I’m kicking off 2022 with a commitment to angel investing exclusively in the bio-as-tech space. This is a reflection of my BioOptimism, but frankly there’s also a colder calculus of timing at play.
Yeah, I’m excited about bio-as-tech, but I’m REALLY excited about this exact moment in time for the bio-as-tech industry. We have reached the level of MVE (minimum viable ecosystem). We have the critical infrastructure of platform technologies, which are, in turn, lowering barriers to entry. We are at the earliest phases of what will be an explosion in bio-as-tech products.
While the product potential excites me, that’s only half of the equation. People have to want to buy the product, and tragically bio-as-tech has historically struggled to find the right way to present the value proposition. Despite the lives saved by vaccines and the broad potential of GMOs, both have been examples of phenomenal communication failures.
The good news is, I think other sectors of bio-as-tech are finally turning the tide on communication. The food side of bio-as-tech (often called plant-based or alternative meats) has generated strong demand with willingness-to-pay across demographic lines. 20 years ago it was impossible to imagine plant-based meats going mainstream; today it’s on the menu at nearly every major fast-food chain.
The time is now.
I’m not the only person who wants to invest in bio-as-tech, but it does seem like I’m one of the rare breed who are comfortable doing so. I’ve seen very strong investor curiosity, but true interest seems limited by fear. Fear from the mistaken belief that you have to be a technical expert in biology to effectively invest in biology.
Although I am an expert, I don’t think you have to be. I think we all need reliable frameworks for identifying risks and opportunities.
Over the next several weeks, I’ll be sharing the questions I ask and how I evaluate those answers. This isn’t investment advice - this is my process for learning about founders, their companies, and whether I contribute value. Although I’m coming from the perspective of investing, it’s a perspective that is also useful to non-biologists considering joining a company in the bio-as-tech space.
What I’m looking for in bio-as-tech
To change how consumers view the bio-as-tech stack, we need consumer products that are purely optional, linked to social status, and desirable to evangelize. Along with the food space (which remains relatively immature), other areas of high potential include the fashion industry and consumer packaged goods. Why?
Products that are commonly discussed
High product-visibility in day-to-day life
A significant market of consumers willing to pay a premium for virtuosity
Early adopters can gain social clout within their social circles
It’s painful to say, but I don’t think healthcare is ready for broad implementation of bio-as-tech (more on that in a later post).
How I’m analyzing opportunities
Bio-as-tech specifics
Bio-as-tech is the same as DTC and fintech, in the sense that there are some specific considerations that can have a huge impact as an investor. These are the questions that often are most intimidating when entering the space. To name a few, you want to assess:
If they can really spin up manufacturing that quickly to achieve their growth metrics.
Whether they are taking a smart technical approach
Whether they have the chops to integrate with non-biology tech stacks (software and hardware being the most common)
Business Fundamentals
Of course, there is a core set of questions that you want to ask regardless of industry. Ensuring that your investment has good product differentiation, scalable economics, market size, go-to-market, and the right team for the job is universal. For the most part, I’m going to skip these topics since there is plenty of high-quality content freely available.
Having said that, if you want to truly capture the risk and opportunity in bio-as-tech, there are some extra questions you need to ask. It’s critical that founders understand how to balance risk with regulatory constraints, and accordingly can deploy resources strategically. This is the perspective on fundamentals I will talk about.
What’s not included
This is NOT investment advice. This is not a tool claiming or pretending to guarantee success. This is me speaking openly about my process and how I think about these topics. Caveat emptor.