Seattle Needs an “Incubator” Culture
If Seattle is to occupy a future place of dominance in the biotech world, it must foster more of an “incubator” culture. There is a “valley of death” between the well-funded labs of academia and private venture funding that is difficult to cross.
The National Institutes of Health funds non-profit institutions like universities for fundamental research. Whereas private venture dollars migrate towards technology that has already been proven to a level far beyond what is common in a university lab. So how does one raise capital to take technology from the lab to a venture fundable stage?
Attempting to bridge the chasm are things like federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants but they realistically take 12+ months to get, require an institutional affiliation, and “virtual companies” are ineligible—what madness! The reason my company would apply for such a grant is because we are a “virtual company” and need pay for early data generation (read: lab space and reagents). Even if I was willing to stomach the bureaucracy, and wait more than a year for a modest chance at getting the grant (which I’m not), we’d be ineligible anyway.
Washington’s own Life Sciences Discovery Fund (LSDF) seems to have recognized this problem and offers “commercialization grants” of up to $150,000. However, they only offer the grants to non-profits (last year 100 percent of them went to the University of Washington). I’ve been told that it is unconstitutional for the LSDF to give money to companies (our state prohibits direct investment into companies). It seems counterproductive as a strategy however, given that non-profits don’t commercialize things—companies do. It’s the entrepreneurs that take ideas from labs and build companies around them and unfortunately they are a group the state is explicitly not helping.
Seattle has a great angel investor scene, but few angels in the main networks feel qualified to be investing in early stage life science companies.
The only organization in Seattle that I’m aware of that addresses this need is the venture backed Accelerator Corporation. They provide funding, lab space, and business support for early stage startups. However, on average, they take on two to three companies a year—hardly enough to support the future of Seattle’s biotech empire by itself.
In our case we’ve had to turn to San Francisco … Next Page »