Improving access to capital, talent a priority for Boulder biotech firms

BOULDER — As Boulder Valley’s biotechnology and life sciences industry matures, it is becoming increasingly important for growing firms in the sector to gain better access to capital and talent.

Despite the region’s earned reputation as an innovation hotbed, Colorado’s distance from the major capital centers on the coasts presents a challenge for firms trying to raise money, industry leaders said during BizWest’s Life Sciences CEO Roundtable held Tuesday at the University of Colorado.

MBio Diagnostics Inc. CEO Christopher Myatt said it is important for local companies that find success to recirculate capital back into the Boulder biotech startup bloodstream.

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“That [capital] should keep coming back and should keep creating new businesses,” he said. “That’s what creates a real self-sustaining ecosystem.”

Because biotech firms are often founded and led by people who are scientists first and business people second, it can take a drastic shift in mindset to focus the necessary time and energy on fundraising.

“It’s been a steep learning curve in coming to appreciate that you need to wake up and spend the time thinking about getting money for the company,” said Pawel Fludzinski, president and CEO of AmideBio LLC.

Companies that reach a certain size are typically able to more easily attract capital.

“There is no problem raising money for successful companies,” Boulder Ventures Ltd. founder Kyle Lefkoff said. “There’s a launch period that makes it painful for smaller companies to find the initial investors. But once these companies prove their ability to sell product and to have traction in their respective markets, money flows.”

Brynmor Rees, managing director at Venture Partners at the University of Colorado, said startups often run into hurdles with Series A fundraising. Those that do complete a successful Series A round are typically raising money from out-of-state and overseas investors.

Cash appears to be flowing more freely into cannabis and hemp technology startups.

“The Silicon Valley of weed is really in Colorado, so there’s a lot of capital” available for innovative cannabis technology firms, Golden Eagle Partners principal David Traylor said.

Compared to places such as California and Boston, Colorado’s life sciences industry is still relatively small. Because employees don’t know if there’s another company down the street they could jump to should they need a new job, there is a perception that taking a position with a Boulder company is particularly risky.

“If things didn’t work out, where would I go?” is a question workers considering a job away from coastal industry hubs often consider, Biodesix Inc. CEO David Brunel said.

The cannabis industry was pointed to as a potential safety net for scientists looking to change jobs after relocating to Colorado.

“Hopefully cannabis can continue to become more of a scientific endeavor so if [scientists] lose their jobs [at a non-cannabis related biotech firm], they can pursue a job in the cannabis sciences,” Traylor said.

MFB Fertility Inc. CEO Amy Beckley suggested Boulder’s biotech community would be well served by an office space that serves as a hub for industry startups with a shared interest in scaling up their employee teams.

Boulder-based companies face considerable growth constraints once they reach a certain size.

The city’s expensive real estate coupled with restrictive land use regulations create a situation where growing companies are often forced to relocate if they want to expand office or laboratory space, Brava Diagnostic Inc. CEO Byron Hewett said.

Real estate prices also play a role in making recruiting more challenging.

“It’s hard to attract people to the area because a lot of them feel like they won’t be able to afford a home,” Hewett said.

While Boulder presents some hurdles for talent recruitment, the high quality of life in the region provides a positive counterbalance for workers deciding whether to relocate.

“There’s a reason why people choose to live here,” Lefkoff said. “It’s not only about money and status.”
Array Biopharma Inc. CEO Ron Squarer said the region attracts the types of people with the characteristics that make for a good entrepreneur.

“There are people who want to build things and are willing to take on more risk,” he said. “Colorado provides an opportunity for people all over the world to come and build something from scratch.”

The Boulder area provides “a lot of room to breathe and be innovative,” especially compared to the hustle and bustle of cities such as New York and San Francisco, Double Helix LLC CEO Leslie Kimerling said.

Colorado Bioscience Association president and CEO Jennifer Jones Paton agreed. She said the willingness of bioscience leaders to innovate and collaborate is the “special sauce of our state and of Boulder.”