11-year old startup accelerator Y Combinator – “YC” for those in the know – has reached national (and international) acclaim for incubating today’s premier tech unicorns back when they were hatchlings. Companies with instant name recognition, like Airbnb (W09) and payment processor Stripe (S09). However fewer people know that in early 2014, then new YC president Sam Altman issued a call for science-based startups of all stripes, including biotech, which spans markets like synthetic biology, medical devices/diagnostics and of course therapeutics. Companies whose founders I know and respect, like Notable Labs (W15), Atomwise (W15), Verge Genomics (S15) and 20n (W15), have heeded the call. Last December, PLab heeded the call, too.
It was a long time coming.
I first learned about YC in early 2013, when I was consulting for YC company Experiment (W13), the Kickstarter for science. Back then, a veritable n00b, I didn’t appreciate the difference between angel investors and VCs. By the time of the announcement that YC was embracing biotech, PLab was raising a priced round. I assumed the YC window had closed. Besides, at that time I couldn’t point to any YC companies in the therapeutics space, and many folks in biotech met YC’s biotech foray with skepticism and even derision. While I identified strongly with the tech startup ethos and eagerly interacted with the tech startup community, there didn’t appear to be a fit.
By the start of 2015, I noticed that a small crop of science-based and more importantly scientist-led companies – though still decidedly NOT biopharma – had graduated from YC: uBiome (S14), Glowing Plant (S14), and Gingko Bioworks (S14). Yet I still didn’t perceive a fit. I thought we were too mature as a company because we’d already raised $2.5M; we already had lab space; and we were already on our way scientifically with our lead discovery program. But by the end of 2015, the experiences of that year made me toss out all my assumptions about YC.
First, I spent the better part of 2015 fruitlessly pursuing biocurious tech VCs, self-proclaimed crossover VCs, and dyed-in-the-wool life science VCs. Each had a different but no less dispiriting reason for passing: we were too early; we were too inexperienced; we were asking for too much money; we were asking for too little money. Like many first-time founders, I made what can be a fatal mistake of thinking that because we had successfully raised money, raising more money was going to get easier. Second, when I wasn’t hustling from pitch meeting to pitch meeting, I was pursuing BioPharma partnership opportunities in what felt like indefinite courtships. Ping-ponging between fundraising and BD is par for the course for an early-stage therapeutics platform company, but the cumulative cycles of promise and rejection weighed on all of us — I think more than I admitted to myself at the time.
I realize now that that experience was textbook Trough of Sorrow. The Trough manifests differently in the details depending on the company and sector, but the turbulent arc is always the same:
via http://www.forbes.com/sites/kylewong/2015/08/09/making-it-through-the-startup-trough-of-sorrow/
For PLab, the Trough was the existentially fraught period between raising a seed round and advancing our platform to a partner-able stage. Most companies don’t survive to tell the tale. One Friday evening in early December, Sangeetha and I sat down with Matt de Silva, CEO of Notable Labs, in a bar in SoMa to mull fundraising options. Matt urged us to take a second look at YC. Even though the official application season for Winter 2016 had passed, I could apply late. So in the week before Christmas, I completed PLab’s YC application. I uploaded the two-minute explainer video and then hit “submit.” Two tense weeks passed. A few days before New Year’s I received an email stating that I’d been invited to an interview on January 4, the final day of late interviews. I drove down to Mountain View for the first time not sure what to expect, other than a rapid-fire 10-minute grilling. I was told that if we were accepted, I’d receive a phone call that evening. Around 8pm I got the call from Paul Buchheit. We were in!
Surreally, less than 24 hours later I made the identical drive back down to Mountain View from my home in Oakland for the first day of the Winter 2016 batch. More on our actual YC experience in a later post.
