Let the venture capitalists do the investing, and the scientists do the science – or so says Joshua Boger, founder and former CEO of Vertex Pharmaceuticals. Things get messy, and progress gets hindered, when the science gets caught in the investment crosshairs. Here’s why:
In the days of venture capital yore, life sciences companies shared not just a financial relationship with their investors – but a sort of intellectual friendship.
“Venture capitalists used to serve as human capital managing partners – they by and large didn’t question me on the science,” Boger said.
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Things have changed, Boger said, speaking with a panel of storied biotech entrepreneurs at this week’s BIO convention in Philadelphia.
Venture firms are hedging their bets these days with biotech investment – targeting late stage startups, zeroing in on the science, and conducting deep due diligence to assess the statistical likelihood of a startup’s successful exit. Early stage companies have to generally look elsewhere for investment – traditional VCs are shying away from startups that still present a lot of risk.
Boger’s unhappy that the scientific underpinnings of a startup are constantly challenged these days. Because in the past, it was more about betting on teams than assessing scientific probabilities.
“The way to beat the odds is to bet on people,” Boger said.
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Over the past decade, Boger has seen a “disturbing trend” – in which VC firms zero in on a strong researcher’s work, “then presume to use 23-year-old PhDs to outguess them” on how the platform should actually be developed.
“It’s a ridiculous phenomenon,” Boger said. “I wouldn’t put up with it.”
Robert Langer, an MIT professor with more than 1,000 patents to his name, disagrees. Many of his students are these so-called 23-year-old PhDs wielding yea-or-nay power at venture firms, he said.
“I’d like to think that venture capital firms today are probably a lot smarter,” Langer said. “They’ve seen mistakes made made. They’re probably going to be more thoughtful about what works and what doesn’t today.”
