Gm! Message to synthetic bio: all your base are belong to AI.
[Welcome to Issue Number 38 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 Capital and brainsurgerydropout.]
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RE: Musings on pivoting, and Ebola
by Shawn Carbonell, MD, PhD â Last month, Y Combinator posted a YouTube video about their favorite YC pivots. The craziest one to me was a YC company that eventually became a sneakerhead unicorn conglomerate we now know as GOAT group (YC W11).
Yes, I purchased my fair share of Yeezys from GOAT back in the day, but I was also a big fan of their original YC startup concept: Grubwithus! This had NOTHING to do with shoes, but was instead a âsocial dining networkâ (WOT!) with pithy marketing:
Searching back through my Gmail archive it seems I attended at least 3 Grubwith us dinners in the Bay Area in 2011, the year I incorporated my biotech startup. They were particularly memorable because several of the attendees were venture capitalists who participated in their pre-seed after Demo Day and Iâof courseâwas a startup founder looking for venture capital.
Ultimately, I was not successful in raising from the Grubwithus VCs, but I did get to hang out with a young Ajay Vashee who was with the VC giant NEA and eventually became the CFO that took Dropbox public in 2018. It was also how I gave my first ever in-person pitch on the hallowed grounds of Sand Hill Roadâwhen I met a pair of fratty DCM associates over some high-end pizzas in SOMA.
FILOVIRIDAE đŚ
Going from an in-person dining social network to selling sneakers online is a pretty hard pivot. But my startupâs clinical indication pivot was arguably HARDER: we went from focusing on brain cancer to goddam Ebola Virus Disease (EVD)!!!
I wonât go through all the gory details at this time, but it started with a teensy crowdfund campaign to pay for an in vitro pilot study⌠to a full-blown EVD program with TWO BSL-4 laboratory collabs and a multi-million dollar manufacturing partnership to address the 2014-15 outbreak in West Africa.
It was a high risk pivot, of course, but one that we felt could accelerate the development of our lead program since the FDA development path for either indication was largely identical. Essentially, it was a strategy to potentially try to save lives in Africa during an ongoing epidemic while also moving our cancer programs forward. Win-win?
This pivot brought a lot of media exposure to our startupânot all of it positiveâand was a fantastic lesson for me in biz dev as well as shitty reporters with hidden agendas. But looking back it also definitely scared off a lot of VCs who were otherwise enthusiastic about our original oncology program. We would never hear from them again.
Ultimately, the West Africa epidemic died down along with any interest in our Ebola program and the startup very nearly died with it. This was the first time I seriously considered resigning.
BRAZEN BREAKDOWN
Would I do it again? Fuck YES! To quote the smash hit movie Wedding Crashers:
âWe have no way of knowing what lays ahead for us in the future. All we can do is use the information at hand to make the best decision possible.â
âSecretary William Cleary (as portrayed by Christopher Walken)
The experience itself was goddam worth it. My Silicon Valley homies rallied behind us through two crowdfund campaigns, we got invited to D.C. to pitch BARDA, I did my first live radio interview and my first international interview, I got to interact and collab with several of the scientists featured in the 1994 Ebola bestseller The Hot Zone, and we made super cool swag that is still somewhere in my parentâs attic.
Thatâs plenty, but it gets much, much better⌠the science we did on Ebola led to a critical molecular mechanistic insight useful for our oncology program culminating in a $300K NIH grant 5 years later!
[I may even have caught Ebola if I had my way and flew to Africa with the Wellbody Alliance to provide assistance on the ground, but my wife at the time forbade me. Caveat Robert Frost.]
Y Combinator S23 Bio Preview
The Y Combinator Summer 2023 batch is just days away from being ready to come out of the oven! Out of 215 companies, there are 23 âhealthcare-relatedâ startups this time around.
As expected, over half are AI plays or have a primary product with dominant AI flavor crystals. Several are using AI to automate super boringâbut laborious and expensiveâprocesses in clinical medicine including coding, billing, and insurance (e.g., Decoda Health, Health Harbor, and Pandan). Others are tackling metabolic disease (Olio Labs), at home cancer screening (Cleancard), and Apple Watch-based health optimization (Empirical Health).
Surprisingly(?)âand for the first time since 2016âthere are ZERO therapeutics startups in S23. In fact, there have only been 9 therapeutics startups (out of 109 Bio-related startups) since Surbhi Sarna took the helm as the first ever YC Bio Partner in late 2021. Across all batches there have been 53 therapeutics startups total (1.2%). Is this YC admitting they donât know what to do with therapeutics or a reflection of the fact they only just recently added a dedicated Bio partner (and only one)? Or is Curie Bio and Indie Bio scooping them all up? Time will tell.
BRAZEN BREAKDOWN
Stay tuned⌠YC S23 Demo Day is September 6 & 7 and weâll spill some tea in the next issue.
VC CORNER: Negotiation 101
by Scott Alpizar, PhD â Alright, weâre back to our regularly scheduled programming and youâre in for a few weeks centered around negotiating your term sheet with an investor. And I pinky promise weâre going to get to the specifics, but I wanted to take some time to cover the negotiation process as a whole. Before you get too deep into terms, youâll need to have the right mindset.
BRAZEN BREAKDOWN
The first and most critical thing to remember is to always go into your negotiation with a goal. And sure, that goal is to get the money, but it needs to be done in the right way! The real goal is a good deal for both sides. With that in mind, youâre already in good shape. Here a few other ways to approach the process:
Talk to Multiple VCs. Iâm not saying you should walk away from money on the table (in this economy?!), but you should âshop aroundâ to get a sense of what other VCs think about your valuation and terms. Having the opinions of multiple VCs gives you the strongest negotiating position and can give you the opportunity to push for better terms or a higher valuation. But, as Iâve mentioned before, be wary of exclusivity clauses!
Prepare. Itâs mentioned in Venture Deals that âThe single biggest mistake that people make during a negotiation is a lack of preparationâ. If you walk in and donât have your research done and information at the ready, youâre going to end up on the wrong end of a lopsided deal. After all, can you really be TOO prepared? No, you canât. Know. Your. Stuff.
Leverage an Expert. If I havenât said this before, Iâm not a lawyer. And this may be an assumption, but you likely arenât one either. Engage a lawyer who has expertise in VC financings. Theyâll provide the advice you need, and it also helps to show that you arenât totally naĂŻve.
Lead the Charge. It certainly helps to be ready for anything, but you want to make sure that YOU are leading the negotiation. Youâre the face of the company. Follow up if itâs been a while. Explain why youâre pushing for certain terms. It may feel easier to hide behind a lawyer, especially if this is new to you, but theyâre only your backupâitâs on you to make the deal.
Know What to Prioritize. Next time, I promise!
Remember, coming to agreement on a fair term sheet is the goal. Since you likely havenât been through the process before, it may feel like the investor has all the power. This will only be the case if you let it be! Know what youâre working towards, be fair and reasonable, and stand your ground when needed. Overall, if youâre confident in your technology, vision, and team, things will come togetherâyouâll be able to get favorable terms and a new investor/partner
đ BRAZEN SNAX
đ Martin Shkreli is single again. He is now taking applications to date him
đŁ Molecular evidence for how catsâwho hate waterâevolved fish cravings
đ¤ âGagged and blindsidedâ: 50 shades of research misconduct allegations
đš Are polyploid cancer cells an attempt to create a new humanoid species?
đ A new approach for addiction may also help you lose 15% body weight?
â˛ď¸ The fountain of youth discovered in the genes of the naked mole rat?
đ A new snake fear unlocked: woman found with python worm in her brain
đ Billionaire tech mogulâBryan Johnsonâdebuts his new tiny Johnson
đ¤ Weâll continue to make business decisions in the age of AI (until we wonât)
â° TikTokCrak: Gen Z orthopedic surgeon dictating messages đ
đŞ CARVEOUT
We did it first in our 06JUN2023 issue, but you gotta check out Y Combinatorâs video of its Group Partners sharing their WORST INVESTOR MEETINGS (as founders).
đđ˝ A DOSE OF GRATITUDE
We are grateful for Dylan Jatwani, Brazen Intern two summers ago. He is now helping to send students to conferences by leading the nonprofit program Elsaâs Touch.
đ BRAZEN MEME
âď¸ FEEDBACK
Feel free to tweet all thoughts, questions, and insults to us. Bring it. No, really. COMEđđ˝ATđđ˝USđđ˝BRUHđđ˝
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