Flagship VentureLabs, Creating and Spinning Out Cleantech and Life Sciences Startups for 10 Years, Takes the Veil Off

2/17/11Follow @xconomy

A number of innovative cleantech and life sciences startups we’ve written about have been funded and staffed by Cambridge, MA-based Flagship Ventures. But not all of these companies made traditional pitches to Flagship like they would any other investor. A large chunk of the firm’s portfolio includes companies that have been created, developed, and incubated directly at the firm, in a program called Flagship VentureLabs.

“It’s an activity we’ve done somewhat quietly and consistently for 10 years,” says Flagship Ventures co-founder, CEO, and managing partner Noubar Afeyan. But now the firm is being a bit more vocal on this aspect of its business, by more explicitly advertising Flagship VentureLabs as a differentiating feature of the firm, on its newly revamped website.

Flagship VentureLabs has created 24 companies in the life sciences and cleantech sectors, several of which have gone public, been acquired, or risen to notable success. Many of the names are well-known in the Boston life sciences and cleantech communities and beyond (more on that below).

“Our team are the founders, inventors of the technology, and play the initial management role in conceiving and launching the company,” says Afeyan. Ideas can come from Flagship members, outside academics, and from studying the intersection of technologies within existing portfolio companies, he says.

“We can launch a company, fill one unmet need, and in the process create another unmet need,” says Afeyan (an Xconomist). “That is another opportunity.”

Unlike other startup incubator programs, VentureLabs is looking more to academics than seasoned entrepreneurs to generate the ideas that will become portfolio companies. For the time that the startups are in VentureLabs—a period that can be as short as three to six months and as long as two years—the firm works on protecting and vetting the technology and business model, Afeyan says.

“We’re thinking about asking tough questions early in the company’s life,” says Afeyan.

As any venture incubator would, Flagship provides cash to companies as they develop in VentureLabs, but it also “attracts a syndicate of other investors,” Afeyan says. The firm has invested about $200 million in VentureLabs companies, which have raised roughly another … Next Page »

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