July 10, 2020

Biotech in Los Angeles and how should founders not in health tech industry raise during COVID, by David Whelan.

Biotech in Los Angeles and how should founders not in health tech industry raise during COVID, by David Whelan.

In this episode of Fundraising Radio David Whelan, the CEO of BioscienceLA explains how founders working in bioscience and health tech can use this pandemic to their advantage during their fundraising and how other founders should adjust.

BioscienceLA: https://biosciencela.org/

David's Twitter: twitter.com/djwhelan

In this episode of Fundraising Radio David Whelan, the CEO of BioscienceLA explains how founders working in bioscience and health tech can use this pandemic to their advantage during their fundraising and how other founders should adjust.

BioscienceLA: https://biosciencela.org/

David's Twitter: twitter.com/djwhelan 

 


Transcript

and today's guest speak will have day when they see you add bio science only and this app is we'll talk about the same thing we talked about in the previous morning so I'll have to re record that 

part. 

That was a weird phrase, though. It was a really weird phrase. I'm doing my best here. Alright. Let's focus. All right, this is fun. 

Reason radio and today's guest speak at five sites Ellie, and this episode will talk about bio science and live tap again. 

And how founders working in these field can surely profit somehow from it, and how they can help themselves fundraise because of this dynamic. So deep a Laskey called by you giving us some background on yourself. And on bio science. 

Sure, thank you so much. Constantine. Thanks. Thanks for having me, so just just really quickly. 

My my background, 

I, 

I call myself a technologist who became a business person who became a health tech business person over over a number of years kind of almost accidentally fell into healthcare and a health tech. 

But I've been in Los Angeles for the past twenty years after getting my my MBA and have really focused on what I call the intersection of technology, 

health and wellness over much of that time from wearables to genomics,
to cancer diagnostics to the consumer health data to enterprise health data. 

Really? All about how do you, how do you leverage data to help individuals whether it's positions or patients or consumers make make better health decisions? 

And I've been building organizations and ecosystems,
kind of across the country,
even around the world a little bit,
and always coming back to Los Angeles and wanting to do I wanted to do more here, wanted to build build more here because the potential is huge. 

And so I, I joined joined by a science as its first permanent just a few months ago. My first day was actually on Monday, March, sixteen, th, which was sort of a moment to stay here. 

And here in Los Angeles, and in California, with with, with pandemic on us, and. Very quickly our, our role with our goal with bio science L. A. 

is to be an independent really innovation catalyst innovation accelerator for life sciences and health tech across, across a growing funding growing space growing talent. Really? 
Growing the profile of the industry got it. So, what exactly does by assigned to we do. 
Yeah, 
good, 

good question since a lot of that is in some way some way it's still information, 

but, 

you know, 

again, 

as as an independent independent nonprofit, 

we're really here to represent the region to grow the region and basically support every state stakeholder whether that's a large company like Amgen or a large 

institution, 

like a senior Sinai, 

or down to a single person startup in a in a lab garage, 

working on, 

working on the next, 

next technology and so, 

again, 

looking at. 

I, I call these three primary levers of funding space and technology. Where we're focusing on, how can we help startups entrepreneurs growing companies connect to investment funding of all kinds. 

How can we help investors understand what kinds of companies and technologies are out there? How do we help those help? 

Those companies get connected to new better spaces to grow, which is part of the emerging growth of wet lab spaces here in Los Angeles. 

Co, 

working space is focused on the healthcare industry and then focusing on growing talent is a third area, 

which is everything from building leadership development programs to working on workforce training programs that can help someone at the entry level. 

And get the skills, they need to eventually get to a job as a say, a a lab tech or a production engineer, or something like that. 

And so again, our role is really to catalyze the whole region by collaborating with other events organizations that are out there. 
Collaborating with funding organizations and in particular collaborating with, with research organizations, both academic and healthcare got it. 

So let's go kind of step by step so that everyone understand the process and everyone can feel how this works. So, first step is find the startup right? That you will introduce to the investors, how do you find those start ups how do you source the deals? 

Yeah. So it's it's sort of it's very much a two way street. So, I will say, in some ways we want we want them to seek us out as much as where we're seeking them out in my in my role. 

This is very much, almost a continuation or an evolution of what I've been doing for many years. 

I spend a lot of time, well, also out out there, networking in meetings, which used to be face to face and has now been very virtual, but I've spent a lot of time on on phone calls on on zooms. Really? 

Talking to talking to. Entrepreneur is talking to research organizations, talking to other connectors in the, in the industry and ecosystem here. And the goal is just to understand. 

Understand who's doing what understand where the high potential opportunities are and then when it makes sense helping, 

helping to connect the dots and sometimes that says as high level as we've got on the bio science l a website. 

We have a list of resources, both both funders and spaces, and even accelerator programs, things like that. So, sometimes it's really just pointing people to some of the resources that are that are out there. Other times. 

It's, you know, based on specific technologies where I might have some. 

I might have some experience might have some knowledge, or just I I know the right person to talk to. I, I like to be that connector that helps to helps to introduce the the right right people the right haves with the right. 

One thing you could say, got it, and by the way, I'll definitely leave a link to bio science in the description of this episode. So if anyone wants to check out those resources, you should definitely click the link. 

So,
let's talk about life science, health here in biotech right now, 

because this field is probably one of the ones that are in Super high demand now because of this should founders working in those fields actually use it to their advantage to what should they do how should they emphasize this 

fact to investors? 

Yeah, so, absolutely. I will say if you're first of all life sciences, health tech in general has been growing faster than the economy for, for many years in, in, in L. A. 

in the US, and, you know, in much of the world, the entire healthcare economy tends to be one of the largest, if not the largest sectors of the economy that we're already talking about a big, a big space in general. 
When you kinda drill down into life sciences technologies, health technologies that say that a subset of that but it, it has been growing quickly, especially in newer areas. Like. 

Digital health, telemedicine, genomics, things like that. And then,
as you mentioned accelerating,
even more, 

or the importance has accelerated even more, 

certainly over the past few months with that with covet nineteen and sort of both responses to that as well as proposed future solutions. 

And so this is absolutely a great time to be in, in, in healthcare and health technology. 

What the interesting kind of opportunity to also challenge is that there there's been almost almost I'll say too much of too much of an emphasis on 

every solution connecting to covet nineteen. 

In some way. I hear investors who are sort of very focused on on code nineteen. 

I, 

I hear entrepreneurs who we're working on, 

maybe a cancer diagnostic, 

or or something like that, 

and suddenly are working on working on cover nineteen and I will say that I will say that there's kind of pros and cons to that. 

Right? So, anyone who is working on a technology or solution that could come into play, could support this pandemic if it, if it makes sense to be devoting resources by all means. Absolutely. 

Right now the, the world needs all the help. You can get around that, but. 

What's even more important to remember is that everything else that they were working on before, and, you know, certainly thinking about conditions like like like cancer or or diabetes where these are important issues. 

They've been important issues they will continue to be. 

And, in fact, you can look at kind of the, the comorbidities or overlapping trends and someone who has who has cancer, someone who has diabetes, someone who's immune compromised. 

In some way they are even more susceptible to an infectious disease like like covet nineteen. 

And so we want to make sure that we're not kind of focusing all of our energy on one side of the spectrum and forgetting that there's a lot of other a lot of other conditions. That's one kind of general general guidance. 
But then, you know, as I mentioned, some of these, these tech trends that have really been growing 
over the past few years are now growing even more quickly and even more important. 
So, take something like telemedicine, which in the US has been somewhat frustrating. Maybe very frustrating. 

Over over the past several years, because we've really had all of the technology pieces in place to be able to provide. 

Telehealth solutions across across the country around the world, be able to to reach people quickly and effectively deliver care and provide a whole different layer of a service and guidance. That might not have been possible. 

Otherwise, yet, 

telehealth has been really slowed down by the regulatory side of things and it's been frustrating to a lot of technology developers over the past several years, 

even frustrating to some positions and other providers. 

And then, in the midst of this pandemic, when everyone was compelled to to stay at home, suddenly telehealth became something that was much, more, much, more, relevant, much more needed. 

And almost overnight, the, the FDA and other regulatory bodies basically made it made it possible for telehealth to flourish. 

And so any company that was sort of toiling away, working on telehealth solutions, hoping for a big break that big break happened over the past few months. 

And so now, 

all of those companies are doing tremendously well, 

and there's other new entrance coming into play and, 

you know, 

one more example around that is if the mental health phase and mental health has been an area that's been of, 

I would say high interest for for several years and that's in the. In the services arena in the digital health arena, 

both looking at the digital diagnostics as well as digital therapeutics and something like mental health becomes even more important when we're when we're all stuck at home. 

You know you know, people are people are not working. People don't have access to the, you know, to their friends to entertainment to, you know, ways to release some, you know, release some pressure from their lives. 

And so mental health becomes even more of a critical issue. And so that's another area where I've seen tons of growth over the past few months. You're absolutely right here. And there was a big breakthrough in that field. 
So that's great. But I want to make this one a little bit more general, because only a few percent of my 
wasters are actually, in these fields, the rest of them are just seeing there right now and wondering why, why am I doing this one? 

So, let's, let's talk a bit more general. I get that vital signs away is great company that connect dots basically, do you know anything like by science late but for more general field. 

So, for example, for consumer tech, or for B, two B tech or just anything, but bio science or live tech. 

Yeah, absolutely and I would say that this is one area where in particular in Los Angeles we are, we are truly blessed. We live in such a diverse ecosystem here and that's diversity of. 

Give me, 

diversity of of population, 

diversity of industry, 

or sectors within healthcare and then, 

to your point diversity of, 

you know, 

industries outside of healthcare and so you look at some of the leading industries here in Los Angeles from arrow space to clean tech to say, 

you know, 

entertainment technology, 

and then even more broadly, 

and we've got just a a wealth of resources from, 

from organizations like like like, 

TechStars that have their their space accelerator program, 

which is working with companies like space X and Boeing and other leading companies on the aerospace side. 

To help, 

develop companies in aerospace, 

you've got the, 

the, 

the Disney accelerator connected to obviously that Walt Disney company that is tied to entertainment tech and and I've seen everything from if technology to media technology to toys go through that. 

We have the clean tech incubator,
which is honestly one of the,
the nation's leading programs around clean tech acceleration and then even more broadly 
organizations like the Lara Institute,
LA,
which is a.
Really a, a commercialization accelerator for companies in L. A. and beyond, 

but they're, 

they're, 

they're based in LA, 

and they've been here for over twenty five years and they tend to work with early stage technology based companies or even the entrepreneurs researchers who I have access to funding from 

an H or for department of energy things like that, 

and so we've got resources like that as well as a more more locally based resources that are focused on focused on a certain part of part of town here in L. 

A. 

and what I love is that all of those organizations work together, 

they share ideas, 

they connect and so from a standpoint, 

I'm, 

I'm talking to people at at clean tech incubator at large, 

you know, 

have relationships with the, 

the, 

the face accelerator and things like that. 

Because ultimately, some of these ideas cross industries, and ultimately some entrepreneurs are working in one industry and then shift into something else. 

Because it's not so much that they're focused on a single industry is that they're focused on. Hey, I want to innovate around remote technology. 

I want to innovate around that, you know, collaboration things that ultimately can span multiple industries. 

Right. And by the way, speaking of a late clean tech incubator, I interviewed the senior investment director off. So if anyone's curious just go to the episodes and search L. A. C. 
there was a fun episode. Indeed. So, let's move on to the topic that personally personally be fed up, 
which is alternative sources of capital. 
Well, no, there are multiple of them, but mostly entrepreneurs, especially first time, entrepreneurs pursue the two standard paths, angel, investors and the sees. 

So, what do you think are the best and your personally, favorite alternative sources of capital for startup founders? 

Yeah,
this is this is one of my favorite questions as well and one that I love to talk about and so I just,
I just mentioned Florida Institute and so I'm gonna go back go back into that that space for a second, you know,
in particular in the in the sciences in in life sciences,
and that's everything from kind of the, 

the biotech side of things to the med device side of things to even digital health one area that I encourage all entrepreneurs to look at is non dilutive funding and that's really that's the grant grant funding is, 

you know, 

it's a fancy way of saying, 

grant funding and. 

In particular in the sciences and health tech, there are so many options from and the National Institutes of health to the National Science Foundation. 

You know, 

even as I mentioned some of these other agencies, 

like Department of energy, 

or department of agriculture, 

National Institute of standards NIST, 

all of the government agencies have amazing funding programs. 

And in particular, which is and I think their tagline is the nation seed fund and it really is it really is that they make investments. But again, these are is non dilutive, but not taking equity. 

These are grants to help move companies and research forward. 

And if you are an early stage technology innovator, you think you've got something special it is worthwhile, taking a look at some of those grant programs that the applications are not are not easy. 

But there are people out there who can help with those and Florida Institute. And other organizations can help point the way with that, but that's a great source of capital. 
And then beyond that, you know, again, in particular in the, the health tech space, where, when you 
think about a healthcare, you tend to think about, I'm doing well by doing good. Right? 
So, health healthcare related businesses, whether they're. 

A digital health or a medical device, or or or biotech ultimately, you're, you're building a business to help people. And so what that also tends to mean is that there might be other others out there who are willing to support that. 

And so, in in healthcare, from large foundations that just have an interest in in health and wellness to disease foundation. 

So, 

you know, 

what I've learned over the years is that every single, 

every single disease, 

you know, 

from every single type of cancer, 

to to diabetes to, 

you know, 

Parkinson's, 

you know, 

you name it there are one or sometimes two or three or or many more organizations. 

Nonprofit foundations that are focused on that disease, 

and they often exists to support to support patients who have those diseases to bring together family members, 

but they're also very much focused on on, 

on funding to help support cures, 

help support solutions for those areas. 

And so again, that's another another way to access non dilutive funding and then a third one I'll bring up. Because again, I think it, it comes into play maybe a bit more in in the health space and in others. 

But I would argue that almost any industry has this example where. 

Think about large, large partners, whether they are, they could be large almost, you know, they can be competitors someday or collaborators, or even customers. 

So in healthcare, you think about your a health technology startup can you do a deal? 

Do some sort of collaboration which could involve some investment funding from a large company like like Amgen, which has business development groups, which has venture groups? 
Yeah, they, they, they make they make investments or support startups so many different ways. 
Are you looking at an organization like Kaiser, 

you know, 

large large healthcare provider payer and provider and between collaborations around new technologies, 

between their ventures groups all of these organizations? 

Big farm, big health tech, big hospital, even insurance companies, they all have various ways to support technology providers and a new solutions, and healthcare and again, some of those can be non dilutive. 

Even if they are dilutive, they're a very different sort of approach than going to an angel or going to a VC firm. You're absolutely right. And by the way speaking of grants, I had an interview with the CEO of open grants. 

So, if you're curious to go, like, very, very deep into grants, just search. 

Grants one to one, that's the second episode I always mentioned here, but let's move onto the founders who are not in bio science or live tech our life science. How should they raise now? 

So, during this condemning, when they're when there are so many people trying to tackle the problem of the dynamic of the health issues, et cetera, et cetera, and investors seem to be focused on that. 

How should founders not in these fields stand out of this crowd of endemic focused people. 

Yeah, and again, I think there's there has been a little bit of a I, I wanna say a lot, but a little bit of a retrenching with some investors and in particular in in April May June. 

What we, what we've seen is a lot of investors. It's not that they're, it's not that they're unwilling to make investments right now, but more that with their limited bandwidth. 

They really want to focus on helping, helping their portfolio companies, their current portfolio companies, weather, the storm. 

And so they basically shifted a lot of their attention to working on their, their current portfolio,
as opposed to bringing new companies into the portfolio that said, you know, 

as we know venture capital is a, it's a long term game. 

There's there's many, many years of many years of growth required in any investment and to support a, you know, to support a particular fund. 

And so the fees always do need to be looking at what's next and when their next investments are are gonna come from. 
And what I would say in general is that you look at any situation like this, where the, the, the common 
reaction in some ways is to kind of take a step back.
It's to it's to downsize. It's too it's too high to wait it out. And I think, you know, to some extent. That's not a bad strategy for for an entrepreneur.
If if,
as an entrepreneur,
you you don't need to take outside capital right now,
and you can basically hunker down and use this time,
almost peace and quiet to focus on building your product focus on,
having more customer conversations. 

And this might be the best time ever to have to get customer data because, you know, everyone has a zoom call away and you can probably get time on people's calendars to really understand your market. 

You know, if you can do that, this is actually not a bad approach, just to waited out a little bit, but really strengthen your position. 

But then the next step beyond that is, we really strengthen your position, which is this is absolutely the time to be investing. This is the time to be focusing on. 

Not just how do we solve the problems in front of us today, which is everything from a healthcare crisis to an economic crisis to now social crises layered on top of it. There's, there's lots of problems to solve right now. 

But I,
I also think that we are in this,
this such upheaval right now that what can,
and should come out of that,
is,
you know,
is a real mode of rebuilding and focusing on a bigger, brighter future.
And so as an entrepreneur.
If you can look at where we are today,
look at where the world could be in one year,
five years,
ten years and Kelly, 
really great story about how you are part of that longterm big solution. 
And this is, this is the place where this is not about I've got a cool new product and people will buy it. This is I have a concept. 

That can be part of transforming the economy, transforming the world really changing. How, you know, how humans interact with something or how people can can live, can grow, can work. 

This is the moment to be thinking about those really big ideas. And getting them in front of investors, because I really do think that there are people out there who they are ready, willing, and able to write checks. 

And I think they're going to be most excited by things that are about kind of being part of this major inflection point in the world that we're entering. Right right. 

And you mentioned very important part, which is storytelling, you've got to be able to say, like, your ten year vision while telling ten year vision don't forget your one month vision. So be sure to cover both of those. And we're moving on to the last episode. 

I mean, to the last part of our app is a, which is a call to action. So, what's that one specific thing that would like the listener to do? As soon as the episode is over? 

Absolutely besides just go into the bio science a website I think that I think that really. 

We are, we are in an inflection point in so many ways. Healthcare, health, technology, health innovation is a big part of that. And so I would really encourage, encourage all entrepreneurs to. 

It's not just about go out and start a health tech company. But but think about how what you're doing,
whether it's say a consumer product or a service or a,
you know, 

software or an app, 

think about how that does connect into this larger world of of health innovation and whether, 

you know, 

back to those three kind of three big areas of people and inflection right now of of health care economy and social issues. 

How is what you're doing relevant to that that inflection right now how can it be relevant? How can you really be part of a bigger picture? I think of everyone focuses on that we're gonna see some amazing companies coming out of this pandemic. 

So that's a great cultivation. So we'll wrap it up here. Thanks a lot Dave for coming up. And I think today's episode really fulfilled everything. We did not mention the yesterday's episode, so thanks a lot for that. 

And by the way for ptos who did not listen to the yesterday's episode, go in and check it out. It's about bio science and life science. 
As well, so it was a nice to episode discover of this topics. So thanks a lot for that and have a great 
day. 
Yeah, thank you so much for, having me really appreciate it and very excited that very excited that a lot of what we were talking about, ties into some of your past episodes. Great to see it all coming together and fitting into a bigger story. Absolutely, absolutely. 

And by the way, I forgot to mention that the link is going on is gonna be in the description of the episode. So definitely go on and check it out.