A Harvard man through and through (BA physics 1958, MBA 1960, doctorate in business administration 1966), Leo Guthart held leading positions at several national corporations before launching private equity fund Topspin Partners in 2000 – just in time for 9/11. With its trademark think-before-you-leap mantra, Topspin survived the Great Recession to become a key player in Long Island’s burgeoning innovation economy, including several joint investments with regional booster Accelerate Long Island through the Long Island Emerging Technologies Fund, fueled by Topspin and VC firm Jove Equity Partners. In Leo’s words:
POST 9/11: We didn’t invest heavily in that period. We knew things were difficult and it was clear you needed to be cautious at that point in time, so we were cautious. Topspin Partners was a large venture fund with a fair amount of latitude; we had a 10-year horizon and a six-year investment horizon. 9-11 was an event nobody had any control over. You just had to work your way through it. So we took it slow and hoped the economy would return. We didn’t go crazy, and we survived.
MAMARONECK: We’re headquartered in Roslyn and always have been. The only reason we have an office in Mamaroneck is some of the guys live up there and they didn’t want to commute.
DIFFERENT STROKES: Of course, the different funds have different purposes. The fund in Mamaroneck is a buyout fund that does private acquisitions of existing companies with existing sales and earnings. The work we do in Roslyn is more of a venture nature. The talents and orientations of the people up there are different. We’re all one big group, but they are completely separate funds, and not all of our investors invest in all of our funds.
SEVEN AND COUNTING: We like supporting Accelerate Long Island and we like investing with them through the LIETF. We believe the investments we’ve made with them are interesting and will drive the so-called innovation economy.
SMALL STEPS: These are relatively small investments. We watch companies and monitor them and invest in them when we see they’re getting somewhere. These aren’t multimillion-dollar deals; they’re small seed investments to try and get these companies going, so it’s not surprising that we would do 10 of them in a couple of years. And we’re going to continue doing them, and to provide the basis for follow-on [investments] if things go well. Seven or eight relatively small investments are not hard, compared to two large investments.
BIG PICTURE: While we intend to do more through the LIETF, we also plan to do more directly through Topspin. The ones directly through Topspin will start out larger. If we find something interesting through Cold Spring Harbor Laboratory or Hofstra Medical School or some of the other Long Island research institutions, and if they’ve come up with something significant, we’ll put more money into it.
HAVE VC, WILL TRAVEL: I don’t think we make geographic decisions; we make decisions based on the merits of what we see. We’re in a position to monitor everything going on in the United States, and sometimes we do hook up with people in San Francisco or Seattle or Dallas or Houston. We’ve done deals in those places. We’d prefer not to run all over the world looking for deals, but sometimes you have to.
DIFFERENCE MAKER: There’s the innovation economy across the United States and there’s the innovation economy in Long Island, and that’s a different thing, in our view. The size, the scope, the people involved.
There are investments you can make in companies that have already raised $75,000 or $100,000, and sometimes we do – one of our companies was sold to [Johnson & Johnson] for a billion dollars. We were only part of that investment, but it’s an example of the innovation-type deals we sometimes do off Long Island.
Here, you have Accelerate Long Island basically taking very small startups and trying to build them. We like that idea.
LAST, BEST HOPE? I can’t say the innovation economy is Long Island’s best hope, but it’s the one we’re the most interested in. We think biotech is a huge opportunity in our civilization. We’ve done large deals, midsized deals and small deals in biotech, and we think there are huge gains to be made with new drugs and new ideas.
SWEET SCIENCE: We’re not interested in social media. Let others do that. We like to invest in companies that provide what we consider to be value to people. I suppose you could argue that social media add value, but that’s not where our heads are focused. Our heads are focused on science. They’re focused on the excellent research institutions on Long Island.
Interview by GREGORY ZELLER