Gm! Which health-AI tools are you building? đ¤
[Welcome to Issue Number 33 of The House Brazeryen, where we break down the latest #startup, #biotech, and #ScientistCEO-related news for you fortnightly, in roughly 5 minutes. Brought to you by Brazen Bio, Brazen Capital, and brainsurgerydropout.]
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RE: I Prolly Wouldnât Fund Me Either WTF!
by Shawn Carbonell, MD, PhD â Iâve often said that weâre building Brazen Capital to be the early stage VC fund I wish existed a decade ago when I was founding my first biotech startup. So, knowing what I know now⌠would I fund the fresh, young brain surgery dropout I was back then if he pitched us?
MAYBE??!?!?!
Let me explain⌠back then my main thesis was targeting a very obvious, holy grail receptor, 1) with multiple functions that are massively hijacked in cancer cells and 2) most people thought would NOT be safe to inhibit. It was so fundamental of a molecule for normal physiology that basically everyone ignored it and no one seriously made a go of it before I pulled the trigger.
Therapeutics is broken
Howeverâover the course of a decade as a biotech founder deep in the trenches developing a first-in-class drugâmy thoughts on how to have the most impact for cancer patients evolved. I soon realized the therapeutics industry/system is broken and we are doing it all wrong:
SYNERGISTIC MEDICINE: The most obvious realization was rooted in something I already started thinking about in Oxford during my first post-doc: systems biology. I was convinced no single drug (including mine) would ever meaningfully change outcomes in cancer for the majority of patients. Like triple and quad HIV therapy, it would take multiple complementary treatment modalities to tackle such a complex disease. Indeed, it was already something I was pondering given the name of my startup: OncoSynergy.
IMMUNOTHERAPY: I was familiar with this space for about a decade before I truly realized the sheer power and potential of it. Iâll save the embarrassing story âof my personal experience with immunotherapy that was the unlockâfor my book, but I assure you it is REALLY good (and also involves my penis). In a nutshellâso to speakâthe immune system is literally a generative AI and manufacturing facility that can tailor thousands of drugs (e.g., antibodies, cytokines, etc) to address an intruder (like viruses) in real-time with no venture capital or FDA regulatory process. The problem, of course, is tumors are intruders from within and can often hide from the immune system. So, our immune systems need a little nudge (e.g., checkpoint inhibitors).
Oncology 3.0
IMHO, the actual cures will come when we can strategically combine one or two immunotherapies with a therapy that overcomes multiple drug resistance mechanisms (*ahem* like mine), a drug that kills massive numbers of tumor cells to unleash neoantigens to teach the immune system (*ahem* besides mine), and then a vaccine approach (plus maybe some cancer metabolism cocktails) for maintenance. To me, this is âOncology 3.0.â And this may not necessarily get us frank cures for everyone, but if we can turn the worst cancers (e.g., pancreatic and brain) into manageable chronic diseases⌠that is a fucking paradigm shift and a half. [Add in prevention and early detection measures and Iâll retire.]
So, whatâs the problem then? There are several. First, VC canât fund these combo cures (scale problem). Second, industry wonât support these combo cures involving competing products (silo problem). Third, NIH wonât fund these combo cures either (politics problem).
BRAZEN BREAKDOWN
Where does this leave us? I believe VC should keep doing what it does best: funding tools. Each new approved single drug is a tool in the toolbox for Oncology 3.0 and gives us more optionality for combos. It may not even be necessary for the drug to be FDA approved so long as the drug gets to IND-approval to enable use in Oncology 3.0 clinical trials (whichâas in the case of my drugâcould be done with as little as $10M).
As for â2009 Shawnâ, perhaps the VC critics were right? Should he have chosen a lead indication that was lower-hanging fruit (and ultimately more VC fundable) to assure greater likelihood of success and then secondarily add his pet indication afterwards? Weâll never know and in retrospect perhaps his pure passion for glioblastoma and glioblastoma patients really was the key. After all, he and his team somehow found a way to fund it outside of VC and the drug does now exist as a tool!!!
But, if not VC, pharma, or NIH, who is going to drive the Oncology 3.0 trials? Thatâs a good question. Billionaires could do it if they had a personal stake in it bc they would not only pay for it but also help cut through all the academic-political-industry bullshit and just find ways to get it done (our cure guide pal Ethan Perlstein would probably agree). Scrappy-innovative nonprofits are a good 3rd party option as well (not the big establishment brands who exist to justify their existence). And of course weâll need a few brazen clinical academic partners to champion the trials.
All Iâm sayinâ is this: itâs no mistake I left my startup right after my drug was IND cleared for Phase I, that the first thing I did afterwards was to start a nonprofit (Cure Glioblastoma), and that the next thing I did was to focus on helping other founders develop their tools (including starting a venture fund)! Stay tuned⌠Signing off.
XOXO. Gossip Guy.
VC CORNER: Cash, Card, or Equity?
by Scott Alpizar, PhD â Last issue I explained what an option pool is and why you should have one. Offering equity is a great way of attracting and retaining talent, especially in limited cash situations. In biotech, equity is kind of expected when joining an early-stage company. But how much should you give away?
I couldnât find a good source, but I think anywhere from 0.005% to 5% can be the range depending on the title and experience of the new hire. There arenât really any rules to how much you should give though. I canât give you a number for your specific situation, but what I can give you are some things to consider:
BRAZEN BREAKDOWN
Pool Size
You obviously canât give away more than you have. So, understand your goal. If your new hire has the experience and is the person you need to move your company forward, then you might give a larger amountâthough this leaves less for other future hires. And again, giving more equity away means less for you!
Timing
There are a few ways to think about timing! First, vesting. Do they get their options at the time of hiring or over time? Spreading it out helps incentivize them to stay. Tying equity to milestones is common as well. Second, when can they exercise? So far, weâve been talking about options, not actual stock. Options can be exercised to receive stock, so make sure you know when they are able to do that. Finally, you want to outline what happens if the employee leaves, especially if they arenât fully vested. Would they be forced to exercise or give it up? You donât want someone no longer contributing to the company to be earning options.
Value
Again, options are not stock. Theyâre the right to buy stock at a certain price. This price is called the âstrike priceâ and is determined by the valuation of the company at the time of the award. It is beneficial for the employee if this valuation is low, which is the opposite of when you may be fundraising and hoping for a high valuation! Also, the different option types may have different tax implications for both the company and the employee when exercised.
On a final note, cash may still need to be a part of the equation. A young scientist right out of school canât use equity to pay the bills, so may want a salary. However, someone on the cusp of retirement may be totally fine with only equity.
I know Iâve only scratched the surface, but that was intentional. In my experience the specifics around giving stock options can get VERY complicated VERY quickly. Check with a lawyer (or a few*) for a better explanation and to ensure that what youâre looking to offer aligns with the companyâs goals.
[*talk to several other founders in your space for empirical data âed.]
đ BRAZEN SNAX
đ This kid just got hired by SpaceX. What were you doing at 14?
đđ˝ Another sufficiently rigorous reason for people to fucking hate academics
đŚ Infamous COVID challenge study reveals viral superspreaders
đ Dudes be dudes: the first known âdick picâ is over 42K years old
𩸠Why most medical innovations fail: humans being humans
𧏠DNA from two foot long mega-gecko that could eat birds sequenced
đ Massive depletion of ground water has the earth on tilt (literally)
đĽ When your boss gives you bad feedback, badly
â° TikTokCrak: Booping wandering spiders and yoinking jungle puppies
đŞ CARVEOUT
DUH. Tim Ferris on the Huberman Lab Pod is an obvious must-listen. (*tw* suicide)
đđ˝ A DOSE OF GRATITUDE
We are grateful for Professor Matt Walkerâthe Sleep Diplomatâfor spreading the gospel that SLEEP IS MEDICINE.
đ BRAZEN MEME
âď¸ FEEDBACK
Feel free to tweet all thoughts, questions, and insults to us. Bring it. No, really. COMEđđ˝ATđđ˝USđđ˝BRUHđđ˝
And letâs continue the conversation on LinkedIn: @brazencapital and @brazenbio.