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Been there, fund that.

August 6, 2012

This post has evolved throughout the day.  It started as a follow up to this:

2 Aug Laura Strong Laura@scientre
Courtesy of @steen1969 Main role of startup CEO? From people that have been there and have funded them
Laura (by the way, check out her blog, The Next Element) Storified this discussion about the main roles of a startup CEO.  I was mainly expecting to hear “raise capital.”  Which did show up twice.  But there were other responses, as well.  From a good group of people.  Hire people, for example.  That fits in to where I was initially going with this.
I like this Entrepreneur-In-Residence program at the University of Washington Center Center for Commercialization [C4C].  In fact, I had a good discussion with Rob Arnold about it.
Fast forward to Luke’s article today titled, ” U.S. Biotech Clusters Are Losing Their Anchor Tenants, and It Hurts.”  Luke notes, “A true biotech anchor tenant employs a lot of talented people.”  And, he goes on, “you have to wonder where the investment-grade management talent will come from in the future if they aren’t learning the ropes at a real anchor company.”  “Like most VCs, [Bijan Salehizadeh] subscribes to the idea that management talent is the most important factor in determining whether a company will succeed—even more important than the technology a company starts with.”  Agree.
Next I listened to National Council of Entrepreneurial Tech Transfer [NCET2] University Venture Funding Webinar Mini-Series, “The MIT Deshpande Center: Ten Years of Moving Technologies from Lab to Market” featuring Leon Sandler.  Lots of good stuff.  But I was particularly struck by their Catalyst Progam.  The Catalyst Program uses “[v]olunteer mentors from the external community [to] help project teams direct their research and make connections.”  People.
So what if you are in a community that doesn’t have a true biopharma anchor tenant?
In response to Luke’s article, ECHO NYC tweeted:
6h ECHO NYC ECHO NYC@echo_nyc
Consolidation to SD/SF/Cambridge means other regions need to find new ways to compete.
Find new ways to compete.  I would add, in some cases, “if you can’t beat ’em, join ’em.”  In other words–in appropriate instances–maybe the answer is don’t compete head on with Boston, San Diego or the Bay Area.  Maybe the answer is to find ways to leverage relationships such that a company might find success in another community, but both communities “win.”  I think there are ways that can be accomplished.
Personally, I’d rather see a company locate in Seattle, for example, and at least have a shot at being “successful*” rather than languish in Louisville for ten years–not die, but not go anywhere.
Back to people.  There’s not a significant cadre of biopharmaceutical startup CEO-type folks here in the ‘ville.  Which makes building an anchor biopharma tenant difficult.  But maybe if we had a biopharma anchor tenant, we’d develop some startup management.  The clichéd “chicken or the egg.” 
I just read the Kauffman Foundation study University Technology Transfer through Entrepreneurship: Faculty and Students in Spinoffs which discusses four pathways of technology transfer.  Pathway 1, which involves a faculty PI and an experienced entrepreneur, only occurred in 23% of cases studied.  The report notes that, “Pathway 1, a partnership between a faculty PI and an experienced entrepreneur, represents the ideal arrangement from the perspective of most faculty members who wish to commercialize their inventions.”  While I agree that is the ideal arrangement, from experience, not all PIs think it is.  “It is, however, often difficult for faculty PIs to attract experienced entrepreneurs in the early stages of a venture,” the report goes on to say. 
So the UDub EIR and MIT Catalyst programs;  maybe efforts like those, primarily involving University of Louisville alums, could be a way to supplement the local cadre of people.
Maybe we also build relationships with groups like the Washington Biotechnology & Biomedical Association and LifeTech Boston.  Or The Kentuckians of New York, whose current President–Brent Donovan–works in pharma.
And, maybe we concurrently develop relationships with groups such as PureTech Ventures,  Atlas Venture and Allied Minds (related, see “Some venture firms find both ideas and money” by Scott Kirsner)–groups that will build a company around a technology, including plugging in the appropriate startup CEO.
*  At some point I want to take a crack at the odds of “success” and, related, definitions of “success.”

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One Comment
  1. Thanks Andrew for this post–my U of L alumni co-founder and I would be very supportive of the Pennsyltuckians collaboration. We are based in the Philly area (he’s from Murray).

    You are spot on that leadership experience in biotech/PhRMA is key to start-up life science success–you don’t know what you don’t know. Drug development is hard dammit, and not for amateurs.

    I’m an ex-academics turned “industry veteran” and I think I can say with mucho confidence that I’ve never met a PI ready to lead a start-up. Although many are capable with the right mentorship–key quality–they have to be teachable. Not always the case as you’re well aware.

    Very tough to build out a biotech hub–chicken or the egg and all of that. Takes time, just like drug development, and its hard dammit (I’ve read it took over 30 years of consistent investment to “create” RTP). Keep at it, MetaCyte looks like they’ve got the right idea. See ya in the twitterverse.


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