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succeed and ultimately to help build a local biotech scene that has some staying power? I spoke to Le about Accelerator’s plans, and how the New York life sciences scene can overcome the obstacles of high prices and the lack of lab space that have limited its development in the past. Here are some edited excerpts from that conversation.
Xconomy: When you stepped in as CEO of Accelerator last year, what was the first thing you wanted to change?
Thong Le: I sat down with the team and with the investors, stepped back and looked at the investments we did, and the strategy we adopted, [and asked if] that was still relevant for the way we do things on a go-forward basis. Originally, Accelerator was begun with the notion that it would help commercialize technologies that came out of [Leroy Hood’s Institute for Systems Biology]. It evolved quite a bit. That’s why you find now we’ve got a broader number of partnerships both in Seattle [and New York]. So really tightening the relationships there so we can really leverage and then help them with regards to commercialization. And then obviously I spent a fair amount of time continuing the job [of] fundraising, and really trying to figure out if we could build out an investor base that could be helpful to us.
X: What’s been the most challenging part of that job so far?
TL: [First], finding people who still have a genuine interest in investing at that [early] stage of the game. Secondly, it’s always a challenge answering that question of, ‘well what’s the performance of Accelerator been?’ And to be honest, to some extent I inherit some of what I’m stepping into, because I certainly wasn’t running the operation there and investments were already made by the time I stepped in. Whenever you enter a situation like that, you try to do the best of what you’ve got there. With regards to the 12 companies we’ve funded, I think there will be some winners. We’ve had a few successes now, but by and large we still have a number of companies in the portfolio that frankly are still private, and are still operating, and the jury is going to be out as to where they end up, and what their outcome is going to ultimately be, in terms of returns for investors.
X: What’s been the biggest problem? What have you struggled with?
TL: When Accelerator was started, the initial notion was that one could finance really big ideas where either the proof-of-concept was really thin, or conceptual, and then one could [do that proof-of-concept work], and then go and successfully raise a much larger round of financing, like a big Series B round. That [round] could then support the execution of that platform or that concept, into something that was much more real. The investing environment is very much different now. Investors over the years have had mixed success in investing in big-idea companies, and I also think frankly the number of individuals and the number of firms that can actually successfully pull off that variability—where you can take a big idea, and you can build the right resources around it to make it happen—there are a very small number of people that can do that well.
X: So how will Accelerator change its model?
TL: Tracing back to 2003 when we started, a lot of things that were invested in were really light or absent in terms of actually having real scientific proof-of-concept behind them, but the ideas were certainly exciting. Moving forward, we may go after some of these bigger ideas, but we will certainly be a little more diligent and rigorous about having stronger data before we make the investments in these companies. Certainly now with the syndicate we have, we have the wherewithal to carry these companies pretty far and be able to provide them with the financing that they need, but I think we have to be a lot more targeted about what we do. If you’re trying to define what your exit is going to be, or where the next financial milestone is going to be, you have to be a lot more disciplined.
X: What types of companies will you be investing in now?
TL: The overall strategy is definitely going to be different. Let’s say there are 12 deals we might do. We’re not going to say that like three fourths of those deals are going to be … Next Page »