Innovations in biotech are pushing the frontiers of modern medicine at a rapid pace, with many of them being hatched inside tiny startups.
But this golden age for life sciences entrepreneurs also has its frustrations. Unlike other tech sectors, such as fintech and e-commerce, where startups can develop and get products to market quickly, biotechs face lengthy rounds of quality testing that increase costs and delay market entry.
This creates a risk element that makes investors cautious about handing over their money, and more concerned about the make up and credentials of the leadership teams. Specifically, they like to see older hands at the wheel. While youth can often be on the side of investment-hungry tech startup founders, when it comes to biotech, VCs are more inclined to look for grey hair among the executives and entrepreneurs they are prepared to back.
Research by early stage venture capitalist Bruce Booth found that most IPO-stage CEOs in biopharma are older than their mid-40s, with the median age of 54, and 75% aged 48 or older.
Knowing that investment will prove elusive without specialist expertise on board some biotech startups set out to build it in at an early stage, calling in specialist recruitment experts to help them find the right wrap-around.
It’s a strategy that has been used to great effect by Ross Upton, the 28 year-old CEO of cardiovascular diagnostics company Ultromics who now has a team of highly experienced ‘old hands’ helping his younger team as they take the business to the next stage.
As a PhD student at the University of Oxford, Upton developed the algorithm behind the Ultromics echocardiography analysis technology that aims to reduce errors diagnosing coronary artery disease.
With co-founder Paul Leeson, a professor of cardiovascular medicine at the university, Upton launched the business last year and secured seed funding of £2 million from Oxford Sciences Innovation (OSI). Suddenly he found himself on a very steep business learning curve.
He says: “I was an academic, with no knowledge or experience of running a business – and no idea of how hard the role of CEO would be.”
If the business was going to succeed commercially and make a positive impact on patients’ lives he knew he needed to hire people who had that business expertise and the deep knowledge of the science, the market and the complex regulatory issues.
OSI put him in touch with Talentmark, an international life sciences industry recruitment consultancy, where he met Chris Coe, partner and seasoned biotech ‘matchmaker’ who understood the challenges and the culture dynamics of a company based on a young founder. His first hire was the company’s chairman Helen Routh, a former senior vice president of strategy and innovation at Philips.
“She was hugely experienced, a crucial senior hire and the one person you would want in your business,” says Upton.
Coe then helped the company to find its CFO Bill Fleming whose career had spanned more than 25 years in a range of finance roles.
“Bill was appointed just in time to secure our series A funding round of £10 million, so we needed someone who really knew finances and good purchasing decisions,” says Upton.
Another recent senior appointment was the VP of product to guide the team through regulatory pathways. However, just as important as having this wealth of industry expertise to move the business forward was having people on board who made a good team fit.
“TalentMark has been great at finding people who would gel with my personality,” says Upton. “They support me without trying to order me around, and help me develop my skillset while respecting that I am CEO. But when I come up with ideas, they’ll put forward evidence-based feedback about why something may or may not work. We challenge each other, we work well together.”
Most importantly, as a young entrepreneur, having a senior team in place means he will be taken seriously.
“The complexity in the biotech sector is increasing,” says Chris Coe. “If young independent companies don’t have that grey hair to impart their astonishing experience and help them through, they will struggle.”
This will become even more important when the company reaches the next round of fundraising. The money is more likely to come from the U.S., and when it comes to doing the due diligence, investors there will look very carefully at the leadership team before making a decision on whether or not to back it.
“If they don’t see maturity and expertise in that team, they won’t invest,” says Coe. “These are the people who will stop you from making mistakes and provide great guidance, and from that your business can be very successful.”
Ultromics, which now has a team of 22, is using the £10 million investment to bring the technology to market in the U.S., and making it available in UK hospitals next year. The company will also use the funds to further research and development into new diagnostic technologies for cardiology.
Upton envisages a further round of fund raising to reach global markets beyond the U.S. and U.K., and ultimately an IPO. And Upton isn’t planning on going anywhere.
He says: “It is important that our investors want to keep me on board as CEO driving the company. As the inventor of the technology, I know this space really well, and it’s my baby, so I am completely bought into the concept and our goal of becoming an exemplar AI company.”