The following is a conversation between Sean Doherty, the Chairman of the JDRF T1D Fund, and Denver Frederick, the Host of The Business of Giving.

Denver: In 2015, a group of JDRF volunteers, formerly known as the Juvenile Diabetes Research Foundation, observed that there was virtually no private investment in type 1 diabetes, which was causing a gap between scientific advancements and the delivery of solutions to the people who need them. Their solution: launch the JDRF T1D Fund, a venture philanthropy fund to create a market in T1D by using their capital and expertise to convince venture capital, biotech, and pharma to make the investments needed to cure type 1 diabetes. And here to tell us about how this work is going is Sean Doherty, the chairman of the T1D Fund.

Welcome to The Business of Giving, Sean.

Sean Doherty, the Chairman of the JDRF T1D Fund

Sean: Thank you, Denver. I appreciate it, and I’m pleased to be on with you.

Denver: What brought you to this work, Sean, and how did you first get involved with JDRF?

Sean: What brought me to JDRF is what brings many people to JDRF, and that’s the diagnosis of a loved one. My son, Finn, was diagnosed with type 1 diabetes when he was just two years old, about two weeks after his second birthday back in 2002. My wife and I almost immediately became volunteers for the organization, which has great chapters all across the country and affiliates around the world. It’s a great community support system. And so I worked pretty heavily with JDRF in a bunch of capacities locally, around here in Boston– galas, walks, that kind of stuff, and in leadership around there. My wife was very, very active in helping new moms of kids with type 1 because it’s pretty daunting when it happens. Until about 2015, I started talking with some folks about starting the T1D Fund.

Denver: Yeah. I don’t think you can fully really appreciate type 1 diabetes until you have someone, a loved one, who has had it. Tell us what their lives are like and what it’s  like to live with this disease.

Sean: So type 1 is an autoimmune disease. It’s actually the fourth or fifth most prevalent autoimmune disease in the United States, which was one of the things that people didn’t know about, including today in the investment community. It strikes very suddenly. It strikes otherwise healthy people who happen to have some auto-antibodies that lead to an autoimmune reaction, where the body basically attacks so-called beta cells within the pancreas. 

Beta cells produce insulin that are really just an amazing part of the human body. When you look at a bagel, your body starts thinking about producing insulin and it maintains your blood sugar at a stable level. It helps you to metabolize blood sugar. It actually causes metabolism of blood sugar that keeps your energy going. When someone is diagnosed with late-stage type 1 diabetes, their beta cells are being destroyed by their own body, so they don’t have the ability to make insulin anymore. And they have to essentially go on artificial insulin in order to live.  Insulin therapy has been around now for about a hundred years… and thank God… because otherwise, type 1 diabetes would be a death sentence.

But people who live with type 1 diabetes have to administer artificial insulin to themselves 24 hours a day, seven days a week, with no vacation, at all times. They can eat just about anything they want, but they have to pay attention to the number of carbohydrates that are in there. Blood sugar is influenced by everything. It’s influenced by adrenaline, by illness, not to mention just food and the ingestion of carbohydrates. So it’s a constant mental strain on the patients with this and on their families. And we have to get better than insulin therapy for these people.

Denver: Yeah, you said it can come upon an individual suddenly. Do we know what instigates it?

Sean: There are a lot of theories around it, theories particularly around particular viruses that may trigger the body to essentially turn against itself. That’s one of the great areas of scientific discovery. We have pretty strong conviction that there has to be both a genetic element to it and an environmental trigger that comes from the outside. And when those two things cross, there’s a quick diagnosis. It’s actually diagnosed across all age groups. People assume that this just happens to kids, but type 1 diabetes, the autoimmune version, which is quite distinct from type 2. Type 2 is not an autoimmune disease. That develops for different reasons metabolically. But 50% of people diagnosed with type 1 diabetes in America are over the age of 20. And sometimes with adult diagnoses, it takes a little longer. Our son deteriorated pretty quickly, and he went from being someone who was pronounced perfect at the second well visit, second birthday well visit, and just a few weeks later, was in the emergency room at Boston Children’s Hospital.

Denver: Share with us a little bit about the history of the T1D Fund and why it was formed in the first place.

Sean: Well, you stated it pretty well at the outset. A group of us associated with JDRF across the country had an idea that essentially was seeded by a guy named John Brady, who was the chair of the international board of JDRF at the time back in 2015. And he came to me with the general idea around this, and together with a colleague of mine at Bain Capital named Colin Motley, who has type 1 diabetes, we started looking into the market, just digging into the prospects of: Oh, what could we do with something like this?

And what we discovered was really pretty amazing in a bad way, which was that while there was terrific science, really good philanthropic work from JDRF and Helmsley Charitable Trust, pretty good government support from not just the US government, but the Australian government, Canadian government, UK government, and others.  And on the other side, there was actually pretty good health insurance support and pharmaceutical support, but focused on insulin and treatments.

In the middle what we found, in this really complex and interesting ecosystem that is life sciences, is that the risk takers, the binary risk takers in the ecosystem, who are the life sciences venture capitalists, were not participating at all.

And if that’s absent, we started to hypothesize and we learned through diligence, the pharmaceutical companies were going to be less interested to come in. The pharma companies actually rely on big risk-taking happening in the life sciences venture capital space to test out a lot of these ideas to say, “Okay, that can be really great science, but is it investible science that you can actually convert into a commercial product that can change people’s lives?” In our case, we call it a disease-modifying therapy, or a cure.

So our hypothesis was, in the absence of a robust life sciences venture capital community and investment by that community, we weren’t ever going to get anywhere. This was a billions of biz, a billions of dollar problem. Philanthropy in the traditional way doesn’t deal in billions of dollar problems, with the exception of very few large-scale foundations. Generally, you’re dealing with hundreds of thousands and $10 million problems.

So we thought: What if we formed a venture capital fund? We were going to make it philanthropic for reasons I’ll describe in a moment, but with an express goal of addressing this billions of dollar problem by starting to catalyze the venture capital community, and do it by putting our money where our mouth was, but most importantly, educating this community, debunking some key myths about type 1 diabetes.

And in order to do that, we needed to do it philanthropically because what we had to offer and still offer every single day to the venture capital and now the pharma community, is an extraordinary network and well of knowledge. We’d like to say to our venture partners, we are quite literally one, two, or three phone calls away from anyone on planet earth. We know something important about this disease.

If you’re in an uninvested market, like this one was, and you’re a venture capitalist who’s thinking of going into type 1 diabetes, which is 20 million people around the world have this disease, 1.6 to 1.8 million of those in the United States. So this is not a small market.

Denver: Not at all.

Sean: But they’re not in it yet. The value to them of that kind of diligence, support and in our theory, co-investment from us, we figured that we’d be able to attract at least $5 of venture capital money for every dollar that we put in. The answer over the last five and a half years is much closer to $10 alongside us for every dollar that we’ve put in.

Denver: You just mentioned a moment ago, we needed to educate them about some of the myths around this disease, type 1 diabetes. What would some of those myths be?

Sean: There were three and, in some sectors, I think they remain persistent. The first is an obvious one, and I bet a lot of your listeners even have it today sitting here, which is a lot of confusion between type 1 and type 2 diabetes.

When people in the popular press or on TV, or the many, many ads for type 2 therapies, they will talk about diabetes. And so there was an assumption that, all right, type 2, that’s the big market. We’ve heard about type one, but that’s not that many people. If you just look at diabetes as a sector, type 1 is far less than 10% of all people who have it. 

That leads to sort of the second myth, people have this assumption that type 1 diabetes is juvenile diabetes. What used to be considered the old name of it before we discovered that half the people diagnosed with this disease are over the age of 20; 85% of the people who live with this disease are adults, who live with it right now. So the second myth was  that this was juvenile.

Why is that important here? If you’re an investor in life sciences, in early-stage life sciences, and you hear juvenile, that sounds expensive, difficult, dangerous; the FDA doesn’t love it. It’s not the first place you want to put your money. So we had to debunk the myth. Number one, that type 1 and type 2 are very, very different diseases. Type 1 has more in common with autoimmune diseases like multiple sclerosis, and rheumatoid arthritis, and lupus, and celiac than it actually does with type 2 diabetes. So we had to debunk that myth. We had to debunk the myth that no, this is actually not a juvenile condition. This is an autoimmune disease that actually spans all age groups.

And then the third myth, insulin is not a cure. Insulin is a way in which we are treating the core symptom of either kind of diabetes, which is high blood sugar. We have been relying on a 100-year-old standard of care that treats a symptom. We are not treating right now the root cause of it.

So you take those three myths and explain them to people and then show them the economic opportunity. We think this is like $30 billion a year economic opportunity affecting 20 million people around the world with an untold number of tens of millions who are in the process of developing this disease and don’t even know it right now. Then you start to have people seeing dollar signs. They start to see there is an opportunity here to change lives, and in the process, find good investment opportunities.

Denver: So interesting when you frame something correctly, and I’m going to digress here for a moment, Sean, if I may– this probably could be for a separate podcast– but why is insulin so damn expensive?

Sean: That is a much bigger topic, that there are other people that are far more qualified to speak to than I, but I think it is a really important topic for you to cover. It is a daily tragedy in the life of many people with this disease when the list price of one vial of insulin that might only last you a week or 10 days, runs into the hundreds of dollars, and when you hear stories of young adults that have this disease rationing their insulin…remember, this is life support for them. This is how they deal with the control of their blood sugar.

And particularly in the early years, the early months of the year when you’re dealing with a high deductible on  your healthcare plan, people are paying for this out of pocket. And there are a lot of people working on this, JDRF among them. There are people interested in it in Congress. It gets a lot of attention. I’m not one of the people focused on that so I won’t speak to it, other than to say: it is a problem that must be addressed.

“I think of this as an impact investing fund. The reason we are in this game, the reason that we formed this fund was for a specific impact, obviously a long-term impact of curing type 1 diabetes, but we got very, very narrow and focused on what our specific philanthropic role was going to be– which is we could play a role in lighting a match to catalyze, accelerate, and guide life sciences market in type 1 diabetes cures and with a specific effort for that. So that’s the impact that we were seeking.”

Denver: Let’s speak a little bit about this venture philanthropy model because I am absolutely fascinated by it. So speak about it a little bit more: who invests in this? What your pitch is like to them?  Give me a little bit of that pitch and how that whole thing works because it’s a combination between a philanthropic capital and impact investing. It’s one of the more interesting hybrids I’ve ever encountered. So walk us through it a little.

Sean: I think embedded in your question is really how I think about it. I think of this as an impact investing fund. The reason we are in this game, the reason that we formed this fund was for a specific impact, obviously a long-term impact of curing type 1 diabetes, but we got very, very narrow and focused on what our specific philanthropic role was going to be– which is we could play a role in lighting a match to catalyze, accelerate, and guide life sciences market in type 1 diabetes cures and with a specific effort for that. So that’s the impact that we were seeking.

Our method of capital formation was not going to be for-profit, like a lot of the social impact funds that you see. Instead, because of the reasons I described before, because the value that we’re bringing to the market, the reason that our dollar is more valuable than the next person’s dollar, is that we come with all of this expertise from JDRF, Helmsley Charitable Trust,… leaders all around the world. Because of that, our method of capital formation needed to be philanthropic.

So I actually think of this as on  a spectrum. You have sort of pure financial investing on one end of the spectrum and pure philanthropy all the way on the other end. If you step along that, of an impact investing fund, it will have financial metrics and social metrics; we are one notch over toward philanthropy from that because we chose a philanthropic method to do it.

And you asked about the pitch. In the early days when we were just starting this, we did business planning the last half of 2015 throughout 2016 and launched just after Thanksgiving of 2016. Among the things in my worry closet at the time: Would we actually be able to convince people to perform an extremely non- intuitive act, which is: ask them to give away their money to a vehicle which had the expressed intention of making money alongside other people? Please give us your money so that we can make money off of it, turn this into an evergreen fund, and you will never see your capital again. So we’re asking people to perform a non-intuitive act.

So the method of fundraising for it was really no different than things that I’ve been describing here. That right now, we’re looking at a nonexistent market. The only material, cure-oriented T1D venture round when we had launched was a Series A round in a company called Semma Therapeutics. It was a little bit more than $40 million. They did a subsequent Series B later that we participated in. Vertex bought it a couple of years ago for nearly a billion dollars, which was great.

But that was it. That was the only thing until these donors–  100% of whom, by the way– we have a little bit more than a hundred donors– every single one of them is directly affected by this disease and say, “This is a way that a group of us together, partners in this effort of families affected by this fund can, with a pretty sophisticated effort, focus our philanthropic dollars on a very targeted problem that we think can prime the pump, grease the skids, however you want to say it, and correct what we saw as a market failure.

A lot of people don’t believe in market failures. I’m not sure if I do or not. We saw a market abnormality that we thought we could use targeted philanthropy to correct. And so once we got over the hurdle of saying, “Listen, this wouldn’t work as a for-profit fund.” Number one, it’s a silly for-profit fund because nobody’s even investing in this space. It’s hyper-concentrated. No one’s ever made any money on it because it’s hyper-concentrated, and we wouldn’t be valuable. The reason we’re valuable is our access to the philanthropic asset of JDRF scientists, Helmsley Charitable Trust, and the others.

And so once you walked people through that, they got it. And I think our early donors, even to the donors that have just given to us as recently as a few weeks ago, I think are very excited to be a part of a very small group that took a pretty disruptive risk that seems to be working. I’m not going to say that it’s worked yet; we have a lot of work to do, but it’s working.

Denver: Well, you’ve created the market. You’ve gotten the investors. Maybe you don’t have the science just yet, but that science usually takes 6, 10, 12 years. It doesn’t happen overnight. So let me just make sure I have this right, Sean. These are essentially impact investors who’ve put their money up looking for both that scientific and social return and that economic return, except in this case, the economic return that they would realize is going to go right back into the fund.

Sean: That’s right. And so our donors are families. Some are larger. The Helmsley Charitable Trust is the largest donor we have outside of JDRF. So JDRF seeded us with $32 million out of the gate. So we’re a wholly owned subsidiary of JDRF, operated separately. We have our own board, investment team that’s full-time on staff, these really talented life sciences investors working for us. JDRF seeded us; the Charitable Trust gave us about $10 million, and the rest of our donors are our people or individual families directly affected by the disease.

But yes, you described it right. Instead of the return going back to them, which we cannot do because we had to operate as a philanthropy, they could see their dollars leveraged multiple times. One, it’s the express purpose of this fund that we were going to attract at least $5, that was our target… At least $5 of life sciences venture capital money alongside us in syndicates that are investing in these companies. As I said before, the answer to that has ended up more like 10 to one.

Then when there’s any returns from those investments, those go right back into the body of the fund to be reinvested. So we’ve invested, just put dollars on this. We’ve invested about $70 million so far. And in a relatively young fund, we’ve already returned $55 million of capital and profits that goes right back in again to the fund to allow us to continue to invest.

Denver: How are you able to get this venture capital to come alongside you? Because again, if you take a look at most impact investing, and you’ve just said you’ve had some returns, but most impact investing in the classic sense, you get that philanthropic first capital to show proof of concept. And once you’ve shown the proof of concept, then the pension funds and everybody comes in to do it.

I mean, essentially what you’ve been able to do here is get the philanthropic capital, a little bit different than the normal impact investor, but there isn’t that much of a proof of concept yet because again, the returns from the science hasn’t come to light fully; yet you’ve been able to get 10 bucks from the venture capital community. Tell me how you were able to manage that.

Sean: In some sense, impact investing is an overused phrase. I think almost everybody that’s a life sciences venture capitalist, is an impact investor. They’re improving people’s lives every day. This group, and the reason that they are so essential, invest in early, unproven science. They’re the ones that are taking it, in a company like Semma for example, taking amazing scientific work out of the Harvard Stem Cell Institute and Dr. Melton, and as they would describe it, moving down Mass Ave from Harvard, down to Kendall Square. And instead of continuing to do scientific work on it, figuring out if they can replicate the same science over and over again so it can be turned into a product.

This is what life sciences VCs do for a living every day. They’re investing in science that is, by definition, not proven yet but shows great promise. And they think that it can be investible and they’re taking a big bet on it. Our problem was they weren’t betting at all.

Denver: I know, they were sitting on the sidelines, yeah.

Sean: So we didn’t really need to prove a concept that you’d show that you could take a drug all the way to market first. They actually want to participate in that. They are looking for interesting opportunities where they can understand the risk. And so how did we do that? We did it in a few ways. There weren’t very many companies that are T1D-only concepts. We came up and our investment staff, which at the time was led by a guy named Jon Behr, came up with a really interesting approach that I think when we look back, assuming that we really do get to the success we want, when we look back, I think this is going to be the great innovation of the T1D Fund.

There was an awful lot of overlap among autoimmune diseases in different genetic triggers or mechanisms of how they develop over time. And there’s even some overlap between things like immuno-oncology and immunology and in autoimmune diseases. And one concept that we had pretty early on when we realized there weren’t that many T1D-only companies, what if we approach companies that were looking at other indications, generally other autoimmune diseases, where we recognize the science! Because of all the great scientific work that JDRF and Helmsley have been doing over the years, we recognize the science and approach them at the management level, not at the venture capital level, but at the management level.

Denver: Oh, yeah. C-suite.

Sean: Yes, at the C-suite level. And they’re sophisticated. They understand this stuff and say, “What would you think about applying your science in type 1 diabetes, and add it as a second or a third indication?” That came with some risk to us because most of the time, T1D wasn’t going to be T1D first. But the advantage to us is that you have well-capitalized companies with great C-suites and name brand prominent life sciences venture capitalists behind them.

And we immediately got allies in the C-suite who then turned around and did the initial work in talking to the venture capitalists and say, “Hey, look, we can actually expand the portfolio,” of what they would think of as a platform technology or multi-indication company and say, “What would you think of us adding T1D?” This T1D Fund we’ll put some capital in. They’ll put people on the program advisory committee that helps to guide the development of that science and movement toward clinical trials. And sure enough, that alliance started working out, and from there, venture capital started paying attention to it.

We had a couple of venture capital firms that had never invested in type 1, and now one of them actually has four companies that have T1D programs because they start to see the opportunity as it builds out. So we, in that way, leveraged all of the learnings from the other autoimmune diseases that are also being addressed by these companies, getting the power of their balance sheets which were typically pretty strong, which was definitely also not a thing in type 1 diabetes at that point. With really high talent management teams, the impact of that, I think, has been really compounding. And in some cases, there are scientific efforts happening in early-stage companies that we haven’t even done as a foundation yet, and things like CAR T and others.

Denver: Yeah. That’s really interesting. And it almost sounds… maybe I’m wrong about this… that you adapted your funding strategy from the very beginning and how it turned out. And you know what, I heard you say there, Sean, reminds me a little bit of a nonprofit organization going to a foundation and you’re trying to find a match. And these life science companies, you were trying to find a match of someone who was already in this business, but just for another disease. So what you’re asking them to do is lay another line down as opposed to somebody completely taking that leap across the canyon to say, “Let’s begin to do this.”  Would that be right?

Sean: I think that’s fair. There was one company that followed that model. We had already invested alongside the venture capital firm and one of their companies was also looking at an immuno-oncology therapy. And we got introduced by that venture, that same venture fund, Polaris, to a company called Pandion. Pandion was working on tissue-targeted immunotherapies. They were not focused on type 1 diabetes.

In our first meetings with the C-suite of that company, one of them said, I’m not exaggerating, ” We always thought that what we were doing could work in type 1 diabetes, but no one was willing to finance it.” So that’s at the same time tragic and really a proof of our concept that this was a pretty good idea,…. so we’ll finance it, and we will put our scientists on our project advisory committee to drive it forward. And they’ve had great success; that company went public, and was ultimately purchased by Merck.

“So we’re really starting to see a sea change where I think people do see the opportunity. They do see that insulin is not a cure for this disease, that this is a disease with a dramatic, unmet burden. And because of that dramatic, unmet burden, there’s also a significant economic opportunity for them.”

Denver: Yeah. As much as anything, you brought attention to it. You start to do this fund, and all of a sudden people begin to turn their heads and say, “What’s going on over there?” And that’s a big piece of getting people’s attention.

Sean: That’s right. And look, timing is important, too. Over the last five years, the inflows into life sciences companies are unprecedented. We’re obviously in quite a large correction right now in the life sciences market, but the capital inflows have been unbelievable. And so we benefited from that.

I would say the flip side to that is, gosh, imagine if we hadn’t created the T1D Fund in 2015 and 2016, and our indication had missed that, had missed that uplift. What’s happened now over the course of the last, I’d say probably the last 12 to 18 months, we’re finding ourselves in a position where we’re not having to convince as much and find our way into some of these platform technology companies.

We’re finding some really interesting life sciences VCs, who have great ideas about how to apply particular scientific approaches to type 1 diabetes, approaching us about it because they view it as really important to have us as a part of the syndicate for all the reasons that we’ve talked about over the last few minutes.

So we’re really starting to see a sea change where I think people do see the opportunity. They do see that insulin is not a cure for this disease, that this is a disease with a dramatic, unmet burden. And because of that dramatic, unmet burden, there’s also a significant economic opportunity for them.

And look, philanthropy sometimes struggles with that, like: How do we talk about the fact that people can make a lot of money out of this? Shouldn’t people just be doing the right thing? We’re trying to cure a disease here. This is a billions of dollar problem. The only people in the end who will cure this disease are large pharmaceutical companies.

“We started with a core hypothesis that this market, which didn’t exist, could exist, and it had to exist or we were not going to cure the disease. It was literally that binary to us. And so you look at yourself in the mirror and say, “If we don’t do this, no one is going to do it. So let’s go at it with this hypothesis of : you could set up a venture philanthropy fund and be a partner to these folks and convince them. Our job is to convince. Our job is to debunk these myths. Our job is to demonstrate to them what the investment case is. And we’re going to need to adjust this as we go,” and we did.

Denver: Absolutely. And philanthropy can be an instigator to get the whole thing on track, but it’s never going to be able to do it by itself. It’s going to take billions, and philanthropy doesn’t have that kind of money.

Hey, looking back, let’s say seven years now, would you have done anything differently when you launched this venture philanthropy fund?

Sean: Absolutely not. I would have done it exactly…

Denver: I knew that was the case. I only had allowed 10 seconds for that answer.

Sean: Let’s see. I think that we probably could have raised more money more quickly. We were careful about it because we did view all of our donors out of the gate as our partners in this. Every single one of them, as I said, was directly affected by type 1. When we started raising money, we thought it was a tactical thing that we’re getting a lot more reception from people directly affected by the disease.

It’s  a relatively high minimum, by the way; half a million dollars is the minimum for anyone to come in over a four-year period. That was on purpose because we wanted to raise as much money from as few people as possible. And we thought in order to raise that kind of money we would need to… they come under confidentiality agreement because they want to see where their money is going. We show them where all of the money is going. It’s full, complete…

Denver: Transparency.

Sean: They get quarterly letters. There is an open mic Zoom every quarter with the two managing directors of the fund that is done under a confidentiality arrangement so they talk actively about the investments. But these people thought because they were, they’ve thought of themselves as owners, as the partners in this.

And when we were building the airplane in the sky in the early years, we never wanted to raise so much that it would seem inefficient for them. And I think we probably could have raised more and more quickly. But otherwise, I think to the extent we’ve made mistakes or things that we would have done differently, I think that it was really well-managed by a group of volunteers who were really committed to it, and were very realistic about the fact that we were making this up as we went along.

We started with a core hypothesis that this market, which didn’t exist, could exist, and it had to exist or we were not going to cure the disease. It was literally that binary to us. And so you look at yourself in the mirror and say, “If we don’t do this, no one is going to do it. So let’s go at it with this hypothesis of: you could set up a venture philanthropy fund and be a partner to these folks and convince them. Our job is to convince. Our job is to debunk these myths. Our job is to demonstrate to them what the investment case is. And we’re going to need to adjust this as we go,” and we did.

In the early years, the early year and a half, two years, we made several investments in what we refer to as improving lives that are kind of novel insulins or some device-type, things like that. We decided not to anymore. At the beginning, we were investing across type 1 diabetes. We decided not to after about a year and a half or two years. Why? Because industry was all over it. Industry already is very big into devices, which by the way have changed people’s lives; the three huge manufacturers of insulin that are looking at that sort of stuff.

We wanted to look at a market that didn’t exist yet where we could leverage our dollars and make a real difference. We didn’t get into this to play along and say, “Oh, well, if we invest in that kind of device thing, it might be great because we could make some money off it.” That’s not the point of the T1D Fund. The point of the T1D Fund was to catalyze, accelerate, and guide a cure market in this disease so that we could ultimately get to the billions of dollars that we will need in order to cure it.

Denver: I know that you are absolutely laser-focused on T1D, but let me ask you a question along these lines, and that is, this concept, this venture philanthropy model that you’ve created, what impact do you think that might have on the philanthropic sector for other types of organizations, whether they’re involved in life sciences, or they’re involved or engaged in some other kind of work?

Sean: That’s a great question. I want to answer it maybe in two ways. The first with respect to disease specifically, and we do get calls a lot from other disease foundations about how to do this. I think a lot of them think of it as a really great way to raise money, which it has been, but the reason it was really a great way to raise money is because there was a narrowly focused need and addressable purpose to this. And so we were in a particular place in type 1 diabetes that I’ve described earlier in this call that not every disease is.

And so I think what my advice always is in setting up anything like this, define exactly; think of it as a balance sheet. What are the assets that you have against the problems that you face, and what’s the vehicle that you can best use philanthropy to do it? Which sort of leads to what I think is the second half of my question.

What we’ve discovered, I think, through the T1D Fund is that families and foundations are looking for unique and disruptive ways to impact the world with their philanthropy, and the people that have made this kind of money or put it into their family foundations or donor-advised funds or whatever it is, are very intrigued and many cases insist on the same kind of metrics and operational diligence and transparency that they had in their professional lives and their money-making lives.

And so if you have a real thesis, a problem that exists and a way that you think you can solve it, and you’re transparent about them with people, and you thoughtfully target the people that might be interested in making this kind of impact, the money is there with those ideas. And if you include them in that, the amount of impact, in my opinion, that a relatively small amount of capital can make is extraordinary.

And I think that there are, humbly I’d say, I think there are really great lessons for how to disrupt a traditional philanthropic model and see, I mean, our staff is six or eight people supported by obviously an awful lot of people at JDRF and Helmsley Charitable Trust, but it’s a really, really focused group that raised money from another really focused group with a very, very specific goal.

That’s not to say that all the other philanthropic models aren’t good. There’s all sorts of stuff that a lot of philanthropies have to tackle, enumerable issues. I’m just saying that there is an opportunity; when you see a specific problem that begs a specific solution, the opportunity is there and the capital is there. Philanthropic capital is there for really world-changing disruption, in my opinion.

“I think that we have a big obligation in front of us, an imperative really, in order to make the fund successful to redouble our efforts to now educate the holders of the billions of dollars and everyone around them, that this is a disease, that now we have a lot of conviction around, can and must be cured.”

Denver: I agree with you. And I think that’s a great externality to have with all the focus on diabetes, the impact that something like this could have to get others to think differently about how they’re tackling their own problems, it’s got to be very gratifying.

So what’s next for the T1D Fund? How do you see the fund and the mission continuing to progress, let’s say over the next 5 or 10 years, Sean?

Sean: I think we’re at a really important point right now. And I say that this is working. I don’t say that it’s worked. We have attracted over $600 million of private venture capital money into companies with a specific use of proceeds in type 1. So there is no funny math here. This is $600 million real dollars going against T1D programs alongside the $ 70 million or so that we’ve invested. Now our portfolio is starting to age a little bit, our earliest companies are. And a reality of the venture sector, the reason that the role that they play in it is to take these kinds of binary risks with obviously the responsibility to their investors to monetize it, to exit it, to take these companies public, or to sell them to a strategic, in this case specifically, a pharma company.

And so we’re getting to that point where it’s not enough to convince the life sciences VC market that this is something that they should invest in. We still have a lot of convincing, a lot of work to do with the pharmaceutical sector, which I think in some cases suffers from some of the same myths, but otherwise we’ll look at, well, the standard of care seems fine. They know they can objectively say how much it costs to have an insulin pump and all of this stuff, and all of the things about it.

I think that we have a big obligation in front of us, an imperative really, in order to make the fund successful, to redouble our efforts to now educate the holders of the billions of dollars and everyone around them, that this is a disease, that now we have a lot of conviction around, can and must be cured.

We’ve seen enough science and enough progress in these companies that this is viable, and the pharmaceutical companies need to get behind it, but the only way that they’re going to get behind it is if they see the business model around it. And so I think that what you will see from us, as some of our companies continue to age and get deeper into the clinical trials, that we have some work to do on creating that next stage of the market. Venture capital was never the solution. It’s necessary, but not sufficient.

Denver: Get you started. Yeah. Right, right. This has been an incredible journey.

Sean: It is. We’re lucky we’re at a point now where we’ve raised enough money that we think that the fund is self-sustaining and evergreen, which helps us because we’re not in the fundraising business all the time. And our donors like that; it’s kind of a closed pool, and now we go off to our next effort.

Denver: For listeners who want to learn more about the T1D Fund or JDRF for that matter, where can they go to get that information?

Sean: The fund is on the internet at and JDRF is And you’ll see a lot of things about this disease and the impact, and specifically what we’re doing at the T1D Fund.

Denver: Thanks, Sean, for being here today. It was a really interesting conversation. It was a delight to have you on the program.

Sean: Thanks so much, Denver.

Denver Frederick, Host of The Business of Giving serves as a Strategic Advisor and Executive Coach to NGO and Nonprofit CEOs and Board Chairs. His Book, The Business of Giving: The Non-Profit Leaders Guide to Transform Leadership, Philanthropy, and Organizational Success in a Changed World, will be released in the spring of 2022.

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