Today we’re announcing NFX Bio, a new NFX fund initiative led by some of biotech’s most successful Scientist-Founders.
Funding in early-stage bio startups is broken. It’s unacceptable that the typical practice in the bio startup ecosystem is to push aside the scientist and replace her or him with suits.
NFX Bio is here to fund Scientist-Founders and support them in learning how to be entrepreneurs.
We bring the full power of a large platform venture capital firm to pre-seed and seed-stage bio startups. We’ve been Scientist-Founders ourselves, so you’re getting people who have been in your shoes. We know how nearly every element of your business works. We also know the right people to connect you to. We can save you years of effort. And because we know the science, we can make decisions quickly and prefer to lead investments. From idea to IPO, we’ve been there.
We believe the time for the Scientist-Founder is now. And we believe that the next significant phase of human progress is going to be led by these Scientist-Founders who build info-tech powered bio companies.
NFX Bio is led by Omri Amirav Drory, Ph.D., Founder/CEO of Genome Compiler, acquired by Twist Bioscience. Joining him on the Investment Committee is Emily LeProust, Ph.D., Co-Founder & CEO of Twist Bioscience (TWST – NASDAQ), as well as NFX GP’s James Currier and Gigi Levy-Weiss.
In this closed-door conversation, Omri, Emily, and James break down what they’re looking for, and what Scientists need to master in order to be CEOs.
Omri Amirav Drory, Ph.D.: What we need to realize is that biology is the most advanced technology on earth. It’s nanotechnology that actually works. It’s been around for at least 4 billion years. It scales. You can see biology from space. All the air we breathe comes from biology. All the food we eat comes from biology. Everything we care about comes from biology.
Right now it’s at the intersection of many technologies that are going up exponentially in their capability. DNA synthesis, DNA sequencing, computation, automation. It’s all coming together right now. You have a chance to impact the biggest markets and the most important markets. You can help people. You can cure people. You can feed people. You can provide for people.
Emily LeProust, Ph.D.: In the ’50s, you wanted to be in aeronautics. In the ’60s, in semiconductors. In the ’70s and ’80s, in computers. In the ’90s, in software. In 2000, you had to be in mobile. This is the decade of biology.
Biology has been so hard for so long. It took a lot of time to get somewhere. Before today, it was so expensive that you could only apply biology to drug development which is remarkably profitable when it works. Now, because of the lower cost of sequencing, lower cost of synthesis, because of automation and computing, you can do biology at a much lower cost. What that means is that the number of opportunities is much broader than just drugs. Right now we are living in the era of biology. It is the place to be.
James Currier: The last 50 years have been about software, but the next 50 years will be about bio. In particular, the great startups will be about the combination of information technology and bio. The costs have come down so much that now we can address many different industries and progress with bio like we never could before.
Drory: For early-stage bio startups, there’s not a lot of capital, especially for those companies that are both tech and bio. Right now if you’re a scientist and you want to commercialize your technology, you have very few options. You can go to a few incubators that will take a lot of your equity, or just recently some accelerators that specifically focus on bio. But to really get your IP out there to see if it actually works, to get the proof of concept, you need a few million dollars. And it’s hard to find.
NFX Bio wants to change this.
We like to invest in teams with a core technology, especially a core biological technology. And one where that IP allows them to create many applications, not just one small molecule for one application. We want something that helps you create a lot of different diagnostics, a lot of different therapies. We consider those companies that have an opportunity to build a platform. That’s our focus.
Currier: Traditionally there have been companies that got quite big by just doing one therapy or one other type of application. But increasingly, because information technology is becoming more a part of the core technology infrastructure of these companies, you can now start to spread the core bio IP across multiple use cases.
Consider this: The COVID-19 vaccine was designed in just 2 days but it took a year to approve and begin distribution. Biotech does not yet scale at the speed of software… but it can… when it becomes “tech-bio,” as much software as bio.
By combining software/data tech with biology, and by architecting businesses with a platform approach, a whole new future of possibilities is unlocked.
Drory: There are many examples. If you look at some recent and very interesting examples, like Moderna, they have a core mRNA in their technology. They’re using it to create not just one vaccine, but many vaccines. They can also produce a vaccine for cancers and other things. This is the kind of company we like.
Or like Mammoth Biosciences, where they have core IP around Cas14 and Cas-phi, and other Cas systems that can be used for many types of diagnostics and many types of therapeutics. Mammoth is a textbook platform company.
A case study for how a biotech company like Mammoth fits into our investment philosophy in network effects businesses — and how companies from traditionally analogue industries like biotech are increasingly starting to resemble tech companies.
Mammoth aims to be a true platform — a technology company on which other independent businesses can be built.
LeProust: First, investors should do no harm. After that, it’s mainly about helping tell the story, helping with fundraising, helping with hiring, helping with introductions to the right follow-up investors, helping set up the scientific advisory board, which is very important for companies in our industry.
Once you’ve built a company once, there are a lot of things that sound difficult or insurmountable for Founders that are actually easy. It’s happened many times, where we spent five minutes with a Founder, and we know that we’ve saved him or her a month of work. Just because, having done it before, we can offer some very quick pointers that save time. That’s magic.
Drory: Also, psychological help for the Founders. We’ve been there, so we know how hard it is. Just supporting them, never getting frazzled, understanding the journey they’re going through. We’ve been there. We understand what you’re going through, and we’ll support you.
What we are aiming to achieve is to be the kind of investors we wish we had. Because the problem with our industry, what we call tech bio, is that if you go to tech investors, you’re the bio company. If you go to bio investors, then you’re too much tech for them. You want the investor that really understands this as a new industry.
You want investors that have the Venn diagram that we share. Being academics, we understand the science. We’ve been operators too, so we know the pain you’re going through. We’ve been in the trenches. And we’ve scaled companies, in Emily’s case, to $10 billion. We know what it means. As investors, we can make our minds up quickly. We are leading rounds, and then we just help you be as successful as possible.
NFX Bio has already invested in leading bio-platforms, like:
LeProust: In order to be a great scientist, you have to be fully grounded in reality. You need to make sure that all your data is perfect. You have to sweat the details because your papers are going to be peer-reviewed. That’s the scientist’s life.
To be a great Founder, you need to make a mental transition to deal well into the future. Where things aren’t proven. Things are potentials, possibilities. You have to become comfortable leading people into an unknown future, rather than reporting on what’s already been done.
Drory: While getting a Ph.D., you learn how to learn, and that’s very applicable to being a Founder.
As a scientist, first, you have to learn new methods all the time. Second, you learn how to design scientific experiments and learn from them. Third, especially in biology, you learn how to fail, and pick yourself up and try again. That’s what you do again and again in the lab, but you still have this optimism and grit that in five years you will get your Ph.D. This mindset, this practice, this faith in yourself translates very well to entrepreneurship.
As a Scientist-Founder, you might have the personality to be the Chief Science Officer, Chief Technology Officer, or Chief Operating Officer, or some other part of a founding team. You don’t have to be the CEO of a company. You could also be a Founder.
LeProust: To be a great CEO, you need to love selling an idea. If you don’t like that sales process of selling an idea, then you’re not going to enjoy the life of a CEO. You need a vision that you can sell. You have to bring people onto your vision. You have to sell that idea.
Currier: That vision is a little less precise than the actual science that’s behind the vision. You have to be comfortable with both languages, communicating in both ways.
LeProust: There is a similarity between scientists and CEOs. They are not daunted by the impossible. To be a scientist, you know you have to push the boundaries. You have to set yourself a goal that almost sounds impossible from the outside.
It’s the same with an entrepreneur. When you go out there, you’re trying to build something that has not been done before.
Drory: We’re using the term “tech bio” instead of “biotech” because we think we’re moving from traditional biotech to more technology and biology.
Information technology combined with bio.
It’s driven mainly by three forces:
LeProust: The market, the technology, and the people. We want a Founder that is going after a very big market. We get excited by technology that is being developed to make a better mousetrap to go after big markets. Then ultimately one very important part is the founding team and the culture that it creates in the company.
The three questions that we’ll ask you:
LeProust: It’s interesting because when you’re a scientist, you want everything based in fact. But the first time you sit down with an investor, they ask you, “Tell me your story.” They are actually looking for a story.
Make sure that you can articulate a story that will get people excited to partner with you. You need to cover the market, the technology, and the people. But it’s not about a business plan. Nobody cares. People just want to be emotionally involved in the story. Investors have a lot of opportunities. They actually want to do something exciting and new, too.
Storytelling has to be in person, one-on-one, even though Zoom is fine. Nobody’s going to invest in a one-pager. However, you do need that, the one-pagers, to hook people to get the meeting.
The best, or maybe the only way to really pitch your idea, is in person. You cannot cold call an investor. You need to find a way to get a warm introduction. You need to find someone that’s going to get you in the door, someone that’s going to put you on the top of the pile. Go through your network and get that warm introduction.
Drory: You want to start a company ideally after you peer-reviewed your research and you know that the basic biology works before you go around and try to develop it. You also want to be in the development cycle, because especially with biology, the research might take anywhere between a month to forever.
We’ve been helping many companies spin the IP out of universities. We’ve helped companies very early on when the team was not complete, and they needed a CEO or a Chief Business Officer. Obviously, the more proof points you have, the easier it is.
We’re investing in all stages of seed. Pre-seed, when it’s just the scientist with the idea. Seed, when the entire team is there and they need some help, maybe to get the IP out and get the proof point for the Series A round. We even do early A’s.
Drory: Covid has shown the world how important it is to invest in things like therapeutics and vaccines.
Every startup we invest in really matters. They help heal people with therapeutic diagnostics, help feed people with agriculture and food, and help support people with renewable chemicals and materials. And it’s not just impact investing, we are talking about the biggest markets in the world. Biotech is food, agriculture, materials, energy, technology. They’re all coming together.
LeProust: No offense to Google, but it’s a lot more exciting to work on some DNA-based technology instead of autofill technology or ads optimization.
As Founders ourselves, we respect your time. That’s why we built BriefLink, a new software tool that minimizes the upfront time of getting the VC meeting. Simply tell us about your company in 9 easy questions, and you’ll hear from us if it’s a fit.