You’ll find no doors in the office of Safeguard Scientifics President and CEO Steve Zarrilli, or in any other office in the investment firm’s new Radnor, Pa., HQ, for that matter.
And he likes it that way.
“It’s more open, there’s more collaboration,” Zarrilli said.
Eight months ago, when Safeguard started its move into a 15,602-square-foot space in the 170 Building of the Radnor Financial Center — next door to companies like Lincoln Financial Services and NewSpring Capital — the venture capital outfit was very careful in arranging the space in a way that wouldn’t alienate startup founders.
After all, the company’s is on a 60-year-long trek through venture capital history. Safeguard played a starring role in the halcyon days of the suburbs as a leader in Philly-area innovation, and was later forced to pick itself up off the ground when the dotcom bubble burst in 2001.
"When I look at the Philly landscape for entrepreneurship, in one word, it’s uncoordinated."
“[Its] impact on Philadelphia startups, Philadelphia investors and Philadelphia philanthropy is legendary,” investor Josh Kopelman said just a couple of years ago of Safeguard and its founder, Pete Musser.
The publicly traded company, following the rough early aughts sought to shed some weight and refocus. By 2003, its portfolio was whittled down to 14, down from 41 in 2001.
And yet, through the years, Safeguard doubled down on the risky bet technology had once been. The company today has a stake in 27 companies in the life sciences, financial services and digital media spaces. The bigger questions moving forward would be: can the 60-year-old institution continue to reach out to the Philly startup world? Can they bring back a 21st-century version of the huge late-’90s wins, minus the subsequent downfall?
This reporter took the Paoli-Thorndale line out to the ‘burbs to check out the new offices and have a chat with Safeguard’s Zarrilli who, sitting in his doorless office, opened up about the company’s future and the pain-points within the Philly tech ecosystem.
(This interview has been edited for length and clarity.)
What does this new office say of where the company’s going?
Well, had you come up to the old space, you would have seen a 1990-ish type of office, a place where everybody could shut their own door and disappear if they wanted to. This space is a completely different environment with a lot of gathering spaces.
When a technology entrepreneur comes through, they see that we’re forward thinking. We didn’t put a pool table or pinball machine but we still have enough of a “cool factor” that says that we understand what it takes to be an innovative company.
Why has the company shifted beyond the traditional life sciences space to invest in IT?
Over the past couple of years, the most interesting things in healthcare are the ones that improve access to information for doctors and patients without a third party. If you go back eight to 10 years ago, Safeguard invested more in things like therapeutics and drug development. Today we focus more on the health IT and digital health platform. Like a wireless device which allows doctors to have direct access to data from a patient’s arrhythmia.
It can sometimes be difficult for people to find interest in the venture capital world. What do you feel is exciting about the work that you do?
A lot of things that we’re doing day to day don’t get a lot of air time and aren’t necessarily considered sexy. But they’re important to us because they’re the foundation for creativity and entrepreneurship. I think it’s exciting we’ve put money to work in seed capital. We want to be mindful of the fact that we have a role to play in early stage capital investments. We want to make Philadelphia the center for healthtech innovation.
What’s wrong with the Philly tech scene? What criticism can you offer?
We have foundational issues. One is the talent pool. We don’t market ourselves very well as a region around technology, innovation and entrepreneurship, and it’s a scattered effort at times between a lot of organizations who think they’re carrying the torch, but everybody’s running in different directions. When I look at the Philly landscape for entrepreneurship, in one word, it’s uncoordinated. Having said that, all these organizations are doing great things, but the challenge that we have is how can we bring these things together.
Is there unfair pressure to generate exits from Philly-based companies?
Well, exits ultimately bring profits, which bring wealth, and when done right it allows for a cycle to invest in the local ecosystem. If there are few exits, there’s less of that wealth-creating activity taking place. You don’t see a whole lot of that in Philly.
There’s two things against that happening here: there’s fewer people with that kind of money and fewer who come back and want to fund the next generation of companies. And that’s where the true velocity we’re looking for is.
So, having opened these new offices, where do you see the Safeguard story going after five years?
Toward creating a vibrant work experience for our employees, becoming a recognized leader and demonstrate leadership to others who are trying to create entrepreneurship in Philly. We have as much of a role as anyone else who claims to have a piece of the action.-30-