Life goes on, even in the face of great tragedy. Startup life also goes on, even in the face of great economic decline.
That was one message that came through loud and clear yesterday at the Early-Stage Life Sciences Technology Conference, an annual event (this was the fifth) put on by the Massachusetts Technology Transfer Center. A dozen hopeful startup founders and technologists gathered at Harvard Medical School in Boston to share their entrepreneurial visions with potential investors, partners, and others. In the process they painted a picture of a world with new ways to fight breast cancer and deliver drugs to the brain, gel-based scaffolds to promote tissue regeneration, safer and more accurately positioned catheters, and even less painful tonsillectomies.
The presenters, all pre-venture money but some with angel funding, represented recently formed Massachusetts companies or “faculty of Massachusetts institutions with technologies that could be the basis of a start-up or license,” according to the application guidelines. The forum provided an opportunity for these folks to give 10-minute pitches laying out the market for their products, their business strategy, and their technology, and describing the funding they are looking for to get off the ground—and in some cases, to get all the way to profitability. But to kick things off, I had the privilege—and fun—of moderating an opening panel on the climate for startups today.
I had four great guests: Carl Berke, associate director of Partners Innovation Fund and co-founder of MA Medical Angels; David Beylin, program manager of the SBIR Development Center at the National Cancer Institute; Aaron Sandoski, managing director of Norwich Ventures; and David Steinmiller, founder and COO of Woburn, MA-based Claros Diagnostics, which just raised a $4 million B round.
In other words, three people with different flavors of money for startups, and one who had successfully raised money in this climate. We had a great discussion about current conditions for launching a life-sciences startup—and yes, there is life in life sciences. The main message for me was that while innovation is always messy, it’s even messier today, with a multitude of eddies swirling in the startup pool–as opposed to rosier times, when the flow is more uniform. Here are some highlights of the conversation:
—Money is still available from venture firms and angels, but it comes with more strings. Berke pointed out that investors are asking for a lot more in capital efficiency in startups, challenging development plans more carefully, and doing more tranching of investment dollars to reduce risk.
—More virtualization and outsourcing—but at a potential cost. At the conference, and in my discussions before the panel, panelists mentioned that forming more virtual companies and outsourcing non-core work can save a lot of money in today’s cash-strapped climate. At the same time, they pointed out, workers in such settings don’t necessarily have that same passion and drive as when everyone is together, going all-out to fulfill a startup’s vision. Sandoski predicted that there might even be a little bit of a backlash a year or two from now against so much outsourcing and virtualization.
—-Strong interest in the new SBIR (Small Business Innovation Research) Phase II Bridge Program, which launched last May to provide up to $1 million per year for up to
