How to Transform Scientific Discovery into Market Success with Passion and Precision
About This Episode
In a recent episode of "Building the Future'' hosted by Kevin Horek, I had the opportunity to share my journey and the core philosophy behind Northpond Ventures, the venture capital firm I founded. Growing up in California, my academic and professional paths were heavily influenced by my father, an electrical engineering professor at UCLA. This familial connection steered me towards an electrical engineering degree at the same university. My thirst for knowledge didn't end there; I expanded my education to include an MD and PhD from the University of Chicago and Harvard Medical School, followed by an MBA, reflecting my commitment to bridging diverse fields of expertise.
At Northpond Ventures, we differentiate ourselves from traditional venture capital firms by not just funding but actively engaging in scientific research. With strategic offices in Cambridge, San Francisco, and Bethesda, and deep ties with top institutions like Harvard, MIT, and Stanford, we are uniquely positioned to propel innovations from the lab bench to the market, particularly in the life sciences sector.
Our firm operates on a mission-driven basis, leveraging science and entrepreneurship to profoundly impact human health and society. Our investment approach is meticulous and systematic, ensuring that only projects with the potential for substantial and sustainable impact receive our support.
During the podcast, I discussed how our educational pursuits, professional experiences, and passion for science converge to create solutions that address real-world challenges. This conversation not only illuminated the strategic operations at North Pond Ventures but also highlighted my role in driving forward the future of science-based entrepreneurship.
Episode Outline
(01:45) A Diverse Educational Path: Engineering to Medicine
(02:36) The “Why” behind Northpond Ventures
(06:56) Leveraging Multidisciplinary Knowledge
(10:50) Strategic Investment Approaches
(15:41) Commercializing Academic Research
(17:35) Collaborative Ventures with Academia
(19:13) Managing High-Stakes Entrepreneurial Stress
(22:26) Learning from Failure in Venture Capital
(26:54) Case Studies of Successful Investments
(35:18) Comprehensive Investment Criteria
(41:25) Validating Early-Stage Scientific Research
(45:40) Advice for Emerging Entrepreneurs
Resources
Connect with Mike
Follow Mike on LinkedIn
Subscribe to the Northpond Newsletter
Connect with Kevin
Connect with Kevin on LinkedIn
Learn more about Building the Future
About Building the Future
With millions of listeners/viewers a month, Building the Future has quickly become one of the fastest rising programs. With a focus on interviewing startups, entrepreneurs, investors, CEO's, and more, the show showcases individuals who are realizing their dreams and helping to make our world a better place through innovation and technology.
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Voiceover 00:02
Welcome to Building the Future hosted by Kevin Horek. With millions of listeners a month, building the future has quickly become one of the fastest rising programs with a focus on interviewing startups, entrepreneurs, investors, CEOs and more. The radio and TV show airs in 15 markets across the globe, including Silicon Valley. For full show time, past episodes, or to sponsor the show, please visit building the future show.com
Kevin Horek 00:30
Welcome back to the show. Today we have Mike Rubin. He's a founder and CEO of North pond ventures. Mike, welcome to the show.
Mike Rubin 00:37
Thanks, Kevin. It's great to be here with you today.
Kevin Horek 00:40
Yeah, I'm excited to have you on the show. I think what you're doing is actually really innovative and cool. But maybe before we get into all that, let's get to know you a little bit better and start off with where you grew up.
Mike Rubin 00:52
Absolutely. Well, I am from the sunny state of California. I grew up in LA and I stayed there for for college at UCLA. I think that's an institution known to you.
Kevin Horek 01:07
What did you take NY just out of curiosity?
Mike Rubin 01:11
Yeah, so I was an electrical engineering major as an undergrad. And I wish I could give you a better reason for why I majored in electrical engineering other than the fact that my father is an electrical engineering professor at UCLA. And there may be a bit of familial influence on both the school and the major. So that that was definitely a big part of why I ended up studying that.
Kevin Horek 01:45
Okay, so you have a ton of education. Do you want to walk us through the rest of that, and maybe kind of some career highlights along the way up until what you're doing? Yeah,
Mike Rubin 01:54
sure. Sure, absolutely. I'll go through this sort of whirlwind high level of it, but I did my undergraduate degree in electrical engineering at UCLA. Cool. From there, I ended up going to medical school, I was at the University of Chicago, ended up then doing my internship and fellowship at Harvard Medical School, with a residency back at University of Chicago in between those two stents. I have spent a lot of time in school. So I have an MD PhD, I did an MBA on a part time basis, have a CFA? So yeah, I was almost a professional student. Yes.
Kevin Horek 02:36
Okay, interesting. So walk us through what you're doing now. And how did you come up with the idea for North pond ventures? And let's dive into that?
Mike Rubin 02:49
Yeah, absolutely. So I'm the founder and CEO of North pond ventures. North pond is a multibillion dollar science driven venture capital firm. We have three headquarters. One is in Cambridge, Massachusetts, we actually span the front facing block of Harvard Square right next to the Harvard Harvard coop for those who are familiar with that area. We also have an office in San Francisco. And then I happen to be personally based in our Bethesda Maryland office right outside of Washington, DC. We've been consistently named amongst the most active investors in the life sciences. We do everything from Biotherapeutics to molecular diagnostics to research and development solutions for science. We are actively involved in some 60 boards on businesses that we've either LED or or CO LED. And importantly, we also run three academic facilities. One at Harvard University, one at MIT, and one at Stanford University. And we're involved in both engaging and developing novel research within healthcare and medicine as well as building businesses around those, those discoveries. And so in addition to being the founder and CEO of North pond, I'm also a visiting scholar at Harvard, and a visiting scholar at MIT, as well as an adjunct professor at Stanford.
Kevin Horek 04:21
Very cool. So you're very busy guy.
Mike Rubin 04:26
Try to keep myself busy, do things that I think are fun and impactful. Oh, very
Kevin Horek 04:31
cool. So I guess like I've talked to a bunch of kind of VCs in over the years. It seems to me like you guys, obviously, like you're putting money in. But how are you different than kind of a traditional VC type company, an investment firm?
Mike Rubin 04:52
Yeah, I think we're different for a number of reasons. And I think it's the intersection of these reasons that when you put them all together, maybe differentiate us the most. First and foremost, we are mission driven. And our mission is to develop and empower breakthrough science through the vehicle of entrepreneurship to impact humanity in profound ways. So we are, we are really driven to make a difference through science and through medicine and through entrepreneurship. So I would say that's a really important starting point for for us beyond that. I think one of the things that is a really differentiator, which I just alluded to, is we have these deep relationships with academic institutions where we don't just fund research, but we actually engage in the research in a substantial way. So at Harvard, we won't just find a scientist will actually work, we'll have our team of scientists and entrepreneurs work with the team on the ground at Harvard as an example, to help develop the actual protocols that we think are going to be best suited to building businesses on the back end, and we interact with them on a continual basis. So there's a support from a financial capital standpoint, but beyond that, there's a support and really every element that's necessary to go from, you know, pure conception of an interesting scientific concept to actually bringing that business to fruition, and then supporting that business. And its its development over over the long term. So it's really a full fully vertically vertically integrated solution for these the scientists.
Kevin Horek 06:34
Okay, no, that that makes total sense. So I'm curious, why did you need to kind of fun or found the company? Because obviously, like, I guess, and maybe you just argued that it's almost like a continuation of your education, right? In some respects, or, or, like, walk us through why you decided to actually go for this? Yeah.
Mike Rubin 06:56
So you know, my passion in life was pretty consistent from when I was was young, I always knew I was passionate about science. And I always wanted to leverage science to make an impact. And I just didn't know what the best way to do that was. But conceptually, I knew that's what I wanted. And I went through a journey of thinking, well, maybe the best way to do that is through through medicine, and through clinical practice of medicine. And so I spent 10 years training as a physician. And, you know, many would say, gosh, do you do you regret spending those 10 years? Because you're not practicing medicine? And, you know, for me the the question that the answer is, you know, resounding NO, I have no regrets, because I've leveraged that just perhaps in non traditional ways, and it was really all about having an impact. And before I launched, North pond actually launched another venture business that was part of a larger organization called sands capital. And I co founded and ran sands capital ventures, which is, as the name would suggest, it's venture capital franchise, and that was actually a global cross industry Venture Fund, which was a lot of fun. We help build and support businesses in India, the Middle East Africa, and financial technology and mobile, internet and financial technology. And we were able to take lots of businesses public and sell businesses, I've done a lot of great outcomes in different geographies and in in different arenas. And that was really gratifying. And I learned a lot from that. And we were fortunate enough to build a track record. But what I really wanted to do subsequent to that was get to my roots of my why, and where I felt like I can have the biggest impact and where I mattered the most. And that was really leveraging this medical and scientific background combined with my investing entrepreneurial background to do something where I felt like I mattered the most, and where I could have the most impact. And so North pawn was really about refocusing and retrenching, on on where I could be the most useful.
Kevin Horek 09:02
No, that that makes a lot of sense. And it's interesting, because because you come from that background, it probably makes investing in doing due diligence on companies a lot easier for you, because you well, because, like, for me, for example, is I would have no idea how to validate some of these ideas, because I don't come from that background. Right. And it's like, Sure, that sounds possible, even if it's like clearly not possible. Right. Right.
Mike Rubin 09:30
Yeah, absolutely. You know, the work that we do is pretty technical. Sure. And it's pretty early in a technical manner as well. And so there needs to be aware with all to be able to evaluate the scientific merit of what we're doing. Not just from a scientific standpoint, but from a translational standpoint, because there's lots of great science. The question is, can you instantiate that great science within the construct of an entrepreneurial vehicle such that it's commercially relevant, you know, can can you build a viable business model around it? Is, is, is there a customer or client base on the back end of that that has a need for what you're you're developing. So there's a lot of different dimensions that one has to consider just beyond the scientific merits in order to build a viable business. And, you know, just being fortunate in my career to being exposed to all these different things being medicine, science, intrapreneurship, investing finance. It's just really gratifying to amalgamate all those different disciplines and try to try to do something impactful.
Kevin Horek 10:39
Sure. So when you're looking to invest in a company, are there things that you and the team look for? Or kind of walk us through that? And how do you decide who to actually invest
Mike Rubin 10:50
in? Yeah, absolutely. So we're pretty systematic as an organization and the things that we look for, and I can run through those considerations. So there's a number of, you know, boxes, if you will, that we sort of need to check. And we need to check all of them. So the order is less critical, because ultimately, the sort of all these criteria need to be met. But the way we tend to think about things is as follows. One is, the underlying technology and solution needs to be sustainably advantaged and differentiated. It needs to be better than what's out there and needs to be better in a way that it's different. Because if you're not sustainably better than all of the costs, and hard work that you're going to do is is going to be for naught, because it's really hard to bring something in to the market, and then to compete with existing solutions. And so just being in our industry, which is highly scientifically driven, just an alternative solution that isn't clearly better, just doesn't work. And so, sustainable advantage and differentiation is a big deal.
Mike Rubin 12:00
But you know, as you might imagine, that's necessary but not sufficient. It needs to be in a compelling market with a viable business model. And so what is a compelling market mean? You know, some people just look at total addressable market and want to see how big is the market? And that's interesting. But, you know, to us, it's less about how conceptually big the market is. And it's more about how much of that market you can actually capture? And do the customers actually need your solution. Because oftentimes, in science, you could develop something that's incredibly sophisticated and elegant and interesting, but not particularly useful for people or it might be useful, but the cost of what you're doing is is prohibitive, and they're better off doing something simpler and cheaper. And so what we really need is a captive market base that looks at this advantaged and differentiated solution and saying, Yes, this is something that that we really need we're willing to adopt. And then the second part of that is, the business model needs to be viable, because I can't tell you how many times scientists develop something that from a manufacturing standpoint, as an example, from a development standpoint, is prohibitive, right.
Mike Rubin 13:18
So it's amazing, it just cost $2 million, and no one has that. And maybe there's two people who have have the budget to buy it. And so, you know, the business model has to work. You know, our next criteria has to do with the people. And the people are absolutely critical, as you might expect. And you know, what we look for people who have the ability to execute. And we talk about focus and execution. Intrapreneurs, obviously, are ambitious people, and they see tremendous opportunity. And so oftentimes, they're challenged to really have that focus and that execution mindset. But without that, it becomes really, really hard to achieve your milestones. And so we look for entrepreneurs that that have that criteria. You know, beyond that, we look for businesses that can get to sustainability in a reasonable amount of time and a rational amount of capital. And what we mean by that is, none of these businesses are profitable at the outset, they're all going to need additional capital in order to survive.
Mike Rubin 14:29
And so we have to be really thoughtful about how much capital this business needs over the life of the business, how easy it will be to procure capital outside of our own resources, what milestones we can hit along the way, and how much time and how much capital requires to get to sustainability. Because, you know, if this exercise is going to cost us, you know, 10 million versus 300 million or a billion, you know, that's something we really got to understand and we got to make sure the sort of risk reward is aligned with the amount of You know, capital and time required? So those are some of the major criteria that we think about when we assess opportunities.
Kevin Horek 15:09
No, that makes a lot of sense. I'm curious, and you can correct me if I'm wrong with what I'm about to say. But I found sometimes with academics that are building products or some technology, they find it really hard to actually make that jump from basically building like a product to actually going to market and then building it into a real business. Have you found that? Or what are your thoughts around that? And then do you help them do that? Because maybe that's not their specialty.
Mike Rubin 15:41
So yes, and yes, and I think that's the crux of a big part of why we exist, and what we have to offer to these academic ecosystems. And so what we've realized is, there's an extraordinary amount of impactful innovation happening just at the three innovate institutions that were deeply involved in Harvard, MIT, and Stanford. And yet, the overwhelming majority of it doesn't come to fruition through an entrepreneurial vehicle, because there's a tremendous amount of skills required to translate that from, you know, the research lab to a viable product. And we've actually realized, and from our perspective, that that is the largest rate determining step. So much so that we think there's extraordinary diseases that can be practically cured, or at least treated with an order of magnitude better efficacy based on what's been done scientifically. However, being able to do all the necessary steps from really great science to a product that could take hundreds of millions of dollars requires significant regulatory expertise, reimbursement expertise, building a sophisticated business with, you know, operational structures, most scientists, were never trained to think about all these things, and they really require people who can help them from day zero, and help them cross that chasm so to speak. And that's, that's where we come in.
Kevin Horek 17:21
Okay, so how do you work with somebody to actually make that happen, because that's not like, a few weeks, probably not even a few months, that's probably like years of time and effort and, and work right and connect
Mike Rubin 17:35
100% It's, it's, it's a multi year exercise. And, you know, as it relates to our academic relationships, and not everything to be clear that we do starts in academia, we do plenty of work with businesses that either already exist, or that we help assemble outside of academia. But, you know, talking about academia, because I think it's an interesting case in point, we work really early with the scientists to first understand the scientific construct, and then to figure out what are the best applications? And it's a real collaborative process.
Kevin Horek 18:14
Yeah, okay, that makes a lot of sense. So, I'm curious to get your thoughts on. Because obviously, when you're building a business, especially when some like more on the science side, and you're onto like a breakthrough, it's really easy to like, not sleep, get burnt out, you know, all the stuff that kind of comes with being an entrepreneur, but I think in some cases, with the space you're in, it can be even worse. Because when you feel like you're just about to have a breakthrough on something, you're like, oh, just another hour, and Oh, and another hour turns into two days or whatever, right? How do you kind of, or what are your thoughts around how to managing that? Either personally, or professionally, and kind of what have you found it's worked? And how have you kind of helped companies make sure they don't burn out that, you know, year, two, three year mark, when they're trying to get to like five years when the product goes live or whatever? Right?
Mike Rubin 19:13
Yeah, no, that's a that's a great point. And we've we've definitely found that to be the case. And I think the best solution that we found is to put a really strong team around the scientific founders in particular, there's a tendency for the day zero entrepreneurs who come up with the concept to feel like they have to execute against every conceivable task that the business will require over time. And the reality is, it's okay to get great people around you to help support that.
Kevin Horek 19:48
Yeah. How do you nurture that though, because I've had kind of some sign type scientific or scientist type friends that have kind of wanted to do Do that, and letting go of their baby. And I don't blame them, because I get it can be really challenging to offload some of that work to somebody else? Or
Mike Rubin 20:10
can Yeah, you know, it can be really, really challenging. You know, and it depends on the individual. And I've, we've learned that the hard way. Okay, we had circumstances where initially, we didn't align with the intrapreneurs, on what it would be what would require to make the business successful over the long term. And then there were situations where, you know, it became difficult down the road to explain to them that look, the business is getting to a point of complexity, where you need to have a bit more division of labor. And then, over time, as we've sort of learned, where we can hit snags, we try to be as communicative and upfront with entrepreneurs about, here's what it takes to be successful over the long term. Here's what we think your strengths are, and how you could sustainably help support this enterprise. And here's what we think is going to need to happen in order for us to take it to the next level.
Mike Rubin 21:07
And you know, the the key word is alignment. And if there's anything that I've learned along the way of everything that we've done is, things are far more successful in the long term, if you can build alignment upfront, and yeah, the more experience we have, the better job we do have just being up front. So say, hey, look, we're going to be in this together, like you said, it's going to be a multi year exercise, it's gonna be an evolutionary process. And we got to really align up front on what Oh, entail. And if we're in this together, and we trust each other, and we support each other, and we're willing to build the best team around us to have complementary skill sets, then then I think we can win. You know, and so we try to share with our entrepreneurs what's worked elsewhere, and give them as much of a perspective on what it takes over the long term? No,
Kevin Horek 21:58
that that makes a lot of sense. I'm curious to get your thoughts on kind of failure, because obviously, when you're doing science, the whole idea in a lot of cases is like, prove yourself, right. And there's going to be a ton of failures along the way. And I think some of the lessons that can be learned in, you know, that space can apply to any entrepreneur. So what are your thoughts around that? And how have you kind of helped entrepreneurs through that? Ya
Mike Rubin 22:26
know, that's a great and really critical point. You know, certainly if you're going to be a venture capitalist, let alone a formative stage science driven venture capitalist, and you're going to do it over the long term, you're going to have to build a great relationship with failure, or all of its cousins, that, you know, that that's sort of a predicate for the the work that we do. And, you know, what's helped me is not to look at failure as something as a possibility, but something as an inevitability, right? No, you know, no basketball player, you know, would call themselves a failure for not making 100% of the shots, they take over the course of a game, let alone have a year, everyone knows that there's sort of an acceptable rate at which you should expect things not to work. And the reality is, if you're not failing enough, right, that is in and of itself a failure. Because, you know, you're not really giving yourself enough opportunities, right? means you're not taking enough risks. And so what we try to do on our end, and we're fortunate being on the venture side, we have a large number of different projects we can support.
Mike Rubin 23:42
And so for an individual, an entrepreneur, like the fact that some other project that we're supporting works, doesn't really give them a lot of solace. But from our vantage point, you know, we have sort of the law have larger numbers on our side. And so what we do is we start small, we have rational expectations. And we set milestones we align with our entrepreneurs and our scientists on what those milestones are. And then we see where we are. And it's really critical for us, and for the entrepreneurs to be intellectually honest about whether we're really going in the right direction. And I think the biggest mistake that people make in my industry isn't that they fail. It's that they fail to recognize that they're failing. And, you know, as one of my mentors once told me, you know, as an investor losing all your money is not actually the worst outcome, the worst outcome is doubling down and then losing that money too. Right. And, you know, so that's something that we just got to be really cognizant of, and it doesn't mean that we don't support things that are didn't hit their milestones. Oftentimes we do. It's just, we have to be really mindful about why and And what rational expectations are.
Kevin Horek 25:03
Yeah, that's interesting, because you're in a space that's really hard in a lot of cases, to make sure that what you hypothesize about can actually happen, right? Especially when you're creating something kind of out of nothing.
Mike Rubin 25:21
It can be. And so we do our best to actually have really discreet times quantitative, and qualitative, at least descriptively, qualitative milestones that we all agree with. And that's where the alignment comes together. So we all understand what we're financing towards, and what we're trying to hit. And we try to make it as objective as possible, such that we say, great, if you hit these milestones, then, you know, we're happy to unleash the next tranche of capital to go from here. If we don't, you know, then we've got to retrench and ask ourselves, why haven't we hit those? Is it just taking a little longer and costing a little more, but we're generally going in the right direction? Is there a fundamental flaw in the scientific construct such that it's never going to work? And if that's the case, then, you know, at that juncture, it's best to sort of pause the project? Do we have, you know, the wrong group of individuals working on it? So, you know, we just got to go through a pretty thorough process to understand early on if things aren't tracking why and and, you know, and then figure out what to do from there?
Kevin Horek 26:34
No, that makes a lot of sense. So, can you maybe give us some examples, you don't have to necessarily name companies if you don't want to, but types of companies you've invested in, and then maybe give us some range of what you're looking to put in and kind of what stage a company is at or needs to be at?
Mike Rubin 26:54
Sure. So I'll give you two examples that are on different sides of the spectrum, because it gives you a perspective on the range of things that we do. So we'll start with one business that we actually developed at Harvard University with a professor at Harvard's VESA Institute, named George Church who's a well known geneticists and been involved in building a number of businesses. And what we've done with with this particular project, which I think is interesting, even for those people who aren't necessarily scientifically inclined, is we know the basic building blocks of life are our DNA. That's, I think, something that most people appreciate. There's a cousin of DNA called RNA. And, you know, the technical differentiation isn't really that critical.
Mike Rubin 27:54
But the important thing about RNA is, it's sort of the next step in the sort of process of going from our genes or genetic information to creating proteins, which sort of execute all these processes in the body. And what this particular company does, actually, you know, DNA has four basic variants, you know, there's some people learn this in school, ATC and G. And it's those four letters, and it's a four letter alphabet. And it's really just a four letter alphabet. That codes the entirety of our, our genetics, which is pretty remarkable. If you think about there's there's only four different sort of letters to play with. And what this company does is it creates more letters for RNA. And it creates Yeah, a tremendously greater diversity of ways that we can create biological constructs beyond what nature allows. And, you know, we had a lot of great success in the lab with this, and then we built a business around it. And we've actually, in addition to funding the business ourselves, we raised capital from outside investors and are off to a really good start. So that's, you know, example one of two that that I would
Kevin Horek 29:13
give, can I, I'm so Okay, so yeah, add these other letters. Can you give us some examples of what that has potential to do?
Mike Rubin 29:22
Sure, absolutely. So let's take a look at the COVID vaccine. The COVID vaccine, as, as many of us know, is an RNA based vaccine. And this is actually a company that develops RNA. And you can imagine when you're developing this COVID vaccine, and you're, you're trying to develop it against a specific target. And you're developing this mRNA is a component of this vaccine. That's the backbone of it. You're, you're doing it with, you know, these four Lego blocks, right, that have specific shapes and can code for specific things which, you know, might be sufficient. But you know, what we might say is great. We want to create RNA vaccines as an example of all sorts of other things. And it doesn't have to be infectious diseases, it could be cancer. And we want it to do all sorts of complex things. Well, what if we can make you a much bigger Lego kit, if you will.
Mike Rubin 30:20
So rather than that, you know, old school Lego kit, where you sort of, you know, have the blocks that are, you know, either a square or rectangle, and you got to, you know, create something really cool looking, what if we give you some round blocks, and we give you some of those cool antennas, and maybe some of those blocks are translucent, and then you can say, Wow, that's pretty cool. I can actually think of all sorts of more complex things that I could build out of these Legos, because you've, you've given me all all these different tools beyond, you know, the basic kit or the kit that nature gave us. And so, you know, that's, that's really, you know, part of the Yeah, part of the basis of it. Okay, very cool. You're gonna give us a second example, do you want to give us that?
Mike Rubin 31:04
Yeah, so I'll give it a second example. Because it's a business that's really timely. So we were one of the early lead investors in a business called Caverna. North pond is on the board of directors of this business. And we were fortunate enough to recently take it public, we had an IPO led by JP Morgan and IPO was incredibly successful, it priced well above the top end of our range, and then traded Well, above that. Thank you, yeah, we appreciate that. It was one of the more significant, you know, biotech IPOs. And in quite some time, and I think it's, uh, not not just great for this business. But I also think it's just a tremendous indicator for the receptivity of this market towards, you know, biotech assets, because I know, the economy has been a little soft lately. And there was a, you know, a couple year hiatus for us and for others, and being able to actually take businesses from the private realm to the public realm, and let alone do that, you know, really successfully with a lot of robust interest. And so this is a business that, you know, succeeded in doing that. And he's doing really, really well, on the public markets. And I think this is another cool case report, not just because we took it public, and because it was a success, but but because of the underlying value proposition.
Mike Rubin 32:37
And they are in a field that has captured a lot of imagination from both scientists as well as the broader public called Cell Therapy. And these are therapies that allow us to effectively reprogram our own immune system to attack diseases, and so they're highly personalized. And the first cell therapies developed were really for cancer. And it's still very early, but we've got some pretty powerful examples of how cell therapy can really attack diseases in a highly impactful and orthogonal way to what we would do otherwise. And this particular company is going after autoimmune diseases. So these are diseases like lupus and specifically lupus nephritis diseases like multiple sclerosis, as well as other variants like myasthenia gravis, I know I'm throwing out a bunch of medical terms here. But there's a whole bunch of diseases where the body's own immune system attacks itself, and it can create a tremendous amount of morbidity. And we've just had some really miraculous clinical cases of patients who were incredibly debilitated. And were unable to get relief from any other agent and with our our therapy, were really able to walk when they were previously not able to walk. That's incredible, actually. It really is. It's, it is really incredible.
Mike Rubin 34:30
And it's and it's really gratifying. And I think it underscores why we do what we do. You know, we invested in this business at a point in time where, you know, at best we we had some early indicators in, you know, a mouse model and it took a tremendous amount of capital and, you know, focus and collective effort by a lot of great people to work to get to this point. And, you know, you're not always right, as we talked about earlier, but when you are right Um, it's not just remunerative, it's impactful. And you know, that's why I went into medicine and science to begin with. Interesting.
Kevin Horek 35:07
So what? Where does a company have to be for you guys to invest in them? And then how much capital or a range of capital are you willing to put into these businesses?
Mike Rubin 35:18
Yeah. So we invest in businesses, typically in the formative stages, so we'll get pretty early. So as we discussed, we'll even conceive of scientific experiments that we do in the lab and support the research in academia Well, before we even have a business, and then if that research and academia is successful, we'll help build the business and incorporated and put the team together and all the resources together. So, you know, we're prepared to get in that early at the same time, we also recognize is, there's lots of great things out there that we're not going to build. And we don't want to think that we can't be of use to companies that that we haven't really been there from day zero. And so there are businesses that are on the earlier side of their development, that oftentimes aren't commercial yet. In the case of therapeutic businesses, it's pretty rare for us to invest in something where there's any human data.
Mike Rubin 36:25
So it's typically what we call preclinical, where maybe there's some animal data, maybe there's not even animal data, but we have a really strong scientific premise and construct and a good team, and an advantage and differentiated platform, where we think that we alongside the team have, you know, a good shot on goal at at being able to do something meaningful. In terms of, you know, the amount of capital, it really depends on the stage of the business. But, you know, I would say, on the very early end, when we're just doing, you know, research, it could start with, you know, a million and a half dollar grant. That's an academic grant to say, Let's carry these experiments and see where we are. And let's see if we have the rationale. On the higher end, you know, our firm's largest investments sort of cumulatively over time, not just one financing round, but cumulatively can, you know, approach about $100 million would be the sort of higher end of, of what we would do. So,
Kevin Horek 37:33
yeah, no, that's, that's really cool. So I want to dive a little bit deeper into because obviously, from my experience, sometimes getting into the medical space, and actually getting your first few customers is incredibly difficult. It can be even if you have connections. So walk us through or give us some advice on kind of how have you gotten some of these companies into the door and started getting some of their first few customers? Yeah,
Mike Rubin 38:01
no, that's a great question, Kevin. And it really varies depending on what specific sub industry these businesses are in. Sure. So I would sort of differentiate our biotherapeutic businesses from our non biotherapeutic businesses and for our therapeutic businesses, especially for folks focusing at our stage, it really comes down to developing and validating the molecule through a series of clinical studies. And so first, we have to validate it in an animal model. And then we have to go to the you know, to the the appropriate regulatory authorities and get permission to actually test these molecules in, in, in human studies. And then we have to do the systematic human studies. And typically what happens is, if we're successful on the Biotherapeutics side as, as venture investors, in carrying forth these molecules in human studies and validating them, then we're going to be incredibly successful. As investors without ever having actually commercialized it, believe it or not, and oftentimes, the commercialization stage is sort of left to larger organizations who typically will acquire US well, before that, and even Caverna as an example, they're still in clinical studies. And so we could take businesses public and get to pretty significant market caps without really actually having an FDA approved product. Now, that's very different from the diagnostic and tool side where it's, it's more conventional.
Kevin Horek 39:49
Interesting, yeah, I guess that makes sense. And even like, a new medicine, for lack of a better term for it, getting bought for hundreds of millions of dollars. is kind of cheap, really? Right? Or like anything even like a billion dollars is not that much money in the BIOS? Is that a fair assumption?
Mike Rubin 40:11
That's 100%. So, you know, we had a business that we were sort of lead investors on that, you know, called dice therapeutics, which, you know, we took public and then eventually sold to Eli Lilly, and that's, you know, a multi billion dollar transaction for an asset that's still in clinical studies. caverta is, you know, a billion dollar publicly traded company, and it's still in clinical studies, and, you know, it, you know, the these types of businesses can grow pretty substantially in value, just because what's imputed on on the back end, if they are successful in their, in their clinical studies, now, when we have a business, like, a scientific tool that we're selling to a marketplace, that is really very much a conventional sales process. And so the value proposition and the process is, is different. And in some ways, Kevin, it's a lot more similar to anyone else trying to sell a product, right? I mean, our end customer could be a scientist, but the end of the day, you have to convince someone to buy your, your, your box or your product or your solution.
Kevin Horek 41:25
Yeah, interesting. Yeah, I guess it makes sense to like, yeah, to go to use the, like a bigger company to help kind of mass marketed across the globe, right, because that takes a huge amount of time and effort
Mike Rubin 41:38
on the biopharma side, 100%. I mean, there are circumstances where we think the opportunity is so substantial, that will commercialize it ourselves, but it can cost easily hundreds of millions of dollars, just to get, you know, to what we call a, you know, a phase three clinical study. And so, you know, then the amount of money required to really commercialize it becomes really substantial. And then we just need to be intellectually honest with ourselves of is that really our strength, our skill set? Right, we're, you know, we're really here to take things from zero to one and to direct them, and to get them to a point where they're viable commercially. But, you know, we also got to recognize that there are these massive organizations that are incredibly proficient at, at commercializing, and we don't have that infrastructure, and it would cost a tremendous amount for us to build it. And, you know, maybe we're better off focusing on what we're good at, and allowing other large organizations to really execute against their strengths.
Kevin Horek 42:42
No, that makes a lot of sense. So I'm curious, because you potentially do stuff, before the research is even really started? How do you even know? Or how do you validate that that might work? Is that based on kind of your education, and the team's education? Because, like, it's different. If I come to you with a napkin idea of like, a piece of software, it's like, Yay, or nay. But if I'm like, I need to add, you know, a couple other letters to, you know, that artisan, it's like, I would like to me, I would have been like that. I don't think that's possible. But to somebody like yourself, you're like, that actually might be possible?
Mike Rubin 43:24
Yeah, that's a great, that's a great question, Kevin. And, you know, what we try to do is take calculated shots on goal, and there are a number of different ways that we build conviction and that upfront, one is, we have to build some comfort in the underlying scientific premise. And, you know, certainly if this is an academic project, it does require some scientific wherewithal to actually look at the underlying premise and evaluate whether or not that that's feasible, based on our scientific diligence. So, I mean, we definitely need to do that work, you know, but the second part is, we're working with great people, and, you know, great people in life, and certainly in science or everything, right. And, you know, what we found is, you know, the institutions that we're working with are highly credible. The principal investigators that we're working with are incredibly proficient at taking on these kinds of challenges.
Mike Rubin 44:26
And, you know, then we look at the early data that they have developed in in the lab on these constructs, and what we really just try to do is formulate a discrete set of projects that we think are executable that they can rationally prove and say, Okay, we think this next step is believable. We'll find you for that next step. Go show us that this shared hypothesis that we have, is actually feasible and sometimes It is sometimes it isn't. But if it's rationally priced, and the value proposition is big enough, you know, it might it might be worth sort of taking that incremental amount of capital to de risk it. Because if it works well, great now, you know, now you're off to the races.
Kevin Horek 45:22
Yeah, no, that's, that's really cool. So what advice do you give to people, whether they come from, you know, your type of background or not, that is maybe looking to get into this space, and maybe partner with somebody that is or complements their skill set?
Mike Rubin 45:40
Yeah, I mean, I guess the first piece of advice that I give people, you know, broadly, is to really follow your passion and your talents, and believe in yourself and be your authentic self. And I give that advice, because I spent enough time doing the contrary, to know that it doesn't work, right. There's an old old saying that it doesn't matter how fast you climb the ladder, if it's leaning against the wrong wall, you're only getting farther from where you want to be. And, you know, so I think no matter what you take on in life, there's going to be challenges along the way. And so you just have to make sure that your your passion for what you're doing, and your why for what you're doing is going to be greater than than any of the challenges. And then you know, beyond that, and this is less of a sort of discreet, tactical advice, it's more of a, you know, strategic advice is to sort of recognize that plan a very rarely works.
Mike Rubin 46:57
If, if you if your plan B works, you're incredibly fortunate, and it's usually plan C or D. And then once you're on Plan D, then it's not the first tactic under Plan D, it's, you know, and the thing that just always amuses me is, you know, and I told you this first, Kevin, this is the first podcast I have ever done. Right. And, you know, I sort of chuckle because we're incredibly fortunate, you know, we're a multibillion dollar, you know, science driven venture capital firm, you know, and then people ask me at this juncture, Well, geez, you know, how did you get here? And, you know, the reality is, no one wanted to talk to me, you know, you know, during those times, where, you know, we were just struggling, and we had nothing, and we were trying to get, you know, our first you know, few few dollars under management. And, you know, the way that, you know, because I'm an entrepreneur myself, right, I just, you know, my specific business happens to be a science driven venture business. You know, and it's really about persistence, about the willingness to try Plan B and Plan C, and take feedback well, and learn from it. And, and, and, and iterate. You know, and that's the, you know, the best advice I can give to people is, you know, get good feedback, learn from it, and iterate and know that it's going to, you know, come down to a Plan C, D, or E.
Kevin Horek 48:35
No, that's actually really good advice. And you brought up something that I think a lot of people forget about, as an investor, you have to raise money. In a lot of cases, like, your fund didn't just well, it might have or some of it might have come specifically from your bank account. But chances are all the money that you're investing in other companies didn't come from your bank account, like you had to go get it from a bunch of people, right. And so you've been through the investment, and trying to get investment side, probably many times, just like the people that are trying to get money from you, you've been through it, so you can even give them advice on it. Oh,
Mike Rubin 49:16
100% I mean, you know, I've worked with a very large number of highly sophisticated investors over long periods of time that span sure, you know, every conceivable category, and, you know, we've we've raised large amounts of money over the years and, yeah, I mean, the reality is, we're a business like everyone else, right? We we have our own clients, we have our own product, we have our own operations. It's just, you know, everyone's got a different product and service and ours is, you know, our, our services, you know, a venture capital and business building service. But, you know, beyond that 100 percent, you know, we we relate very directly to intrapreneurs. Because, you know, we are intrapreneurs.
Kevin Horek 50:05
No, that's, that's very cool. But we're kind of coming to the end of the show. So how about we close with mentioning where people can get more information about yourself? North pawn? And any other links you want to mention?
Mike Rubin 50:18
Yeah, absolutely. So thank you, everyone, for listening. The best way to learn more about me and about us, and the work that we do is either through my website, which is north pond, mike.com. That's one word North pond mike.com or through LinkedIn, where we share a number of posts and comments on different things that we're involved in. And my handle there as well for consistency is North pond, Mike, so please do follow me on LinkedIn and check out my website for some more writings on the work that we do.
Kevin Horek 51:04
Perfect, Michael, I really appreciate you taking the time out of your day to be on the show, and I look forward to keeping in touch with you and have a good rest of your day.
Mike Rubin 51:10
Thank you, Kevin. It's been a pleasure. You as well. Thank you. Okay, bye.
Voiceover 51:14
Thanks for listening. Please visit our website at building the future. show.com. To join the free community, sign up for our newsletter or to sponsor the show. The music is done by electric mantra. You can check him out at electric mantra.com And keep building the future
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