Global Corporate Venturing Rising Stars Awards 2017: #9 Joel Krikston

“Perhaps the least appreciated skill of the CVC is to network internally and build consensus for strategies and projects outside the core,” according to Joel Krikston, managing director of US-based drugs group Merck’s Global Health Innovation (GHI) Fund.

This is especially the case when trying to grapple with complicated private equity-style investments and roll-up strategies but it is one in which Merck has specialised after Joe Volpe’s GCV Rising Star 2016 award.

Krikston has been with Merck GHI since September 2013 and leads the group’s efforts both strategically and from a portfolio perspective with regards to value-based population health and care coordination.

He has completed five new venture deals in the care coordination space and executed on a large private equity deal for GHI in creating a joint venture with University of Pittsburgh Medical Centre (UPMC) and Krikston’s investment in MedCPU, a company that improves point-of-care delivery to hospitals through technology.

Bill Taranto, president of Merck’s GHI fund, said: “Joel’s contribution to GHI in such a short time has been extraordinary. He is a leader with a great vision about the future of healthcare. He is a rising star.”

Krikston said: “I am proud of several accomplishments in my relatively short tenure at Merck GHI. First and foremost, I have really enjoyed creating novel strategies from scratch with regards to population health and care coordination. One of the great things about GHI and Bill’s leadership is that as investors we have a blank slate to develop our own strategies. Creating these ecosystems and populating them with five portfolio companies in just three years has been a great experience.

“More specifically, I am very proud of what I have been able to do with regards to enabling an internally developed Merck startup called Ilum. Ilum is focused on combining a suite of solutions – clinical decision support, rapid diagnosis, real-time antibiograms [an antibiotic sensitivity test], predictive analytics – to help hospitals fight the epidemic of hospital-acquired infections.

“One of my first investments, MedCPU, has become a key foundational component of the Ilum offering and we are already in several pilots at hospitals across the country in a relatively short period of time.

“Moreover, we were able to attract UPMC as a development partner and investor in MedCPU, which really embodies one of my key philosophies in terms of finding highly capable and respected strategic partners to build businesses with.

“I am working on another transaction at present in the area of clinical mobility which will hopefully follow this precedent and give Merck another exciting entrée into a strategically relevant emerging business.

“My biggest challenges are likely the same ones that face most CVCs – the ability to drive adoption and buy-in around externally sourced innovation inside a large organisation.

“This is particularly relevant at Merck GHI where we truly exist to create new businesses altogether for Merck as opposed to simply being an extension of an operating unit’s business development group. I personally enjoy this challenge immensely as it really forces you to have a deep appreciation for your organisation’s mission and the myriad of strategies and initiatives that exist internally, while also possessing the insight and external network to identify and source those innovations that best serve those strategies.”

However, Krikston was thoughtful about how strategic and financial factors had to be balanced and what this might mean for his professional future given his background. Prior to joining Merck GHI, he spent spent years at healthcare peer Johnson & Johnson, evenly split between its corporate venturing unit, Johnson & Johnson Development Corporation, and working in a business development role supporting J&J’s diagnostic franchises.

Before joining J&J, he spent nine years as a commercial and investment banker covering healthcare at banks BNP Paribas, JPMorgan and ABN Amro, having graduated with honours from New York University’s Stern School of Business with an MBA in finance in 1999.

Krikston said: “CVCs could learn a lot from our partners in traditional VC with regards to quantitative analysis, portfolio company tracking and benchmarking.

“Having worked with some of the top standalone VCs in the industry, I constantly find myself learning from their quantitative approach to tracking company progress and applying metrics to the fundamental levers that will ultimately impact a company’s valuation, its prospects for exit and ultimate success.

“As CVCs, we sometimes become so immersed in the strategic relevance of what any given technology or company does, that we sometimes do not spend enough time on the financial rigour underlying our portfolio companies performance.

“I could see myself going down three potential roads. First, I would enjoy continuing to take on additional responsibilities here at Merck with regards to innovation, whether that was someday ascending to Bill’s role, or leading teams that take ownership for emerging businesses as they develop and begin to contribute in a meaningful way.

“Second, I have always been passionate about entrepreneurship. To that end, I could see myself starting my own business at some point and have in fact written no fewer than three business plans over the last five years with ideas for new companies that I think offer novel solutions to age-old challenges. Funnily enough, none of these ideas are in healthcare.

“Finally, I really like the very earliest stages of innovation and company formation. To that end, I could see myself having my own fund someday, which works with and funds entrepreneurs at the stage where ideas form into companies.”

But for now, he is happy as a CVC. Krikston said: “I have long been fascinated by the opportunity and challenge of driving innovation through large organisations. Marry that to a passion for entrepreneurship and strategy and you have someone who really enjoys trying to create new businesses inside of established companies.

“CVC is the pinnacle of corporate development, where one must combine a diverse set of skills to identify, source and develop external innovation that ties to internal strategic initiatives. The balance between delivering both strategic and financial returns is a challenge I really enjoy.”