How to switch out of clinical medicine?

[drboris]

Hi guys,

I am considering getting an MBA during or after medical school.

How does doctor make the switch from clinical medicine to venture capitalism, healtcare management, etc?

What options are there for an MD/MBA after residency?
Is an MBA required to enter other non-clinical fields?
How much is the pay for non-clinical fields?

Thanks!

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[Learfan]

If you would like to learn the structure of the venture capital field quickly, I suggest investing in a copy of Pratt's "Guide to Venture Capital". This is the bible where entrepreneurs go to determine which VC groups specialize in funding the field that their idea falls into as well as the stage of progress they have made with the idea. There is a big difference in funds that serve as "angels" funding ideas without patents, plant or customers and those that specialize in obtaining intermediate level funding packages for a business that is growing.

Most of the VC firms are located in the NY, NJ, MA and CA so you will probably need to to move to one of these areas. You should understand the structure of a VC fund prior to attempting to join one. Each fund is organized as a limited life corporation that will dissolve at the end of a time span, usually 10 years. A fund is usually raised by a previously successful entrepreneur who places a portion of his personal wealth into the fund to initiate the process. The goal is usually to raise a fund of YY million dollars for use over Z years. The wealthy entrepreneur then solicits other wealthy individuals known as High Net Worth Individuals or HNWI, banks, private equity groups and other sources of funds to make up the total desired. Please note that people who contribute to the fund are often able to exercise partial control over how the funds are utilized to aid developing business entities but the fund manager often has ultimate authority. Each contributing entity has to contractually bind itself to make a specified quantity of capital available to the fund over its lifetime. Ideas are then solicited from entrepreneurs with novel business plans within the areas of expertise of the fund managers who contributed the capital to set up the fund and a decision to fund the new business concept is made by the committee of contributors along with outside advisors if needed. If a decision to fund a venture is taken, then the offer is given to the applicants as a "term sheet" By offering the capital, the VC group then acquires a large stake in the enterprise recieving capital assistance, usually 40% or more. The new business then tries to grow with the help of the capital provided by the VC along with expert advice from the VC board of contributors. At the end of the fund life, the profits from funding the Z number of business entities over the life of the fund are returned to the contributing HNWI, banks and private equity firms. Profits come at the time of the "liquidity event", the acquisition of the small business by a larger firm or the offering of public equity.

The whole point of describing the structure of a fund is to ask the question: Where do you fit in? If you can offer capital in the form of several million dollars then you can sit on the board of contributors and help with funding decisions as well as provide advice to the new business entities who recieve a term sheet. If you do not have capital, then what role do you expect to play? You could be an advisor but I would not be optimistic about it. In the area of medical research, the individuals who contributed to the creation of a venture fund often go the the best academic sources to request advice concerning the viability of a potential new pharmaceutical or medical device. It may be very difficult to secure entry into the venture capital field with an MD as your only credential.

 

[Law2Doc]

How does doctor make the switch from clinical medicine to venture capitalism, healthcare management, etc?

What options are there for an MD/MBA after residency?
Is an MBA required to enter other non-clinical fields?
How much is the pay for non-clinical fields?

Thanks!

The MBA is not "required" to enter into any field. This is why most of the better known MBA programs require one to have worked before matriculation -- it is an "add on" degree meant to build on and enhance prior experience. An MBA may be required by specific companies before you receive certain level promotions or salaries, however. I also agree with the prior poster who indicated that venture capitalism is rarely a starting point -- if you are truly interested in this, unless you have a lot of excessively rich friends and family who want to back you, you probably need to find a way to leverage your MD to get you into the door at some sort of finance/banking job, and from there work into the VC field using this finance background as purportedly relevant experience.
As for pay, there is really no way to answer without knowing the specific job description ("non-clinical jobs" covers too much ground), as salaries vary widely depending on the job/industry, your experience level and your role. According to US News, for example, people coming right out of the top three MBA programs made a reported average starting salary of $105 -111k, probably with significant bonus potential, but there is no way to know what their prior work experience was on average, nor is that close to the average for all MBA programs. (Within this average, I would assume people entering investment banking/finance made higher salaries than this, and people entering corporate management, marketing, accounting or operations made less.)

 

[drboris]

What are some common non-clinical jobs for MDs?...and how much $?

Thanks

 

[Law2Doc]

What are some common non-clinical jobs for MDs?...and how much $?

Thanks

Common industries for MD/MBAs, I would think, would include hospital admin/management, pharmaceutical industry and medical devices/services industries, HMOs/health insurance industry, management consulting for health industries, and various finance positions involving investment coverage of and strategic analysis for medical/health products and services businesses. I couldn't comment on the specific jobs. Salaries will vary widely based on the specific position and level of experience, but starting salaries (excluding bonuses and benifits) in any of these industries will tend to be less than six digits. Others may have more specific info.

 

[Raheem]

As an MD/MBA who investigated job opportunities in this field, I must disagree with the statement that you need to develop a strong finance background before entering VC. These funds are very interested in finding new associates who can intelligently evaluate the merit of the technology/ideas underlying investment opportunities and who can operational support to funded entrepreneurs. As someone with a strong medical background, you will be able to help fill this role better than most of the people coming out of business school. You obviously will not be of the same caliber of the fund's dedicated advisors, but you will be one of few full-time day-to-day employees with this sort of extensive knowledge.

VC firms were eager to speak to MD/MBAs without finance background...

If anything, I would argue that you need OPERATIONAL experience more than a finance background. I say this because (1) the depth of finance knowledge required for VC is not as substantial as it might be in other financial sector jobs; (2) as a person with extensive medical knowledge, most companies would not have you running the numbers -- you will never be as good as the guy who spend years at JP Morgan; and (3) ops experience helps you learn how companies survive in the industry.

Don't be discouraged! If you are interested, go after it... But definitely be sure you know what venture capital entails. Just my thoughts.

 

[MS05']

As an MD/MBA who investigated job opportunities in this field, I must disagree with the statement that you need to develop a strong finance background before entering VC. These funds are very interested in finding new associates who can intelligently evaluate the merit of the technology/ideas underlying investment opportunities and who can operational support to funded entrepreneurs. As someone with a strong medical background, you will be able to help fill this role better than most of the people coming out of business school. You obviously will not be of the same caliber of the fund's dedicated advisors, but you will be one of few full-time day-to-day employees with this sort of extensive knowledge.

VC firms were eager to speak to MD/MBAs without finance background...

If anything, I would argue that you need OPERATIONAL experience more than a finance background. I say this because (1) the depth of finance knowledge required for VC is not as substantial as it might be in other financial sector jobs; (2) as a person with extensive medical knowledge, most companies would not have you running the numbers -- you will never be as good as the guy who spend years at JP Morgan; and (3) ops experience helps you learn how companies survive in the industry.

Don't be discouraged! If you are interested, go after it... But definitely be sure you know what venture capital entails. Just my thoughts.

Would you say that you need to be licensed, or do you think venture capital firms would take an unlicensed MD? I mean, it's not like working for an insurance company/HMO who need licensed physicians, the vc firms just need someone with the medical/scientific background...

 

[Shredder]

Would you say that you need to be licensed, or do you think venture capital firms would take an unlicensed MD? I mean, it's not like working for an insurance company/HMO who need licensed physicians, the vc firms just need someone with the medical/scientific background...

good question...im a premed and im wondering if i will do a residency, which is contingent on the answer to this inquiry. VC sounds sweet, and if a residencys not needed for it then why bother

btw about that icon, it was only cool when neo stopped the bullets in matrix one. after that it was old news, the flying as well. in fact i thought matrix 2 and 3 were completely unnecessary, i pretend like they never existed. 1 i thought was very good, and all the loose ends had been tied up without need for extension. neo stopped bullets, moved very fast, saw in binary code, and destroyed smith. sigh, i guess pursuit of money is not always a good thing, when it comes to sequels.

 

[Law2Doc]

good question...im a premed and im wondering if i will do a residency, which is contingent on the answer to this inquiry. VC sounds sweet, and if a residencys not needed for it then why bother

From what I've been told, you probably want to do the first year of residency (the "internship" year) to keep your clinical options open as a back up. Otherwise it's almost impossible to get back into medicine. (But that's just what I was told by an older academic doc - no idea if it's true).

 

[Shredder]

oh yeah i too have heard something special about first year, can anyone clarify?

 

[Law2Doc]

oh yeah i too have heard something special about first year, can anyone clarify?

Well in the first year (internship) you are a generalist -- you haven't specialized yet and I believe you will be doing all the "heavy lifting" for a variety of rotations. It's there that you really learn the ins and outs of clinical medicine. After that you start to specialize - with the surgeons doing surgical work, radiologists doing more in that field and so on. So I guess having done the internship before trying something else leaves you at a better launch pad if you want to come back. Probably has to do with internship being particularly hard if you haven't eased into it from your med school clinical exposure or perhaps hospitals (for liability reasons) not wanting someone who hasn't proven themselves to take night call alone where they haven't worked in the field in a while. But anyone with actual experience and not talking from decade-old hearsay and speculation (as I am) should please weigh in.

 

[MS05']

Well in the first year (internship) you are a generalist -- you haven't specialized yet and I believe you will be doing all the "heavy lifting" for a variety of rotations. It's there that you really learn the ins and outs of clinical medicine. After that you start to specialize - with the surgeons doing surgical work, radiologists doing more in that field and so on. So I guess having done the internship before trying something else leaves you at a better launch pad if you want to come back. Probably has to do with internship being particularly hard if you haven't eased into it from your med school clinical exposure or perhaps hospitals (for liability reasons) not wanting someone who hasn't proven themselves to take night call alone where they haven't worked in the field in a while. But anyone with actual experience and not talking from decade-old hearsay and speculation (as I am) should please weigh in.

Anyone know where you can find out (maybe a website) which vc's are looking to hire?

 

[Shredder]

Anyone know where you can find out (maybe a website) which vc's are looking to hire?

i have to stick this in here as the meddlesome premed...anyone know if any Austin VCs might be willing to take on an undergrad to fulfill any roles, even unpaid? maybe filling water or sweeping floors? ha...id really like to get exposure to VC, would be golden experience. and i believe austin does have some VCs.

 

[Learfan]

i have to stick this in here as the meddlesome premed...anyone know if any Austin VCs might be willing to take on an undergrad to fulfill any roles, even unpaid? maybe filling water or sweeping floors? ha...id really like to get exposure to VC, would be golden experience. and i believe austin does have some VCs.

Talk to the person listed in the link below. He is the head guru of the entrepreneurship program at UT Austin. He can hook you up with much of the activity in the Austin area and beyond but do not expect much for your efforts. I do not believe that you will have any significant business success working with his methods but he is the big man and founder of the local business incubator. I forget its name.

The reason for my pessimism has to do with going through the UT program and seeing the results of the business incubator. After many years of work, the results are pitifully small. Things happen at a truly glacial pace. Most of the businesses that had the "support" of the incubator went nowhere and either collapsed or turned into very small enterprises that anyone could start without all of this fancy assistance. Good luck but I would strongly recommend focusing on the MD followed by residency and building a practice as a means of achieving financial success. Business degrees and what you learn are very over rated. Been there, did that, got the grades (3.8), did not matter. No doors opened for me. Entrepreneurship is very high risk and most projects come to nothing.

http://www.mootcorp.org/cadenhead.asp