Today we’re excited to announce the addition of Dave Grayzel as a Partner on our life sciences team. Dave has been a key contributor to our strategy since joining Atlas Venture in 2010 to lead our asset-centric, collaborative investing initiative with Pharma (AVDC). Since Dave isn’t new to Atlas, this announcement provides a good opportunity to reflect on our life science investing model – one that Dave has had an important role in shaping over the past few years.
But before doing that a bit of background. After being a Harvard and MGH-trained internist, Dave honed his clinical research and corporate development skills in biotech for over a decade. Prior to joining Atlas, Dave led Infinity Pharmaceutical’s clinical research efforts and served on the executive team, helping take the company public in 2006. Over the past four years, Dave co-founded and subsequently led as CEO Atlas’ portfolio companies Arteaus Therapeutics and Annovation Biopharma. Arteaus successfully completed its Phase 2 studies and was acquired by Eli Lilly & Co in December 2013 (here), while Annovation is proceeding with its Phase 1 clinical studies in partnership with The Medicines Company (here).
Dave has helped us continue to improve and evolve our investment model at Atlas over the past two funds. A year ago, when we closed Fund IX, we shared some reflections on the six key elements of our approach (here), and they all remain very true today:
- Focusing on new venture formation and the creation of new startups
- Investing at company inception with seed-scale initial financings
- Committing significant team bandwidth in “roll-up your sleeves” roles
- Engaging in disciplined capital efficiency and derisking
- Funding only potentially transformative medical innovations
- Embracing creative and unorthodox deal structuring
This seed-led venture creation approach is aimed at reducing big false positive investments by seeking early “signals” around the science & technology, talent aggregation, and the “market” on small amounts of capital. With this strategy, we’ve built a portfolio of seed investments over the past 12-18 months, as was described back in December 2013 (here); a few more have been added (and subtracted) since then. Importantly, this seed strategy supports the launch of both virtual biotechs as well as broader laboratory-based drug discovery platform companies; the seed phase is simply the filtering period to figure out if its warrants building a real company, of any flavor, or not.
It’s worth noting that Dave has been a key contributor to many of these seeds – including co-founding Ataxion (and helping close their deal with Biogen, here) and Quartet Medicine. Dave is also busy starting a new immuno-oncology platform company, Surface Oncology, after our successful exit of CoStim earlier this year (here).
Through this seed pool approach we can take on more technically risky but big upside projects because we have explicit hypotheses around the key near term risks – and can design “killer experiments” to test them. There is obviously still significant aggregate risk in our startups after the seed phase, but in order to proceed with the next financing some key (and pre-defined) risk elements must have been favorably discharged. We believe that should bend the risk curve favorably for deals we’ve committed significant early funding to build – by both reducing the technical risks and possibly attracting early collaborative partners (funding and market risks).
Like most things, this strategy requires the right mix of people and culture. In order to practically and productively manage this type of portfolio construction and strategy in the life sciences, an organization needs to create a risk-taking but shared accountability culture.
We’ve done this in two ways at Atlas.
Within the partnership itself, we’re a flat and equal organization – same compensation, same ownership, same voice. We sit around one table every week debating the merits of different biotech deals with a champion-and-challenge culture. We also have fully embraced the concept of “hunting in packs” to bring the best of the firm to bear on deals, and in line with this have embraced a team attribution model rather than individual contributor mindset.
More broadly, we’ve assembled a fantastic brain trust of talented Venture Partners and Entrepreneurs-in-Residence (here, though several new ones have yet to have their pictures added!). This group is a mix of scientists, clinicians, and business “types” with a widely diverse set of experiences and skillsets. Dave has helped us recruit a number of great folks, including serial entrepreneur Kevin Pojasek (Solace, Satori, Kala, and now Annovation and Quartet) and early clinical development whiz Mike Curtis (Infinity, Catabasis and now Ataxion).
A key element of why this works is the veritable “around the water cooler” concept. This drug R&D and startup savvy group engages each other, and us, spontaneously and frequently, sharing ideas, questions, advice, and maybe once (or more!) in awhile complaints. Earlier this week I saw Mike Gilman sharing his “Risk: A User’s Guide” narrative at an impromptu group lunch with 6-8 other entrepreneurs. All of them are able to join the partnership’s “Monday Team Meetings” where we review progress on existing biotech seeds and evaluate new ones. The quality of the dialogue, and the frankness of the discussion, is fantastic – not only helpful, but also open and unencumbered by the politics of big bureaucracy. All of these are important elements supporting the risk-taking, rule-breaking culture we are trying to cultivate. With Dave as a full-fledged partner, I’m sure the rule-breaking part will continue.