Topspin Joins With Accelerate LI to Back Local Biotech Startups
When Accelerate Long Island came together in late 2011, its plan was to start up 10 local life sciences and tech companies with the help of about $1.25 million. Unfortunately, that’s peanuts in the biotech world—which is why it’s called on the area’s biggest VC firm to help.
Accelerate LI, the broad non-profit organization looking to help commercialize the research out of Long Island, NY’s major research institutions, is announcing an alliance today with Long Island’s largest VC firm, Topspin Partners. Through the deal, Topspin’s founder and CEO, Leo Guthart, and managing director Steve Winick, will both join Accelerate LI’s board of directors. The non-profit will also get an office at Topspin’s headquarters in Roslyn, NY.
Just as importantly, though, the alliance will give the startups coming through the Accelerate LI pipeline an avenue to potentially access the type of cash that can really get them going with a Series A, not just seed them with enough cash to get started.
“We are just capital starved out here. We just do not have sources of capital—particularly early-stage capital—in really any amount,” says Accelerate LI executive director Mark Lesko. “Topspin is the 800 pound gorilla, and the notion was why don’t we combine forces with them, and see if we could source some deals on a non-exclusive basis, and try to create companies that have a real chance for success?”
Accelerate LI was formed in late 2011 by presidents of Stonybrook University, Hofstra University, Brookhaven National Laboratory, Cold Spring Harbor Laboratory, and several others, with the idea of creating an overarching, non-profit, regionally-focused organization that could help commercialize the area’s research and spur the development of an entrepreneurial biotech ecosystem on Long Island.
As such, Accelerate LI’s role is meant to be broad: it wants to seed fund startups, mentor prospective entrepreneurs and put them in contact with successful company creators, and bring the entrepreneurial community together with periodic meetings and events. It was backed by a $500,000 grant from the state of New York and a private, $750,000 seed fund started by VC firm Canrock Partners managing director Mark Fasciano called the Long Island Emerging Technologies Fund.
The idea, initially, was for Accelerate LI and the LIETF to each put up matching amounts, up to $100,000 combined, to seed each startup they invested in, and see if that money, in turn, could attract more dollars from local angel investors to syndicate an angel round. Accelerate LI wouldn’t take any equity for the grant money it would give to a startup, but that cash would convert to debt if a startup were to leave New York state. Any private investor cash, on the other hand, would be at the cost of equity in the startup.
As Lesko explains, however, the thinking has changed a bit. After meeting with more than 150 Long Island startups over the past year, Accelerate LI found that 70 percent of the ones it views as investment candidates have been life sciences companies. That’s problematic, because compared to tech startups, biotechs need … Next Page »