Life science + investment - it's people that make the partnership!

The question often comes up whether a VC team such as AmorChem invests essentially in technology, or technology and people, and to cut a long story short, well, it has to be more than a little of both. Sure, there are probably less typical examples where it may have been the technology primarily, or in an even rarer example,  fundamentally based on the future potential of a given individual, but routinely there simply has to be a solid (business) marriage between investor and inventor, notwithstanding the technology they discovered or invented. 

Marriage is not a bad analogy in fact, because how readily do we marry someone who may have very attractive financial resources that will provide a comfortable future, but with whom something just doesn't feel right? It does happen of course, but we all know how that usually turns out! Conversely, how readily do we marry someone who may be extremely engaging and charming, but perhaps is free of the drive (or burden?!) to succeed, and has no clear plan in life other than enjoying the moment - is that what we are looking for? One tends to be drawn towards opportunities or people with the right mix of current potential combined with a capacity to contribute to a mutually productive relationship; that is fundamental in both business and personal partnerships, methinks. 

Mistakes do get made, of course, but we usually end up paying for them, while hopefully learning from them afterwards. When one invests in a technology the "old-fashioned way" in life science, it usually means starting up a biotech company that gets built around the discoverer, who is almost always a university professor. Typically, that individual keeps their university post while helping to steer the ship and new venture through the inevitable troubled waters that face any entrepreneur fresh out of the gate. But the key point is that additionally, by seeming necessity, a senior management team is also added in, full-time, to at least in theory give some comfort to the VC investors who stuck their neck out on a particular technology. 

While this approach may have fared better in the USA, not least due to there being broader landscape and deeper pockets south of the border, by and large in Quebec, it failed a lot of the time. Now, yes, some of that was totally natural attrition in that not every brilliant idea turns out to be a commercially viable brilliant idea, and science has a nasty way of kicking us in the pants just when we thought we got it figured out - but the set-up and system also failed. If you listened to the post-mortem analysis, it became more or less normal for the business end to blame the science, and the science end to blame the management. 

There was undeniable lack of unity in many local biotechs, not just between scientific vision and upper management's business style, but perhaps more importantly, between boards and management, and even among investor syndicates who were playing in the space, often in multiple local companies at the same time. Squabbling on the board of one particular biotech would apparently often lead to a continuation of the squabble on the board of another biotech where the same parties were represented by the same faces. It wasn't particularly healthy, and in some cases it buried some companies, either prematurely or eventually. There was little discernible unity or "partnership" involved at all it seems, looking back today. 

That is all in the past, and thankfully so, but it serves to illustrate why AmorChem raised a fund that with great intent invests in technologies that are currently resident in universities/research centres, and keeps them there for the duration of the project. This definitely removes the potential for many of the previous problems involving disparate groups of individuals seemingly competing against each other to ensure that their vision (agenda?) was executed, even at the expense of another. However, it leaves one particular individual front and centre, and alone, as the primary connection between technology and investment - the CSO (biotech) or professor (university). 

One of the biggest challenges in this early-stage investing is not so much in judging on the scientific merit of what is going on, because in the case of AmorChem, we think we are pretty good at that, being a team of seasoned scientists ourselves, having worked in academia, biotech and big pharma. Rather, the biggest conundrum may be in gauging how good a fit a particular scientific personality may be with us, and how solid a marriage it could become. Our end of the spectrum stays the same in every investment, but university professors are hardly a bland or unvarying phenotype, so we have to examine every case individually. The question of whether someone is going to be easy to work with or potentially be the source of serious headaches is neither a trivial concern nor one that can be ignored. 

Now don't get me wrong - our "marriages" tend to be temporary in that they typically last only two years or so, so we don't all have to be in love all of the time or for a very long time for that matter - but it helps if we all like each other enough to remain on the same page in terms of carrying the technology through to a commercial inflection point. It's a tough business with its fair share of ups and downs and experimental disappointments, and failing together is still a lot more pleasant than failing amid inner turmoil. Having a willing and collaborative scientific partner is the key to our success, and we look for that prior to any investment. 

That the CSO role was a somewhat troubled one in the typical biotech company was often simply due to an almost predictable clash of cultures between a big time science star and various business people who were primarily concerned with making money, and who usually didn't understand the science that was supposed to be making that money. In at least some cases, it was like investing in a car factory by people who had never actually been involved in building a car, and just like drug discovery and development, it truly helps when you have been-there-done-that! 

In AmorChem's case, we think it's a major advantage that we do get the science - we have to, if we are to invest in it - and given that we are not a biotech based around just one technology (with the pressure that comes with that) but have a portfolio of some 25 ongoing projects, we hope that we are a better buffer between the ideals of the ivory tower and the realities of the business and pharmaceutical worlds. We like to empower the scientists to do what they do best, in a targeted fashion that fits us, while we focus on what is our job, which is to further develop and commercialise technologies that we invest in. 

You can be sure that our 25 investments involve a pretty wide spectrum of varied and colourful personalities, not all of whom may have found the transition into working with a VC fund for the first time such an easy concept. But like any marriage, it is about being willing to communicate, to listen, to understand the needs of the other party, and to adjust and/or compromise, by both sides,  that collectively leads to the most productive union possible. We strive to achieve that balance as much as is practical, while never wavering from the ticking clock and the desire to remain on track and on target in all of our programs.

So, do people matter? Of course they do, and there is no one-size-fits-all when it comes to investing in and commercialising university research, but we like to see truly exciting technologies coupled with individuals in whom we see an equally exciting path forward, together, and so there is always an element of investing in a given individual who comes to us with a candidate technology. Like any kind of partnership, a good fit is half the battle, and when you like working together, that can only increase the chances of a positive outcome! 

Speaking of partnership, and marriage, and compromise, a certain someone just raised their eyebrows about my face still being stuck in a computer after a day in the office, so in my own best interests, I think I will leave it at that and sign off right now - until next time! :)