Here's what people are saying about #DerbySummit16

 

Pitts copy(1)I have to say that I was pleasantly shocked by how the Derby Summit turned out.  I really had no idea that there was so much opportunity even just in the Lexington-Cincinnati- Louisville area.  I’ve lived in Lexington for 13 years now and I’d love to be able to find employment with my degree in this general area after I defend.  However, even thinking aloud about “industry” after 4 years in academia has the tendency to generate looks of incredulity from the people I’m surrounded by, which makes planning difficult!  I told several people this at the event, but this was by far the best resource I’ve ever been presented with in terms of making contacts and finding employment.

The breadth of experience that the Derby Summit brought together was a real eye-opener for me and I came home energized about my prospects and where my PhD might take me.  My only regret is that I didn’t get around to everyone that I wanted to speak to at the networking dinner.  Thank you, thank you, thank you!

-Michelle Pitts, Graduate Research Assistant- D’Orazio Lab, University of Kentucky

 

steven ferrellThe 2016 Derby summit was probably the sixth or seventh conference I have attended so far this year. My professional role and that as US representative for the Scottish Life Sciences Association afford me lots of opportunities to meet and greet and learn where the Life Science industry is headed both regionally and globally.

I can say without reservation that the Derby Summit was by far the most informative and productive conference I have attended.  I have rarely been in a room with so many accomplished professionals who were, to a person, collectively willing to share and collaborate their success, failures, trials and tribulations.

I found Kyle & Co’s ‘unconference’ approach remarkably effective. My experience left me with an indelible impression that Kentucky is not only open for business but fertile ground for healthcare innovation and progressive life science applications. I look forward to attending next year.

– Stephen R. Ferrell, BYTEGRID

KaiaI wanted to thank you again for the amazing workshop KLSC provided this past Thursday. I can honestly say the workshop was THE most helpful informational session I have received on careers, etc in the entire duration of my graduate school experience.

Kaia Hampton, University of Kentucky

 

karine obenI am a fifth-year graduate student. As you can imagine I have attended several career informational sessions and can say without a doubt that the Derby Summit was the most helpful of them all. Thank you for making it possible and hope you continue to do so in the future.

Karine Oben, University of Kentucky

 


Postdoc Now, Think Later

New study argues science Ph.D.s often plan for postdocs without considering whether they’re necessary or beneficial to their career plans. Actual evidence is mixed.

Every postdoctoral fellow has probably heard a “permadoc” joke or two, making light of the increasingly long stints recent Ph.D.s spend in such positions. But has the postdoc become the default for graduates — even for those for whom it doesn’t necessarily make sense? Has it become a holding pattern rather than a bridge to more permanent work?

A new study in Science by two business professors suggests that’s the case and calls for increased attention to career planning among students, mentors, graduate schools and those funding postdocs. That’s not just during graduate school, but before one even applies.

“We find that challenging labor markets encourage rather than discourage students to invest in postdoctoral training,” the study says. “While this seems logical if students are strongly committed to a particular career, it provides an individual-level explanation for why the supply of postdocs does not decrease despite low demand for full-time researchers, potentially contributing to persistent labor market imbalances.”

“Why Pursue the Postdoc Path?” was written by Henry Sauermann, an associate professor of strategic management at Georgia Institute of Technology and a research associate at the National Bureau of Economic Research, and Michael Roach, the J. Thomas and Nancy W. Clark Assistant Professor of Entrepreneurship at Cornell University. For their study, they surveyed nearly 6,000 Ph.D. students, mostly in the natural sciences, at 39 research-intensive U.S. universities in 2010 and again in 2013, after many had graduated. They focused their questions on career goals, information about labor market demand and proxies for ability or talent to see what was — or wasn’t — informing their plans to seek out postdocs.

About 37 percent of the sample were enrolled in the biological or life sciences, 27 percent in engineering, 14 percent in physics, 11 percent in chemistry, and 10 percent in computer science.

In 2010, nearly 80 percent of students in the biological or life sciences planned a postdoc, compared to about half in the other fields. The researchers asked students to ignore job availability and rate the attractiveness of different academic and nonacademic career paths. Students planning a postdoc were more likely to have academic career goals, but were not necessarily looking for research-oriented faculty jobs. And that’s surprising since postdocs aren’t widely considered stepping-stones to non-research-oriented faculty careers.

It seems some misinformation is to blame; 78 percent of respondents in the life sciences and 42 percent in other fields believed that at least one year of postdoc training was required for a Ph.D.-level research and development position in their field. Yet there’s little empirical evidence to suggest that’s true, according to the study.

While limited job availability may discourage Ph.D.s from taking on relatively low-paid postdoc training, poor job markets may also encourage students to pursue a postdoc to boost their chances at finding work. Whatever the case, the study found no systematic relationship between perceived academic job availability and postdoc plans. But students’ beliefs about how many years as a postdoc are required for a full-time position did strongly predict their postdoc plans.

Concerning the influence of ability or talent on postdoc plans, Sauermann and Roach guessed that those with greater talent and therefore a higher likelihood of securing an eventual full-time position faced a lower risk of “wasting” time as a postdoc and would be more likely to plan one. Evidence suggests that might be true. Using three proxies for talent — respondents’ peer-reviewed publications, fellowships from a federal agency and their Ph.D. program’s National Research Council ranking — the researchers determined that life scientists with higher scores were more likely than their peers with lower ones to plan a postdoc. The dynamic was consistent in other fields.

Central to Sauermann and Roach’s argument, 62 percent of life sciences students and 56 percent of their peers in other fields reported having thought about their careers to a great extent, and those who had thought more about their careers were less likely to plan a postdoc — especially in the life sciences. Foreign students who were unsure about whether or not they wanted to stay in the U.S. also were more likely to plan a postdoc.

“This may reflect that many students see a postdoc as the default until they explicitly consider their long-term career paths,” the study says. Interestingly, students’ self-perceptions about their own “persistence” also positively correlated with postdoc plans.

Career Outcomes

Of students who graduated by 2013, 74 percent took a postdoc in the life sciences, compared to 46 percent of those in other disciplines. The most frequent reason for doing so was “A postdoc increases the chance to get my desired job.” Those who hadn’t planned on doing a postdoc in 2010 but took one by 2013 most frequently reported having done so because they experienced difficulty finding another job.

“These patterns suggest that low demand for full-time researchers leads many students to plan postdoc training well before graduation, but also forces some into unplanned postdoc holding patterns afterward,” the paper says. “The observed transitions into postdocs were likely facilitated by plentiful positions, and demand for postdoc trainees may have been particularly strong due to funding from the 2009 American Recovery and Reinvestment Act.”

Some 60 percent of life sciences postdocs said they took the position to obtain a tenure-track faculty job, compared to 51 percent of those in other fields. But just about 40 percent of respondents across disciplines said their single most desired career was a faculty job with a focus on research; the majority preferred other work. Postdocs in the life sciences also were statistically overconfident about their chances of securing tenure-track jobs.

Overall, however, just 4 percent of life sciences postdocs felt a severe lack of information about careers in academic research. They reported having much less knowledge about other kinds of work, though: 21 percent said they severely lacked information about government research jobs, compared to 34 percent for work in established firms, 42 percent for start-ups, and 44 percent for nonresearch careers.

Corresponding figures in other fields are not much lower, “suggesting that a significant share of junior scientists proceeded to the postdoc stage without sufficient information to evaluate nonacademic career options,” the study says.

Some of Sauermann and Roach’s findings parallel those in a major 2014 report from the National Academies arguing for more mentoring and better pay for postdocs. But the new study goes one step further in its conclusion, saying that students shouldn’t just start thinking about their careers early in their academic programs but rather before they enter a Ph.D. program in the first place.

“Doing so may avoid escalating commitment to a research career and prevent individuals from entering a postdoc holding pattern,” the paper says. “Graduate schools may encourage career planning by requiring that applicants analyze different career options and justify why a Ph.D. is the most promising path forward. Funding agencies could implement similar requirements, especially in conjunction with moving a larger share of funding from research grants to training grants and individual fellowships.”

The study also calls for mentors, postdoc offices, professional associations and internships to give students more diverse and overall better information about potential careers.

“Just as importantly, students need to actively access and process the available information and seriously consider the implications for their own careers,” Sauermann and Roach reiterate.

Sauermann said via email that the study wasn’t an argument against Ph.D. education or accepting a postdoc in a challenging academic job market, and that many other structural factors beyond individual career planning — research funding and lab structures, to name a few — are at play. But there’s value in understanding Ph.D.s’ and postdocs’ perspectives, he said, since “individuals are still the ones making certain kinds of decisions that lead them down certain paths.”

“I think that everybody who considers doing a Ph.D. should think about the subsequent steps as well, i.e., the potential need for a postdoc and the possibility of not getting a particular desired job (even with a postdoc),” he added. “Rather than thinking short term and going step by step (‘Let me do the Ph.D. first and then I’ll think about the next step’), long-term career planning is likely to result in better outcomes.”

For example, Sauermann said, a master’s degree may lead someone to work that is just as satisfying as what that person would find with a Ph.D.

Jessica Polka, a postdoctoral research fellow in systems biology at Harvard University, said the analysis rang true with her own experiences at a postdoc.

“I didn’t seriously consider nontraditional careers until after I began my postdoc,” she said. “The decision to do a postdoc in the first place was motivated mostly by an ongoing infatuation with research.” Yet Polka said she agreed fully with the study “that more information presented earlier in training could help junior scientists make strategic career choices.”

-Posted on May 6, 2016 by Colleen Flaherty at www.insidehighered.com. 

Derby Summit Recap: If you didn't attend, here's what you missed.

Life Science professionals from around the world gathered in Northern Kentucky for the annual Derby Partnering Summit, hosted by the Kentucky Life Science Council.  The Derby Partnering Summit addresses the interests of academic and private researchers, entrepreneurs and industry executives, bringing together leaders to encourage collaboration and conversation about removing barriers and developing the industry.

Career Bootcamp and More

This year, the event began with a day for postdocs and emerging entrepreneurs to receive one-on-one mentoring with industry veterans.  Many scientists with advanced degrees have a limited perspective of how to begin a career in the private sector after years of academic research and work in the lab.  Lauren Celano and Josh Henkin, two life science career veterans, helped students understand the job market and establish a plan for networking with industry professionals.

Kaia
Kaia Hampton graduate student at UK

“I can honestly say the workshop was THE most helpful informational session I have received on careers in the entire duration of my graduate school experience,” said Kaia Hampton, a graduate student at the University of Kentucky.

The day ended with a networking event at bioLOGIC’s headquarters in Covington, Ky. Students were able to network with leaders in the biotech industry to discuss strategic issues general to entrepreneurship and those particular to life sciences.

Kyle Keeney, President/CEO of Kentucky Life Sciences Council, is passionate about mentoring programs for students. “Our programs are the only ones where the postdocs and the grad students are invited to network with world-class life science CEOs,” Keeney said. “We’re going out there. We are giving those researchers all the support we can as they work to find the cures.”

Exploring Partnerships

The second day of the conference featured speakers from across the globe as they explored opportunities to work together to build the life science sector and discover cures to chronic diseases that are challenging the healthcare system.

Bob Coughlin President & CEO at MassBio

“As a parent of a child with cystic fibrosis, and speaking on behalf of all patients, we don’t care where a therapy or cure comes from,” said Robert K. Coughlin, president & CEO of MassBio. “We are especially intrigued by the potential of combining a good idea in Kentucky with a good idea in Massachusetts to create a great idea that provides value to patients, the healthcare system, and our respective clusters.”

Turnpike Partnership

The conversation culminated in the launch of the Turnpike Partnership, and effort to redefine the geographic nature of biotech innovation.  The Partnership is an alliance founded by MassBio and Kentucky Life Sciences Council, two regional non-profits focused on advancing the value of life science research for industry and patients. It’s apparent to innovators that collaboration and new partnership models open the doors to biotech’s promise.

The Turnpike Partnership extends biotech collaboration networks into the central United States, where inclusive partnership models emphasize quality research over quality of profits. Turnpike cofounder John Hallinan calls it “innovation without borders.”

Hallinan, MassBio Chief Business Officer, oversees the MassBio Innovation Services program. He has a background in venture financing, corporate development, technology licensing, and mergers and acquisitions. Hallinan currently sits on the Advisory Board of the MA Technology Transfer Center.

John Hallinan Chief Business Officer at MassBio
John Hallinan
Chief Business Officer at MassBio

“There has never been a greater need for collaboration,” said Hallinan. “For industry to do well, we have to work together. This industry will not prosper if we stay in our clusters and let the rest of the network drown due to lack of attention.”

Known for its biologistics industry, Kentucky is ideally situation to intermediate the needs of biotech’s competing powers through a unifying need: access and distribution to patients. Geographically, Kentucky is the center of the US transportation and logistics industries. Home to Senators Mitch McConnell and Rand Paul – the political clout that helped Cambridge flourish in the 1970s is now descending upon Kentucky. It has the potential to empower relationships between far-flung researchers through a clear regulatory environment.

According to Kyle Keeney, Turnpike cofounder and President/CEO of Kentucky Life Sciences Council, “In our partnership model, Massachusetts provides leadership in many ways. But we have to pay attention to the small organisms, the honeybees.”

Kyle Keeney
Turnpike cofounder and President/CEO of KLSC

“Our model pays attention to the pollinators. It mitigates the risk of the Midwest and the Central US turning into a research desert,” said Keeney.

The Derby Summit will continue to grow and is slated to return to Northern Kentucky again next year.

 

 

 

 


A Tale of Two Startup Worlds: Biotech And Tech VC Ecosystems

By Bruce Booth

Startup ecosystems supported by venture capital are defined by dynamism, with the creation, growth, exiting, or failure of new innovative companies conspiring to keep these entrepreneurial landscapes in constant change. Investor returns and sentiment are dramatically impacted by how these events shape and evolve those ecosystems.

Two worlds exist in venture capital, at least from my vantage point: Tech venture capital, largely dominated by the 800-lbs gorilla of software investing, and life science (LS) venture capital, predominantly focused on therapeutic biotech. These worlds largely live in different universes, and attempts to create a unified view default to represent the former given its scale.

Back in 2014, amidst the Tech VC startup explosion, this blog examined some of the critical differences in these two venture worlds, with a focus on the pace of startup formation and how it was balanced against (or not) the “exit” demand for these companies. The “flux” through these ecosystems, a sort of a life-and-death closed system model of VC sectors, was described as a tool to appreciate where sectors were heading. The relative abundance, or scarcity, of investors in these two sectors was a big driver for these ecosystem-level forces (here).

At that time, the Tech VC world was creating and funding companies at a far faster pace than the prevailing exit demand could match, which implied that the ballooning number of startups (and active investors) would eventually derail the sector if exits didn’t increase. That appears to have played out over the past couple years since the post. These days not a week goes by that tech pundits aren’t opining about the unicorn crisis, the softening of the tech startup market, and some version of the coming tech-apocalypse (here, here). Benchmark’s Bill Gurley’s very thoughtful recent postoutlined the real dangers of the unicorn phenomenon, and the potential impact on different stakeholders. Back in 2014, he nailed it in a WSJ interview: “Excessive amounts of capital lead to a lower average fitness.”

On the biotech side, in mid-2014, we were in the midst of a booming exit environment, in particular for IPOs, and valuations were steadily increasing for private companies and new offerings; however, the sector remained reasonably constrained with regard to venture creation and overall funding. Today, although biotech has had a great multi-year run, there’s plenty of anxiety about where we go from here as the NASDAQ Biotech Index is off ~25% for the year (here, here), and more than 35% off from “Peak Biotech” of July 2015. Top line VC funding levels are also off by 20%.

In light of the evolving landscape in these two sectors, it’s worth revisiting the macro ecosystem dynamics, and to explore whether they’ve changed in the past couple years: the supply of new startups, the funding of emerging companies, and the exit demand supporting eventual liquidity.

Supply of new startups

The venture creation disparity between the two sectors remains significant, as depicted in the chart below: just in terms of the numbers of companies, software startup creation remains up 3x+ since 2009-2010, and biotech is flat over the same period.

First time financings_Software-Biotech_May2016

Biotech’s venture creation machinery continues to defy the downstream exit demand in the system, holding steady where it has been since the bottom of 2009, demonstrating remarkable inelasticity of startup supply formation. According to data from Thomson Reuters, as tracked by the PwC/NVCA Moneytree report, in the first quarter of 2016 the sector launched 24 new biotechs with their first venture financings; in 2Q of 2009, the sector created 23. I’ve explored many of the rate limiting aspects of biotech venture creation, and the changes in the model over the past 10 years (here, here), so won’t get into the details with this blog; in short, biotech venture creation remains a highly constrained, rate-limiting process.

In contrast, the “Cambrian explosion” and tech startup “glut” that was emerging in 2014 continued apace for another year into 2015, only cooling off in the last two quarters. Even with the 25% pullback in early 2016, rates of software startup creation are still 2.5x higher than they were 5-6 years ago.

Fundamentally, tech startup creation has a far lower barrier to entry than biotech. A huge pool of potential computer-savvy entrepreneurs enters the workforce every year; coding new software doesn’t require decades of drug R&D experience; and access to seed-stage capital from angels and others is both abundant and straightforward (thanks in part to AngelList). This mix of entrepreneurs, skills, and seed capital has led to an explosion in the number of companies, which has been reinforced by the next key element: burgeoning amounts of growth capital to build/scale those companies.

Funding into emerging companies

Once a startup is up and running, access to capital to grow the business is critical in any sector. This “build” stage is both exciting and fraught with challenge: over-capitalize too early and a startup may fail from the well-known risks of premature scaling (a.k.a. being out over your skis on valuation relative to your story). High burn rates can set companies up for a crash course in down-rounds. But the opposite is also bad: under-capitalize a startup and starvation will prevent its growth. Minor hiccups can then throw cash planning out the window. This is the Goldilocks moment of equity capital efficiency: deploying equity capital in a smart way to create value over time.

Since my 2014 observations of the funding dynamic in these ecosystems, both tech and biotech have changed in some ways, but not in others. The chart below captures the high-level venture funding trends in software and biotech.

Overall VC funding_Software-Biotech_May2016

Tech’s tsunami of new startups was met with prodigious amounts of growth financing from both VCs and public crossover investors; this is the phenomenon Bill Gurley’s recent post described. Focusing on software investing alone, VC funding levels are up nearly 5x since 2009-2010, peaking just under $25B in 2015 (vs $5B in 2010). It’s interesting to note that biotech and software started out in 2009 with similar levels of funding.

Further, this wave of funding has supported a 2-3x increase in the total number of private software companies securing financings each year – a vast increase in the pool of private companies. More capital flowing into more startups at higher valuations (at least for a while) makes for a hyper-competitive environment where it’s often hard to build sustainable companies: lower than average fitness is endemic, or so many tech practitioners believe.

Biotech’s aggregate funding has also moved upward since 2014, but has responded to the attractive exit markets in a more muted way, with annual financing levels up “only” ~75% since 2009-2010.

However, in contrast to tech, the number of biotech companies getting financed hasn’t changed at all: roughly 500 private biotech firms access VC funding each year, and this was true in both 2009-2010 and 2014-2015.  Like the sector’s flat startup pace, the overall numbers of VC-backed biotechs have been remarkably flat over the past five years. One variable that will be interesting to watch is the funding of first financings through the rest of 2016; although the number of new startups is flat, the funding levels (i.e. average size of the initial funding) went up significantly in 2015.

A big driver behind these funding trends is the supply of investors active in each sector. The trends in 2014 on investor numbers and their impact on the startup ecosystems have largely continued (here). In fact, fundraising by VC firms has been off the charts since 2014: nearly $70B has flooded the coffers of VC firms across the industry over the past nine quarters, with 1Q 2016 breaking all records since the dot-com bubble (here). The vast, vast majority of this fundraising is for Tech VC, and supports their expanding numbers. Using the NVCA’s nomenclature of an “active” investor being one that deploys at least $5M into VC-backed rounds in any given year, the chart below captures the trend in both LS and non-LS investor levels.

Number investors_LS and Non-LS_May2016

The number of active (non-LS) Tech investors is now 25% above their pre-2008 financial crisis numbers, and yet LS active investor counts still remain 15% below those pre-crisis levels. This dichotomy reflects a major element of the sectors’ dynamics over the past few years.

For biotech in particular, I’d further argue that the mix of investors underneath the relatively flat line has changed a lot: in the past few years as crossover investors came into the “active” category, many old-guard life science VCs were disappearing – for the net-net effect of appearing flat and stable. So the number of dedicated venture stage investors in life science has probably shrunk even more.

In short, relative funding and investor scarcity is almost always a good thing for a sector’s long run returns. While famine is clearly not optimal, periods of feasting are typically regretted.

Exit demand out of the VC ecosystem

As most readers will know, the overall biotech sector has experienced a multi-year bull run, and the venture component of the sector is no exception: more IPOs, more M&As than any other period in the history of the industry. For more historic context, check out an earlier post on the uniqueness of the recent period (here).

In contrast, tech has seen the IPO window remain very tight; there are plenty of unicorns waiting to storm through the window should it open. The chart below captures the last few years of IPOs in tech (all non-LS categories) and biotech. It’s worth remembering that biotech represents (and has for a decade) only 10-20% of overall venture funding – and yet it’s producing more IPOs than the other 80-90% over the past three years.

number of vc IPOs_May2016

It’s clear from the chart that while Tech IPO markets bounced back in 2010 quickly, they largely stalled out in volume (not value, with offerings like Facebook) and have recently shrunk by 50%. This is tough when weighed against the multi-year explosion in the number of startups.

Biotech IPOs were entirely shut off in 2008-2009, but have reached significant record-breaking heights in 2013-2015. In mid-2000s (pre-crisis), 15-20 biotech IPOs per year was the annual pace. In 2016, despite the market’s volatility, we’re pacing for north of that with ten or so already as of the first week of May.

But IPOs aren’t the only way of exiting the venture ecosystem successfully: the other path is via acquisitions from larger companies in search of new product and pipeline. M&A has been strong in both sectors, and up significantly from 2009. Here’s a chart on the relative mix of exit type between the sectors.

Mix of Exit Types

The mix has definitely changed in biotech over the past decade, due to the increase in IPOs in 2013-2015, rather than a reduction in M&A. In fact, 2015 was likely one of the best M&A years on record for VC-backed deal values, according to HBM Partners (here).

In contrast, the tech exit mix has been relatively constant, dominated by M&A for 11 out of 12 exits across the decade. Most of this tech M&A, though, is for small deals or “acqui-hires”: relatively modest acquisitions of founder-led startups with great teams. The average software M&A value in the past five years was $56M. For comparison, the average biotech M&A was more than 2x larger, at $126M – where most often it’s about buying pipeline (vs teams).

Robust demand for the equity of startups – either by the public markets or by larger companies – is critical to the health of venture ecosystems.

Parting thoughts

Bubbles often form in the illiquid and exciting world of venture capital, and not unlike many asset classes, it typically follows a conventional investment cycle: an initial scarcity of capital channels to the best startups in a sector, healthy and attractive exits occur, lots of capital pours into the space chasing those returns, prices inflate and more companies get created, hypercompetitive markets depress returns, capital flees those areas, and the cycle goes on.

In a perfect equilibrium, capital would match opportunities and investors would achieve their expected and attractive rate of return commensurate to their risk-taking. But that’s not how it works in practice. Instead, the animal spirits of the market typically cycle between overshooting and undershooting the optimal capital allocation – leading to the well appreciated periods of expansion and contraction. Great returns are often made by being countercyclical to this, as captured by Buffett’s famous line about fear and greed (here). It happens in all asset classes, the sectors within them, and domains within those sectors. Certain areas get hot, and capital seeks them out. The hope is that over time these cycles support an “up and to the right” value creation curve.

Biotech is not immune to these cycles, of course. Over the past few years we’ve seen certain areas, like immuno-oncology, gene therapy, and CARTs, get super-hot, and I’m sure bubblicious elements have been a factor in their ascent beyond their important clinical validation and potential. Valuation inflation happens in every cycle, and we definitely saw that in 2014-2015 in particular. As I’ve noted before, a richly-valued biotech either grows into its valuation through pipeline success, or it gets its value reset. Biotech’s public markets have cooled off considerably since peaking in July 2015, at least at a macro sector level. I’m hopeful that the broader investor community will see this recent softening as a re-entry point to tap into the long-term trend in biotech value creation, supported by the seemingly relentless unmet demand for innovation in healthcare.

But stepping back from the current market sentiment, it’s interesting to reflect on the data above and what it says about the healthy or unhealthy levels of “flux” through a venture ecosystem.

Based on the funding flows, exit dynamics, and the numbers of companies, venture-backed biotech looks remarkably robust and healthy as a sector: over the past five years, as a venture ecosystem it has been in relative “steady-state” balance. Since the number of VC-backed private biotechs getting funded each year has largely been constant, it implies that the pace of startup formation must be matched by departures from the system, including both successes (exits) and failures (shutting them down). This healthy steady state balance has helped buoy returns during this period (driven in part by scarcity of great companies), and demonstrated the value of early stage venture investing. Rather limited entrepreneurial pools grow but don’t have to expand hugely beyond their talent depth to staff young companies. The bar for ideas that get funding has remained very high. And early stage investor discipline in startup creation has stayed intact. This is not to say that the sector will remain balanced going forward: if funding flows into early-stage companies dramatically and sustainably increase (as may be hinted at in 2015’s funding levels), this could work its way into dramatically increasing the number of startups and triggering an unbalanced feed-forward investment cycle. Or the opposite could occur: dramatic reductions in funding could starve lots of new and emerging companies. But for now, and over the past few years, a favorable ecosystem equilibrium has been in place.

In contrast, the Tech ecosystem is clearly not in balance. Over the past few years, ballooning numbers of startups, fed with ever increasing amounts of capital, has led to a huge swelling of a bubbly ecosystem. Unfortunately, companies aren’t departing the system at a fast enough rate, either favorably via IPOs or M&As, or via disciplined shutdowns. Closed systems in nature can’t expand forever, and this one appears poised for dramatic changes – as Bill Gurley and many others have pointed out. Just working through the glut of startups, and the likely desperation moves of some, will take time for the tech sector.

Basic laws of supply and demand for ideas, talent, and capital play an important role in shaping all sectors, and right now these dynamics are particularly relevant in venture capital. It will be interesting to see how the next few years play out across the different venture sectors.

Posted on May 9, 2016 by Bruce Booth.

https://lifescivc.com/


Entrepreneurship and the American Idea

How long do you need to plan for that milestone?

Ten years from now, in July 2026, the United States will mark the sestercentennial of the Declaration of Independence. (Spellcheck, by the way, does not recognize “sestercentennial.” And, just for the record, here are equivalent terms suggested by Wikipedia: semiquincentennial, bicenquinquagenary, and quarter-millennial.)

In all seriousness, though, this is a big deal and, thankfully, Phil Auerswald of George Mason University and the National Center for Entrepreneurship and Innovation (NCEI) is on the case. Last month, Phil organized a launch event for 2026.US, an initiative intended to help plan for the sestercentennial celebration. Part of that involves a National Census of Possibilities to engage Americans in planning for the anniversary.

I was fortunate to be able to participate in the launch event at the National Academy of Sciences with people like John Holdren, Donna Harris, and others. You can find a video with excerpts from that event here.

Entrepreneurship and Democracy

For my part, I spoke about two things. First, I talked about the close historical relationship between entrepreneurship and democracy in the United States. This country was founded on the idea of individual liberty, and entrepreneurship has long been recognized as a key vehicle for the expression of that liberty. In many ways, entrepreneurship embodies the same spirit of individual liberty that animated the Declaration of Independence and, later, the Constitution.

Entrepreneurship also reinforces the democratic idea—keeping individual liberty alive means resisting “bigness” and corporatism in both business and government. A democratic republic requires citizens capable of acting independently and solving problems themselves, rather than waiting for others to do so. Entrepreneurship in all its forms—from high-tech startups to local restaurants—embodies this.

Evan Burfield, co-founder of the incubator 1776 in Washington, points out that the year 1776 also witnessed a few other developments pertinent to entrepreneurship:

  • Adam Smith published The Wealth of Nations;
  • Captain James Cook launched his third and final voyage of discovery; and,
  • The first fully developed Watt steam engine went into production.

Intangible Capital and Entrepreneurship

Second, I was asked about the role of capital in American entrepreneurship. When most people talk about capital they mean financial capital, which is clearly necessary for any business to get off the ground and grow. But the United States has such a strong entrepreneurial culture partly because we enjoy high levels of other forms of capital that relate to the American idea.

Ten years ago, the World Bank released a report, Where is the Wealth of Nations?, that tried to tally the levels of various types of wealth across different countries. They found that simply living in the United States makes a person half a million dollars richer, with per capita wealth of $513,000. That wealth is made up of natural capital, produced capital, and, most of all, intangible capital. Intangible capital, moreover, is mostly due to institutions that promote education and the rule of law.

This is important in at least two respects. First, it is no wonder people from all over the world continue to want to immigrate to the United States (even despite political rhetoric!). If you saw the prospect of immediately becoming $500,000 wealthier by coming to live in America, you would bear the burdens and risks of coming here, too. Second, there is a strongly mutual relationship between American democracy and our entrepreneurial economy: our democratic institutions help generate intangible capital, which feeds entrepreneurs, who in turn strengthen our democracy.

Are we perfect? Of course not; not by any means. But as we approach the sestercentennial/quarter-millennial, it’s worth reflecting on the connection between entrepreneurship and democracy, and thinking of innovative ways we can celebrate that. So visit the 2026. US website, contribute to the National Census of Possibilities, and join in the planning.

Posted by Dane Stangler on May 23, 2016.

www.kauffman.org/blogs/growthology

 

 


Life Sciences Orgs Collaborate to Build a Kentucky – Massachusetts Turnpike

Keeney
Keeney

Kentucky Life Science Council and MassBio partner on startup mentoring initiatives

There is a movement developing to redefine the geographic nature of biotech innovation called the Massachusetts Turnpike Partnership. It is an alliance founded by MassBio and Kentucky Life Sciences Council, two regional non-profits focused on advancing the value of life science research for industry and patients.

It’s apparent to innovators that collaboration and new partnership models open the doors to biotech’s promise.  a partnership designed to foster collaboration between the two clusters and accelerate research to benefit patients and the healthcare system. The Turnpike is an extension of MassBio’s MassCONNECT program, which under the leadership of Rakhshita Dhar and Anna Christo, has become a top mentoring program for life science entrepreneurs in Massachusetts.

The Turnpike Partnership extends biotech collaboration networks into the central United States, where inclusive partnership models emphasize quality research over quality of profits.

It is imagined as innovation without borders.

Kentucky life sciences leaders traveled to Cambridge for MassBio’s Annual Meeting last month. Pictured here (l-r): Robert K. Coughlin, President & CEO, MassBio; Kyle Keeney, President & CEO, Kentucky Life Sciences Council; Kris Kimel, founder & CEO, Kentucky Space; Twyman Clements, President, Space Tango; John Hallinan, Chief Business Office, MassBio.
Kentucky life sciences leaders traveled to Cambridge for MassBio’s Annual Meeting last month. Pictured here (l-r): Robert K. Coughlin, President & CEO, MassBio; Kyle Keeney, President & CEO, Kentucky Life Sciences Council; Kris Kimel, founder & CEO, Kentucky Space; Twyman Clements, President, Space Tango; John Hallinan, Chief Business Office, MassBio.

Beyond Borders

There are no knowledge monopolies and innovation goes beyond borders. The complexity of human biology and unmet medical need demands that we embrace collaboration as a way to find and catalyze critical research and development, and we hope this partnership can help to usher in a new model of collaboration in life sciences. We are heartened by the response as a significant number of MassCONNECT mentors and Massachusetts executives have signed on to help with the construction of the Turnpike.

There has never been a greater need for collaboration. For industry to do well, we have to work together. This industry will not prosper if we stay in our clusters and let the rest of the network drown due to lack of attention.

Why Kentucky?

Known for its biologistics industry, Kentucky is ideally situation to intermediate the needs of biotech’s competing powers through a unifying need: access and distribution to patients. Geographically, Kentucky is the center of the U.S. transportation and logistics industries. Kentucky is also home to two influential senators–Senators Mitch McConnell and Rand Paul. The political clout that helped Cambridge flourish in the 1970s is now descending upon Kentucky. It has the potential to empower relationships between far-flung researchers through a clear regulatory environment.

In our partnership model, Massachusetts provides leadership in many ways. But we have to pay attention to the small organisms, the honeybees. Our model pays attention to the pollinators. It mitigates the risk of the Midwest and the Central US turning into a research desert.

Opportunities to Partner

Researchers interested in the Turnpike Partnership were invited to attend the Derby Partnering Summit. Held May 5-7, 2016 in Covington, Ky., the Derby Partnering Summit addressed the interests of academic and private researchers, entrepreneurs and industry executives. The event began with a day for postdocs and emerging entrepreneurs to receive one-on-one mentoring with industry veterans. The second day was focused on industry and regulatory updates. True to the Summit’s banner slogan to “partner with a champion,” the Summit culminated trackside at the 142nd running of the Kentucky Derby.

 

-Kyle Keeney, PhD is president and CEO of Kentucky Life Sciences Council. Keeney is the co-founders of the Kentucky Turnpike.


Last minute event details for #DerbySummit16

KLSC_social_FacebookIt’s hard to believe that the Derby Summit is this week! Here are essential event details to make your time in Northern Kentucky and in Louisville more enjoyable:
 
The Basics
Embassy Suites by Hilton Cincinnati – RiverCenter10 East Rivercenter Boulevard, Covington, Kentucky, 41011 Directions 
Derby Bootcamp starts at 12:30 pm on Thursday and the regular conference starts at 7:30 am on Friday.  The full schedule is on home page of www.derbysummit.com
 
Dress Code
Thursday and Friday – Business casual
Saturday – Your Derby finest
 
Essential Derby Information
 
Derby Forecast
Mostly sunny and warmer. Highs in the mid 70s! (78 to be exact!)
 
Registration
Have friends or colleagues who need to register? There is still a little time. Registration Link
 
Contact Information
Kyle Keeney
 
We are looking forward to seeing you later this week in Northern Kentucky!

New Partnership Responds to Calls for Biotech Industry Resilience, Quest for Cures

turnpike_partnership_portfolioBy

Megan Campbell Smith

Earlier this March, an article in Nature Biotechnology, “Community crystal gazing”, observed the accomplishments, such as increasing profitability and high wages, and the occasional controversies like reproductive cloning, of the biotech sector over the past 20 years. Then, voices from 42 researchers and executives offered a wide perspective on the challenges and opportunities facing the biotech sector. Many heralded a biotech future with increased drug discovery, broader application of biofuels and renewable chemicals, and cost-effectiveness in research to lessen the threat of rising healthcare costs upon the fabric of society.

Other contributors commented on the business of biotech, expectant for improvements in collaboration and entrepreneurialism.

  • Jay Bradner, Novartis Institutes for Biomedical Research, Cambridge, said, “the high hanging fruit is finally within reach” and that ambitious, open frameworks will be needed to overcome the industry’s “false security of protective isolation.”
  • Robert Cook-Deegan, Duke University, Durham, points out that industry and research appear to operate in different eras, and that industry’s “dinosaur-era” ways of commercialization are limiting the potential to “build a more nuanced and more robust theory of innovation.”
  • Jane Osbourn, BioIndustry Association, London, said the sector needs “the right bench strength” in terms entrepreneurs who drive ideas to fruition.
  • Paul Stoffels, Johnson & Johnson, New Brunswick, calls for “engaging with multiple stakeholders, sharing knowledge… and adopting collaborative models” to realize cures.
  • Daphne Zohar, PureTech Health, Cambridge, declares “real innovation is achieved by breaking patterns.”

It’s apparent to innovators that collaboration and new partnership models hold open the doors to biotech’s promise. But there is another, perhaps surprising dimension to consider in the quest for cures: geography.

Geography played a defining role in the growing profitability, referred to in the Nature Biotechnology piece, of the biotech sector over the past 20 years. The consolidation of resources in Cambridge provided economies of scale and bargaining power that lead to corporate success.  But, the density also promoted a culture of fast-followers, focused on competition for profits instead of seeking new breakthroughs in unsuspecting places.

There is a movement developing to redefine the geographic nature of biotech innovation for the next 20 years. Called the Turnpike Partnership, it is an alliance founded by MassBio and Kentucky Life Sciences Council, two regional non-profits focused on advancing the value of life science research for industry and patients. The Turnpike Partnership extends biotech collaboration networks into the central United States, where inclusive partnership models emphasize quality of research over quality of profits. Turnpike co-founder John Hallinan calls it “innovation without borders.”

“There has never been a greater need for collaboration,” says Hallinan. “For this industry to do well, we have to work together. This industry will not prosper if we stay in our clusters and let the rest of the network drown due to lack of attention.”

Renown for its biologistics industry, Kentucky is ideally situated to intermediate the needs of biotech’s competing powers, the distributed and the consolidated, through a unifying need: access and distribution to patients. Geographically, Kentucky is the center of the US transportation and logistics industries. It’s also home to Senators Mitch McConnell and Rand Paul.  The political clout that helped Cambridge flourish in the 1970s is now descending upon Kentucky, where it has the potential to empower relationships between far-flung researchers through a clear and unambiguous regulatory environment.

Kyle Keeney, PhD
Kyle Keeney, PhD

 

According to Kyle Keeney, Turnpike cofounder and president/ CEO of Kentucky Life Sciences Council, “In our partnership model, Massachusetts provides leadership in many ways. But we have to pay attention to the small organisms, the honeybees.”

 

“Our model pays attention to the pollinators. It mitigates the risk of the Midwest and Central US turning into a research desert,” says Keeney.

OPPORTUNITIES TO PARTNER

Researchers who are interested in joining the Turnpike Partnership are invited to attend the Derby Partnering Summit. Held May 5-7, 2016 in Covington, Ky., the Derby Partnering Summit addresses the interests of academic and private researchers, entrepreneurs and industry executives. The event begins with a day for postdocs and emerging entrepreneurs to receive one-on-one mentoring with industry veterans. The second day is focused on industry and regulatory updates. True to the Summit’s banner slogan to “partner with a champion,” the Summit culminates trackside at the 142nd running of the Kentucky Derby.

-Megan Campbell Smith is with The Stella Parallax Consultancy.


First-time CEO credits mentoring for successful launch of Louisville, Ky. biotech firm

As a graduate school startup, Inscope Medical Solutions had access to some of the best business mentors in the world. That access ensured that the company would not only be successful, but would also maintain its Midwest roots.

The company, formed out of the University of Louisville’s entrepreneurship MBA program, worked with regional business mentors to refine its unique offering and advance through a series of collegiate business plan competitions. In May 2015, Inscope Medical Solutions (Inscope) became the second student-run company from Louisville to win the Global Venture Labs Investment Competition.

Inscope was successful because of the passionate team, creative individuals and the influence of mentors from the business community. These industry connections helped encourage a successful transition from academia to the private sector.

Kyle Keeney, PhD
Kyle Keeney, PhD

Kyle Keeney, PhD, founder of the Kentucky Life Sciences Council, says the problem facing early stage biotech companies in the Midwest is that once they get out of academia, they realize there is little understanding in local entrepreneurship circles of what it takes to commercialize a life science innovation.

“It’s hard for them to find local investors with biotech expertise, or connect with commercialization partners,” Keeney said.

The Kentucky Life Sciences Council (KLSC) is a nonprofit organization that helps new leaders in life sciences find qualified mentors early. Keeney believes mentorship will reinvigorate life sciences across the Midwest.

It’s a process, he says, that begins with creating partnerships between companies in the Midwest with capital and commercialization expertise concentrated in Cambridge, Mass.—one of the nation’s most notable biotech hubs. It continues with mentorship through life science professionals, regardless of geographic boundaries, who believe that a viable life sciences ecosystem supports the researchers and entrepreneurs emerging into the innovation pipeline.

“The Inscopes out there are the companies we need to nurture,” Keeney said. “These are the companies formed by creative graduates and passionate researchers. These are the companies that find the cures and save lives.”

THE FIRST-TIME LIFE SCIENCES CEO

Inscope Medical Solution’s OneScope laryngoscope is one of those life-saving innovations Keeney is focused on assisting through mentorship and guidance.

“As you can imagine, there aren’t a lot of mentor options in the life sciences in Kentucky,” said Maggie Galloway, Inscope CEO and cofounder. “Getting connected to the right mentors and networking with Kyle has been really helpful.”

Maggie Galloway
Maggie Galloway

As a first-time CEO, Galloway meets regularly with several mentors who help her address strategic issues general to entrepreneurship and those particular to life sciences.

“At the university-level, mentorship in entrepreneurship was quite strong, but there was not as much support for the life sciences,” said Galloway. “Once I was out of academia, I was able to dedicate a lot more time to mentorship.”

One of Galloway’s mentors, retired life science advisor Henry Kuehn of Louisville, “understands the nuances of running medical device companies, and also understands the challenges that the CEO role brings.”

“Fundraising, for example, is incredibly challenging, and Henry provides an experienced, outside look – a fresh perspective.”

Galloway says she would encourage other professionals looking to get involved in biotech to expand their networks geographically. “I feel like I get tunnel vision about what’s happening in my community, which is quite different from what’s happening in the rest of the world. Get mentors in Boston. Get mentors in California. Expand your network.”

GETTING INVOLVED WITH INDUSTRY

Keeney is passionate about helping researchers and entrepreneurs get involved in life sciences. He is developing a series of hands-on mentoring programs that connect participants with members of KLSC’s Turnpike Partnership, no matter the stage of their idea or venture.

Turnpike members include mentors from MassBio’s MassConnect program and other veteran life science professionals. The next opportunity to match up with mentors is May 5-7 at the Derby Partnering Summit in Covington, Ky. KLSC is hosting a Career Bootcamp on May 5 for postdocs, grad students and others considering a career in industry.

 “The Derby Partnering Summit stands apart from all other networking events because of our commitment to the emerging researchers and entrepreneurs just joining biotech,” Keeney said. “We are the only people in the U.S. connecting people to industry in this way.”

The Career Bootcamp at the Derby Partnering Summit provides practical workshops, small group mentoring, and a networking celebration at Covington’s BioLOGIC incubator.

“Our programs are the only ones where the postdocs and the grad students are invited to network with world-class life science CEOs,” Keeney said. “We’re going out there. We are giving those researchers all the support we can as they work to find the cures.”

-Megan Campbell Smith is with the stella parallax consultancy.

 


How Cambridge became the life sciences capital

cambridge 1If you’ve ever assumed that biotech companies cluster in Cambridge only because they want to be close to Harvard and MIT — well, that’s only part of the story. Scott Kirsner, a columnist with the Boston Globe, explains how Cambridge became the first city in the world to regulate research using genetic material, thus shaping the biotech landscape in Cambridge for years to come. When a Harvard spin-out, Genetics Institute, tried to set up an office in Somerville in 1981, a public hearing aired concerns about rats and roaches carrying newly invented organisms out of the labs and into a nearby supermarket.

Kirsner’s article, How Cambridge became the life sciences capital, is a good summary of the history of the cluster and speaks to the value of taking a long-term view.

We’ll be discussing issues like this and more at the Derby Partnering Summit in early May. The Derby Partnering Summit is a three-day event that brings together students, advocates, entrepreneurs, business leaders, academics and researchers from disciplines across the life sciences industry, including therapeutics, diagnostics, medical devices, healthcare information technology, health and wellness technology, nutrition and agriculture.

For the first time, the Derby Partnering Summit will provide an entire day of networking and mentoring just for life science PhDs, grad students and postdocs.

Kyle Keeney PhD, founder of the Kentucky Life Sciences Council (KLSC) and organizer of the Derby Partnering Summit, is passionate about helping researchers and entrepreneurs get involved in life sciences. More than just recommending that people attend networking events, Keeney is developing a series of hands-on mentoring programs that connect participants with members of KLSC’s Turnpike Partnership, whatever the stage of their idea or venture. Turnpike members include mentors from MassBio’s MassConnect program and other veteran life science professionals. The next opportunity to match up with mentors is at the Derby Summit. KLSC is hosting a Career Bootcamp on May 5 for postdocs, grad students and others considering a career in industry.

“The Derby Partnering Summit stands apart from all other networking events because of our commitment to the emerging researchers and entrepreneurs just joining biotech,” says Keeney. “We are the only people in the US connecting people to industry in this way.” The Career Bootcamp at the Derby Partnering Summit provides practical workshops, small group mentoring, and a networking celebration at Covington’s BioLOGIC incubator. “Our programs are the only ones where the postdocs and the grad students are invited to network with world-class life science CEOs,” says Keeney. He insists, “We’re going out there. We are giving those researchers all the support we can as they work find the cures.”

View the agenda and register today.