By Caitlin Kramer, Research Analyst, LSN
Incubators, accelerators, and other organizations are increasingly emerging as conduits for early stage life science companies to plug in to pre-existing networks, infrastructure, and capital. Entrepreneurs may find themselves faced with choosing whether to participate in such programs, and weigh and evaluate the benefits a given program may offer in helping them achieve their goals. At RESI on MaRS, five panelists from different groups in this sector discussed the topic from their own unique positions, each presenting the specialties and area of focus of their organization.
Moderated by Rebecca Yu, Head of JLABS @ Toronto, Johnson & Johnson Innovation (JLABS), panelists include
- Christopher Kim, Managing Partner, Korea-Seoul Life Sciences Fund (KSL) and Novatio Ventures
- Dianne Carmichael, Managing Director of Health, MaRS Discovery District
- Gordon Kurtenbach, Senior Director of Research, Autodesk
- Linda Maxwell, Founder and Managing Director, Biomedical Zone
Each model has a unique value proposition which lies in its approach to network-building
Across the board, incubators, accelerators, and other models act as hubs for connecting startups to a wide range of entities; but which entities? Christopher Kim (KSL) shared how he brings in experienced Entrepreneurs in Residence to work with management teams on their project, as well as interfacing with potential customers through his contacts in Big Pharma. Linda Maxwell elaborated on the outbound offering of Biomedical Zone, where the “focus is getting clinicians involved with the technology, to not just look at the clinical outcomes, but the business case validation.” BioMedical Zone helps companies execute pilot programs to deploy products in their partner hospitals such as St. Michael’s, where traction is gained with the people who will ultimately champion the products. Autodesk’s approach, described by Gordon Kurtenbach, is “positioning ourselves in a community, opening up our doors, and establishing a social relationship to find out what is interesting to all of us.” Dianne Carmichael said that MaRS Discovery District adds value through providing expertise and preparation to companies, as well as exposure to investors and partners – so that when entrepreneurs finally pitch to a good fit investor, they are prepared and polished. “Gone are the days when fundraising CEO’s are thrown in front of organizations that have no intention of partnering or investing in them”, she said.
Elevating the early stage ecosystem
“With incubators and accelerators, there’s somewhere in the neighborhood of 7500 of them in North America”, said Carmichael. She described how with this, there are many resources to “help companies that are starting…but I would argue that many of them don’t last.” At MaRS, a major focus is elevating the reputation of the entire early stage model ecosystem by carrying out due diligence on potential portfolio companies, and ensuring that the technology and management teams are well developed and prepared for talks with investors. Maxwell, herself an advisor to MaRS, described “working towards a new investment model, where investors are other hospitals, where we develop technology or pilot technology that people are mutually interested in.” This would result in “broadening the landscape for piloting and demonstrating clinical and business case validation.”
International collaboration is important at the earliest stages
For many companies, the “next stage” of success lies on penetrating international markets – particularly the US and Asian markets. Bringing in international investors is an excellent way to gain early exposure to global markets, competitors, and networks. For this reason, international collaboration is a key theme for firms like KSL and innovation hubs like MaRS. The relationship between people and hubs in the US and Canada are emphasized by Carmichael and Maxwell. “It’s easier to start a company in Canada than it is virtually anywhere else in the developed nations, but we have a real problem with scaling,” said Carmichael. Maxwell went on, “until we develop our own infrastructure for really adequate scaling of companies, early stage companies are going to go to the US” for that purpose.
Final Remarks
The early stage ecosystem is ripe with resources for entrepreneurs. There are a variety of models, some more hands-on than others. These will be the models that perform diligence, and bring in/coordinate with outside expertise and investors with a customized approach for their portfolio companies. Other models are more “open door”. Companies would not be expected to achieve milestones or need to wait for diligence, but should not expect the same level of guidance and support network that more rigid programs offer. Entrepreneurs should evaluate whether there is alignment between their goals and the specific “value proposition” of a given model.
With RESI heading to Toronto for the first time, LSN has been delighted to find that many investors are interested in coming to MaRS to get involved in Toronto’s healthcare innovation hub. Ranging from local Ontario funds to firms from the far side of the world, these investors will gather on June 23rd to meet with startup companies from Canada and beyond. If you’d like to join us at RESI on MaRS to book meetings with these investors and more, 
Next Phase Newsletter 