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to $5 million. Stanford also dug into its ample coffers to cofound a small investment fund with StartX. Dubbed the Stanford-StartX Fund, it has spread $18 million across 58 investments so far. About one third of the deals and dollars have gone to StartX Med companies.
When I toured StartX-QB3 Labs last week, the new facility had one occupant: Nirmidas Biotech, which is based on work by Stanford professor Hongjie Dai. The company has created a gold nanofilm that coats run-of-the-mill research equipment, like microarray slides, and amplifies signals. The idea is to give researchers much more sensitive readouts that potentially detect the presence of pathogens or biological molecules that would otherwise go unnoticed.
Nirmidas, which already has a CEO, a director of R&D, and $2 million in seed funding from the Stanford-StartX Fund and other sources, will be at the “biggest end of the spectrum” of lab occupants, said Lee.
Lee is adamant that StartX Med is an accelerator, not an incubator. While typical QB3 residents might stay for years, he sees StartX-QB3 Lab as more of a “launching pad.” But every company moving in, whether StartX Med participants or not, gets one year guaranteed with the potential to renew for six months at a time after that.
Ideally, lab occupants would be working with seed funding to do a specific experiment or project that will give funders a clearer sense of their technology’s viability. “That’s the demographic we’re shooting for,” says Lee.
It’s a stepwise research model that traditional early-stage biotech venture firms are turning to as they search for ways to invest more efficiently, even when they are funding seasoned entrepreneurs. And incubators (or accelerators) in urban biotech clusters are increasingly providing that temporary space. In May, the Janssen Labs arm of Johnson & Johnson (NYSE: JNJ) announced plans to open a 30,000 square foot incubator in South San Francisco.
It wouldn’t be a surprise if more biomedical incubators spring up in Silicon Valley in the coming months. Bay Area real estate prices are out of reach for cash-strapped startups, while a new generation of life science researchers are more comfortable with an open-source and sharing-economy ethos.
There are other advantages to building facilities closer to the scientists who might use them, too. Nirmidas moved from QB3@953 in San Francisco, and now it’s a ten-minute bike ride from its scientific founder’s lab.
Alex Lash is Xconomy's National Biotech Editor. He is based in San Francisco.