Mar 12

youngStartup Ventures VC Outlook | Bio

youngStartup is one of my favorite organizations that promotes connections between VCs and entrepreneurs. Wednesday, March 10 was their “VC Outlook” event for both tech and bio. The group is run by founder Joe Benjamin and I had the pleasure of volunteering for the life sciences portion which was also organized by Adam Negnewitzky, Joe’s Senior Associate.

Before I mention the VCs that were there and the interesting topics that came up, I have to gush a little about the other volunteers I met. youngStartup puts on the type of conference where it’s easy to strike up conversation with those around you. I built an entire network with the other volunteers within my first five minutes helping out at the registration table. I have to say, Adam has an army of helpers that are passionate about VC and entrepreneurship. I met some great people from Columbia, Ross, and other schools. There was even another InSITE Fellow, Jon Cooper, volunteering there, as well one of my Stern classmates, Steve Estes (all three of us had skipped VC-related classes to attend a VC conference, which I found pretty ironic. I guess that’s entrepreneurial spirit for you).

The life sciences panel included: Brandon Hull (Cardinal Partners), Noah Kroloff (NGN Capital), Andrew Schneider (Holtz Rubenstein Reminick LLP), Robert Seltzer (Care Capital), Anthony Sun (Aisling Capital), Nicole Vitullo (Domain Associates), and Kevin Collins (Goodwin Procter LLP) as moderator.

Much of the discussion was driven by audience questions, so naturally some topics came up that are common at other bio/pharma-related VC forums (healthcare reform, trouble forming syndicates in the current market, etc). I’ll try to list a couple that I thought were unique to this discussion in particular.

One interesting comment was about business development in Big Pharma. Yes, we all know Big Pharma has a lot of cash, and yes we all know that just because Big Pharma has a lot of cash it doesn’t mean they’ll buy just anything. But there was an observation about how start-ups gain champions within the pharma BD department.

It was observed that there is a bimodal approach to how acquisitions get pushed through the BD department: If you’re a young person in pharma BD, you are willing to champion something and push your company to buy it. In this case, your reputation isn’t on the line because the risky acquisition target still has 10 years development time left and there won’t be any noticeable failures in the near term.

In the second situation, you’re a more established, older BD professional and you only champion acquisitions that have drugs that have already been approved. In this case it’s safer and poses less risk to your career. The panel noted that they see less deals fall into the middle of these two approaches, thus the “bimodal” aspect of pharma deals.

Another interesting topic that came up was the issue of tech transfer. You thought healthcare reform was controversial? There was definitely some thick tension in the room when this topic came up. Why is tech transfer too spotty? One entrepreneur hotly noted, “We have SBIR grants and other grants that validate our science, but universities will show favor to other, less developed ideas with unproven science. Why?” Heads nodded in the room. Good point.

The answer seems to be that simply, some universities are better at this than others. Some are organized, well-run machines while others are spotty and don’t seem to have “best practices” that they follow. This problem feeds into overall VC environments, helping to explain why some cities become spin out powerhouses while other cities with high caliber of universities, do not.

More information: youngStartup Ventures

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