This page is part of an in-progress commentary by Roger
Frye
on High Altitude
Thinking: The International Informatics Summit.
Trevor introduce panelists. Surveys audience by geography and relation to venture capital.
Lisa trained as scientist, then patent attorney, works with companies protecting their IP with effective business model and funding. San Diego.
Ajmal focus on software, communications.
Bob focus on early stage.
Stewart comment on trajectory from lawer to angel to him who will do anything. $2.5B deployed. Focus on info tech. Own a house in Santa Fe.
Trevor ask Stewart what criteria meet if want to raise money. Answer: we will give you a dollar, but we want 10 back. Has not invested in bioinformatics because no model of how to extract money.
Trevor ask Bob. Have all angels gone to heaven? What are you looking for? Answer Angels have to watch Venture capitalists. There needs to be a team effect. Where can angel add value, not just money only. Angels try to identify all of the risks.
Trevor ask Ajmal are looking for. Ajmal says this is a good time to start a company. (I must have misheard-- he seems to be saying the opposite). Effort to raise money has gone up.
Trevor ask Lisa how important IP protection is at beginning. Answer: used to ask for patent applications. Still important, but not essential. Copyright and trade secret also possible. Strength of portfolio more important than number. Need freedom to operate. Not infringing on 3rd party patents. VCs don't want to pay royalties. Software, methods of analysis are now patentable and have been overlooked. Stewart contends that with drugs, patents are crucial, but method of delivery less important.
Trevor ask Lisa about set of algorithms to extract data for bio. Answer VCs interested in drugs, not in tools. Need to put the two together.
Trevor asks Ajmal and Bob is it better to have one or two large customers who can bankroll or more smaller? Ajmal says in early stage need some large customers. Better focus, fine tune product rather than customize for many. Bob says not too dependent. Important that can distinguish your product from crowd. Stewart says hard to start businesses, most fail. He invested in Napster even though they gave everything away for free. What he can't understand about drug development. Go through such a long time developing and validating. How can you finance with venture capital? Lisa answers that it would be very difficult to VC for 10 year process. Need to do through partners.
Questions from floor.
Question from Strategic Analytics: what is cost per startup of devloping IP plan 10K or 100K. Lisa 1 patent worldwide = $100K. Lisa says provisionals are misleading. Can't just take a paper and wrap it in an application. Prices in stages. Would Ajmal spend seed capital on that? No, seed for taking an idea and flushing it out.
Question from Unilever: understands that software patents is not about monopolies, but to secure partnerships. Stewart says large companies like Gemstar use to create business relationships. Small companies need to establish a wall and work outward. Lisa agrees. Other companies fill in the holes in your patents. Small companies move too rapidly form one algorithm to next to patent.
Question when will capital window open up. Stewart disagrees: window is open. Lot's of capital available. We have returned to the way it was in 1996. Short time. Need to start business independent of the way you finance it. Trevor violate moderator role. Amounts have come down, but VCs are looking for places to put their money. Need to see path to profitability. Bob says if you have a great idea, it will work.
Bassil from SenCore asks effect of changing regulatory market on the relation ship between analyst ... Stewart answers different sources of capital in biotech are shifting around. Want to spend most of their money at the tail end after have good clinical trials, but need to carry early stage a little.
Question from Eli Lilly: compare tools and drugs. Stewart answer VC classically does not invest large amounts of money. Don't know how to invest their resources.
END