Happy 20th Anniversary John, Marc, and Tony – Part I

Twenty years ago, three brothers started a firm that would transform and elevate the business and practice of treating musculoskeletal disorders. On the occasion of their 20th anniversary, we profile Tony, Marc and John—three extraordinary investors, managers, partners, friends and mentors.

Two decades.

Which is long enough to take the measure of these three, still young, men.

The way they select companies to manage, people to fund, technologies to fight for, investments to sell and, yes, products and companies to buy back have touched every single corner of this industry.

And yet, how many people whose very health or livelihoods are due to the work of the VBs are aware of the debt they owe them?

Unlike, for example, the Michelson imprint on many Medtronic Spine products, there is no VB imprint on the thousands of implants and instruments and regulatory wins that came from Tony, Marc and John.

Eleven #1 Products and Eight Surgeon-Led Societies

Viscogliosi Brothers, LLC, today, encompasses angel investment activities, venture capital and private equity investments and a portfolio in professional service business activities like, for example, MCRA, LLC.

The common thread through all of these activities is a commitment to physicians and their patients.

Since 1999, that physician partnership focus led to 11 VB-created number-one products; 7 new market niches from first-mover products, the leading regulatory, clinical, reimbursement and quality systems advisor (MCRA) and, perhaps the crowning achievement of all since it ensures that the legacy of all this work will be continuing education, eight surgeon-led societies.

Along the way the brothers also executed a half dozen complex orthopedic structure transactions, seven transfers of PMA manufacturing and they led and managed turnarounds in four orthopedic businesses.

Of course, all of these activities have made each brother a wealthy person. Their co-investors, partners and lenders have received in excess of $2 billion.

We asked Anthony Viscogliosi to summarize what it is about his family firm that has made it so impactful over the past two decades. “We are business builders, not investment managers,” he said. “Our identity is to be the leading merchant banking family in the neuromusculoskeletal industry, based upon our unparalleled relationships, superior research based insights, access to capital, and emphasis on highest quality patient care.”

“Our vision is to leverage our expertise and knowledge and our service and technology systems to find innovative orthopedic concepts and make them sustainable technologies that can be commercialized globally.”

Humble Beginnings

Tony, Marc and John are the sons of parents Giovanni and Anna Viscogliosi. They have one other sibling, older sister Lori. As Marc described his sister, “Our sister is the oldest of my siblings and she’s the one who is a doctor…she got the looks and the brains in our family! She is a pyschopharmacologist with specialization in treating physicians and adolescent children. She graduated with an M.D. from Johns Hopkins and did her residency at Harvard and MGH. She is an innovator in her own right, having established one of the largest ketamine IV treatment practices in the Northeast.”

Their father was an entrepreneur who, over the years, owned several businesses including an auto collision shop in Detroit and a pub/restaurant in a Detroit suburb.

Their father, Giovanni Viscogliosi, came to the U.S. in 1956 when he was 20 years old. In Marc’s words, “He believed in the American Dream and always instilled in us the value of entrepreneurship, hard work and never giving up. We grew up in the suburbs of Detroit. Mom was born in the U.S. although her family immigrated the year before she was born. Our Mom really taught us all of our values of integrity, love and making a difference in other peoples’ lives.”

Tony adds, “So many people don’t use their names in the naming of their business. We chose specifically to call our business Viscogliosi Brothers. First because we are three brothers and we’re in business together. Secondly, because our name carries with it the requirement to operate with honor and dignity in such a manner that we always try to do what’s best and do what’s right.”

All three attended Dearborn High School outside of Detroit, Michigan.

Tony, the second oldest, graduated from the University of Michigan where he majored in economics. In addition to his academic work, Tony entered the U.S. Navy where, as part of his service to his country, he graduated from the U.S. Navy Supply Corps School where he was awarded the Navy Aviation Warfare Qualification as a supply officer designation. He fought in the Bosnian wars and served as assistant officer in charge and supply officer for the U.S. Navy and his final command was with the office of Naval Intelligence at Fort Dix, New Jersey.

In 2008, Tony was awarded an honorary degree of Doctor of Humane Letters-Honors Causa (DH.L) from the New York College of Podiatric Medicine.

Lt. Commander Anthony Viscogliosi served in the U.S. Naval Reserve for more than 20 years.

Marc graduated from New York University where he majored in economics and political science. John, the youngest, graduated from Wayne State University and majored in criminal justice.

Immediately before forming their own company, the three brothers worked at the New York office of St. Louis based investment banking firm, Stifel Nicholas. As the millennium was coming to an end, Wall Street was going through a bear Market and most firms were laying people off—including Stifel Nicholas. Along with many other Wall Street workers, Marc and John got the pink slip.

In retrospect, the timing was close to perfect. At the same time that Wall Street was going through one of its periodic downswings, the brothers were working on bringing spine arthroplasty to the world and were negotiating with both Waldemar Link and B. Braun Aesculap to form a spine business dedicated to total disc replacement—Spine Solutions, Inc.

The brothers offered the opportunity to pioneer disc arthroplasty to their employer, Stifel Nicolas. Stifel, not being in the venture capital business, passed.

Timing was perfect. Tony then negotiated his way out of Stifel but into Stifel’s New York office at 59th and Park Avenue. Viscogliosi Brothers, LLC have been at 505 Park Avenue ever since.

Character, Integrity and Commitments

The character and style of the three brothers soon pushed the young firm into something other than a transactional bank. Investing in musculoskeletal technologies and companies was (and is) in a most profound and personal way, a commitment to physicians and their patients.

In fact, much of the brothers’ passion and commitment can be traced to a single, tragic event.

Tony was a 14-year-old boy riding his bicycle to work as a caddie in the Dearborn Country Club when, as he crossed a major intersection, a car going more than 50 miles per hour plowed into him. His body was launched 30 yards into the air where he slammed into a tree, peeling most of his facial skin off. The momentum of the impact caused his body to bounce off the tree and hit hard on the ground where his leg broke into pieces. He left bone on the road, lost consciousness and nearly died.

Through a long, difficult recovery, Tony came to realize that he had been given a second chance and with that a unique opportunity. As he described it to us, his journey has since been to uncover what the Lord intended for him which, given this trauma in his formative years, turned out to be orthopedics—something he painfully and personally understood.

Today, as many, many people know, when the V Bros make a commitment to a product or a company, it is enduring and unwavering.

So, the brothers built a business that transcended transactions. They put their own capital alongside other investors. They work side-by-side with managers, regulators, engineers and, of course, their physician partners. Hands on. Long term commitments.

“Giving up does not exist in our vocabulary, or in our ethos. Once we decide on a path, we’re going to see that path through from daylight or darkness, storm or wind, we will find a way through it,” said Tony.

Eventually, the brothers became something even more personal—a family office investor/partner.

How do the VBs do it?

We asked Tony that question. How do you and your brothers select your investments and stick with them through all kinds of challenges. Do you, for example, learn more from your failures than you do from your successes?

He told OTW, “There are three essential elements to our success. To begin with you’ve got to be happy at what you do. Secondly, you’ve got to have grit to work through any obstacle. Thirdly, you’ve got to have the mindset to constantly evolve actions, systems, and processes. You’ve got to adjust to the circumstances.”

“But, of the three, the most essential is GRIT. Grit, in essence, is figuring out how to turn a ‘no’ into a ‘yes.’ To think and learn and find the route when all others stop trying.”

Tony, then talked about the nature of success at VB. “Success itself is creating a solution for a need that is not met. Success is adapting and changing direction to solve an unmet need. Success is creating the right ecosystem of people and of resources. Finally, success is putting the capital behind the right entrepreneurs.”

“Those are four pillars that form the foundation of our success.”

The VB Method in Four Easy (ha!) Steps

1. STEP ONE: Understand the problem
2. STEP TWO: Identify the solution
3. STEP THREE: Establish barriers of entry with Level 1 clinical data
4. STEP FOUR: Use that data to establish a dominant market position for a sustainable period.

That is the VB approach—which resulted in market leading companies in all the neuromusculoskeletal anatomies—cranial maxillofacial, spine, small bone and joint and large bone and joint systems.

Recipe for Success

Hindsight, being 20/20, reveals a pattern in the VB style. Repeatedly the brothers put themselves at the forefront of musculoskeletal innovation. And, it is clear by reviewing the record that the brothers have been walking through a process that Tony calls the “Four Rs”. Remove, Repair, Replace, Regenerate.

As Tony explains it, “We try to find and develop leading technologies in each one of these areas of orthopedic care that create solutions. We’ve moved from Remove to Repair to Replace to Regenerate. And as we do, the markets get larger because our physician partners are able to treat more people, better, earlier. Ultimately, finding solutions that help the body heal itself is the direction the orthopedic industry is going.”

So, Tony, we said, this is all good and well, but please boil this down to a “recipe for success”, the VB way.

And, he did.

End of Part One

Next Week: It’s a little of this, a little of that and if you follow the VB recipe (just four ingredients) the result is a grand feast of technology and ever improving treatments for musculoskeletal maladies. Next week we reveal the philosophies, personalities and, yes, ingredients of the VB success and ponder where the brothers go from here. One thing we know for sure, the best is yet to come.