invested in every single deal in which we wanted to make an investment. There was not an eighth deal that we sit around at Friday Happy Hours cursing ourselves about not being able to finance.
Rather than bemoaning the Funding Gap, we have been spending our Happy Hours discussing how full our pipeline is with incredibly interesting new technologies in which to invest.
The companies in which we have invested, and those we are currently contemplating, have been truly groundbreaking emerging biotechnologies. In a number of cases they have consisted of only minimal laboratory data and a plan drawn on a white board in our office by a passionate entrepreneur. There has been no shortage of potentially fantastic ideas (if they work) that could both meet a significant unmet medical need and make our investors, scientific founders, and entrepreneurs a boat load of money.
Of our seven previous Accelerator investments, three have already “graduated” collectively raising $114 million in follow-on financings. And there is more good news to come.
Accelerator is just one piece of a vibrant early-stage biotech investment community in Seattle. Three of our investors at Accelerator are local venture partnerships: OVP Venture Partners, ARCH Venture Partners, and WRF Capital. Between them, since 2003, there have been at least a dozen additional Series A investments in emerging biotech companies (outside of Accelerator). By my count, therefore, between Accelerator and its investors, we have made no less than nineteen investments in emerging biotech companies in Seattle in the last five years. In addition to these deals, other funds are also investing in emerging biotech in Seattle (although, since they are not Accelerator investors, for the life of me I cannot recall any of their names or any of the deals they have done…).
Funding Gap? Ha! Does not exist. Instead, there is an Expectation Gap. And both sides need to move towards the middle to solve it.
If you are an academic and you cannot get someone to back your idea, do three things: take a hard look at your technology (or even ask someone else to do so); take a hard look at your expectations; and, take a hard look in the mirror. Honest assessment in these three efforts will tell you why.
If you are a VC crying crocodile tears over all of the impediments between your partnership and early-stage biotechnology investment, quit it. You make us all look like complete asses. Pull up your britches, wipe your nose, and admit it—“I am no longer a VC. I am now a private equity investor with an exceedingly small fund.” (Feelings of inadequacy to follow…time to buy a Ferrari.)
