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The Entrepreneur's Retreat - High-end folks tend to rely on small gatherings to find potential ventures for investments

Sep 30, 2014

Udayan Gupta – Wall Street Journal – Sept. 30, 2014 11:14 a.m. ET – She may just be 23, but Charvi Shetty found herself in the big leagues of venture capital early this year, attending the kind of event few people know exists, much less attend.

The biomedical engineer, who recently graduated from the University of California at Berkeley and the University of California at San Francisco, had recently interned at Genentech, the biotechnology giant. Now, she was hoping to drum up interest in a portable pediatric medical device she is developing, one that captures data on how the lungs of children with asthma are functioning. Her best opening: a spring gathering held by Artiman Ventures, a boutique venture-capital firm that quietly brings a group of 20-something innovators to meet a handful of rich investors from across the globe. "I wasn't sure what to expect," says Shetty.

It turns out high-end America has its own form of networking, and it's not quite the mass gathering of name-tag conferences or web-related meet-up groups. While many investors flood events loaded with gurus and self-described futurists to find the odd backer for an idea, a more select group of billionaires, serial entrepreneurs and high-level scientists gather at small events that receive no big billings or press attention. In this case, Artiman, which manages over a $1 billion in assets, draws an elite crowd each year from as far as China and India and as close as Palo Alto, Calif., for a series of small talks at local hotels. The invite-only affairs have only one goal: Create the right comfort zone for funding.

"We are never sure what will come out of all of this," says Dr. Akhil Saklecha, the Artiman partner who helped put together this year's retreat, which was attended by a reporter with the firm's permission. But as the participants dig into their bag of knowledge, "something magical always happens," he says.

The attendees for the four-day event aren't exactly household names, but their stories offer a window into how higher-end investments play out. Taiwanese scientist Ying Ying-Chih Chang and her partner, Atul Sharan, for one, share their experiences about developing a cancer diagnostic, whose technology comes out of Taiwan. The idea of screening billions of blood cells to find one cancerous cell began with Yuan T. Lee, Taiwan's first Nobel Prize winner, and to help him formulate a plan he asked Ying-Chih Chang, who is a scientist at Stanford University, to come back to Taipei. Once a plan came into shape, her challenge was finding someone who would invest in early diagnosis through a simple, noninvasive blood test, rather than building an app for optimizing costs of chemotherapy drugs—in Taiwan.

She ended up partnering up with Sharan, a successful serial entrepreneur and Artiman innovator, to form CellMax Life, a start-up with footprints in the U.S. and Taiwan. To conduct medical screenings, they went back to Taiwan's largest hospital—Chang Gung Memorial—which agreed to run the patient samples--at a fraction of what it would cost stateside. "Having a cross-border global footprint from birth has its challenges, but it also allows us to merge the best practices and cultures from Silicon Valley and Taiwan, and creates an important foothold in Asia," says Sharan.

Jianping Huang, head of the JPI Group and one of China's most successful entrepreneurs and investors, makes the case for working with China. But he also cautions entrepreneurs to be careful about selecting the right partners and the right opportunities.

"Everything in China is quantum-dynamic: all almost No. 1 in the world," says Huang. Still, it's no slam dunk. Pick your spots. And recognize the importance of learning to deal with the government, especially regional ones. Without the government's blessing, even the most promising ideas can be stillborn.

Ultimately, the highlight of an event like this is not the meetings, but a road trip of sorts to some nearby start-ups. The invitees will visit Aditazz, a San Bruno, Calif., start-up that is designing and fabricating small hospitals for Kaiser Permanente, the hospital chain. Aditazz, whose founding team includes high-tech designers, architects and planners, is using high-tech manufacturing techniques, specialty materials and reams of hospital-use data to design and fabricate small hospitals. Aditazz is not your traditional high-tech work space, it's more like a Hollywood lot —many rooms, confusingly so, where the entire hospital that Aditazz is designing is being fabricated. They also visit zSpace, a Sunnyvale, Calif., company that is working with virtual reality to teach science, technology, engineering, math and medicine.

Traveling with the group is Eugene Lee, born in Korea and himself a serial entrepreneur and investor. "Keep working on hard problems that matter, and park your WhatsApp envy at the door," he tells the young researchers.

As for Shetty, the young biomedical engineer? She ended up meeting with a group of Danish scientists who were working on similar projects, as well as the co-founder of another medical start-up. A full-scale meeting was planned, with hopes of some series funding or partnerships.

Originally published in the Wall Street Journal / Your Money – Sept. 30, 2014 11:14 a.m. ET

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