One of the businesses I created and founded was Innocentive, which was the first open-innovation company in the physical sciences.”

Carroll’s background was as a lawyer, having previously worked at law firm Bond Schoeneck and King, and at Eli Lilly in the 1990s his brief included depression drug Prozac. He said: “Starting a career as a drug lawyer as the attorney for Prozac is like starting your education at the postdoctoral stage. It exposed me to nearly every critical aspect of regulation, sales and marketing in medicine.”

Lessons from the top: Carroll said: “For innovation in our industry, venture capital plays an essential role. The entire industry is under not evolutionary pressure but revolutionary pressure and we have seen a large number of institutional fund managers leave the field.

“I firmly believe corporate venture needs to play a new role because of this. It is essential that groups be very clear on several things, such as relative contribution of strategic versus financial returns, how the group is intended to interact with portfolio companies as well as how it will interact with other corporates and investors.”