S2 Ep2 | David Crean, General Partner, 1004 Ventures, Discusses The Knowledge Needed To Optimize The Capital Stack and Valuation

WELCOME TO VITALS, THE PULSE OF GEORGIA LIFE SCIENCESIn this episode of Vitals, Maria Thacker, the CEO of Georgia Life Sciences, interviews David Crane, a venture partner at 1004 Venture Partners, about the biotech industry in Georgia as well as on a national level. David, with a PhD in physics and an MBA, discusses the importance of a diverse funding stack, including NIH, VCs, family offices, and strategic partnerships. He emphasizes the need for founders to understand investor preferences and the importance of risk mitigation. David highlights the current economic challenges affecting investment strategies and the necessity for founders to think like investors. He also touches on the potential of family offices and the importance of business acumen beyond scientific expertise.David Crane's Background and Role in Venture CapitalMaria Thacker introduces David Crane, highlighting his role at 1004 Venture Partners and his expertise from the West Coast.David Crane shares his background, including a PhD in physics and an MBA, and his experience in biopharma, private equity, VC, and investment banking.David discusses his move from Buffalo, New York, to California and his current time split between the Bay Area and San Diego.Maria and David discuss their experiences at various biotech conferences, including the BIO Convention and the JP Morgan Healthcare Conference.Capital and Risk in BiotechMaria asks David about the recipe for a resilient funding stack for early-stage R&D in biotech, mentioning various funding sources like NIH, VCs, family offices, and strategic partnerships.David emphasizes the importance of pursuing multiple funding avenues and understanding the investor's needs and preferences.Maria shares feedback from an investor conference in the Southeast, noting the region's potential but lack of sophistication in investor relations.David advises founders to understand their investors' investment theses, fund sizes, and portfolio companies to customize their pitches and increase their chances of success.Mitigating Risk and Building TeamsDavid discusses the inherent risk in the biotech industry and the importance of risk mitigation through key experiments and milestones.He emphasizes the need for founders to focus on proof of concept, reimbursement, and strategic partnerships to improve their odds of success.Maria and David discuss the challenges of building teams in emerging markets and the role of mentors and networks in supporting founders.David highlights the importance of understanding the investor's perspective and the need for founders to think like investors when building their business cases.Impact of Economic Factors on Investment StrategiesDavid addresses the current challenging investment environment, including liquidity crises, macroeconomic challenges, and cautious investor behavior.He advises founders to have a capital stack mentality and explore multiple funding sources, including NIH, BARDA, and family offices.David notes that larger funds are increasingly looking at earlier-stage investments and the importance of transformative technologies in today's market.Maria and David discuss the potential for family offices to invest in life sciences and the need for education and domain expertise in this space.Founder-Investor Fit and Business AcumenDavid emphasizes the importance of founders thinking like investors and understanding the strategic value of their VCs beyond valuation.He advises founders to look at the VC's network, diligence, experience, and ability to provide mentorship and support.Maria and David discuss the challenges of scientific founders transitioning to CEO roles and the need for business acumen and team-building.David highlights the importance of having a viable business model and articulating a clear pathway to success for investors.Focus Areas in Healthy Aging and LongevityDavid shares his focus on cardiometabolic diseases, neurodegeneration, and oncology as key areas in healthy aging and longevity.He discusses the potential of integrating AI in neurodegenerative research and the progress being made in oncology.David emphasizes the importance of improving quality of life rather than just extending lifespan.Maria and David discuss the role of associations like Georgia Life Sciences in supporting entrepreneurs and the importance of policy advocacy.Role of Associations in Supporting Emerging HubsDavid praises the role of associations like Georgia Life Sciences in convening industry events, advocating for policy, and supporting innovation.He highlights the importance of building relationships with academic institutions and human capital in emerging hubs.Maria and David discuss the challenges of engaging small companies in policy matters and the increasing importance of policy in the biotech industry.David emphasizes the need for organizations to help entrepreneurs navigate the complexities of innovation and policy.Final Thoughts and Personal InsightsDavid shares a ...