Tim Sweeney has raised over $200M for his biotechnology startup which is about to bring groundbreaking new healthcare solutions to the market.
On his recent appearance on the Dealmakers Podcast, Sweeney shared his experience bringing a health technology company to the market and getting it funded, including challenges building in a highly regulated space, and how to determine product-market fit without the ability to market a product.
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Hiking, Climbing Mountains & Entrepreneurship
Tim Sweeney grew up in Colorado, among the mountains and with plenty of outdoor activities to take on.
He went rock climbing, hiking and mountaineering. In many ways these pursuits are a lot like building a company. Tim says they are both personal journeys that you’ve got to work through. You’ve got to go through the pain, and it can be lonely at times.
The big difference with startups is that there isn’t really one peak. Some entrepreneurs throw themselves on the mountain and are set on one goal that will make them feel they’ve made it. But once you hit that peak you see another one higher up, and then another once you get there.
There may be ends of various chapters or episodes, like fundraising rounds and even selling your company. It makes sense to be clear about those goals and prepare well for them. Yet, there is always more to do.
It can be really discouraging and stressful if you don’t approach this as a journey. You’ve got to have fun on the way. It’s about embracing the ups, and the downs. That is really what is going to make everything worth it.
In fact, some of Tim Sweeney’s top advice before launching a company is to have “a little more belief, a little less worry, take some deep breaths, enjoy the ride.” Don’t forget to have a life on the way too, and be present in that. Like Tim is now expecting his third child while building his business at the same time.
Biology, Technology & Going From Academia To Entrepreneurship
This founder says that from a very young age that he wanted to be in biotech one day. He also recalls writing his college entrance essay on wanting to start a company. He wanted to make a difference and improve people’s lives in some way. He believed the way to do that at scale would eventually be through a company and creating products.
In college in Chicago he studied chemistry and biology. He dove further into medicine and molecular biology with an M.D. and a Ph.D. at Duke. From there he went to Stanford for residency in general surgery, and finally on to a post-doc in machine learning and biomedical informatics.
Looking back, being curious and following these interests and learning about them ultimately all came together to equip him to start that company.
He also met his two cofounders at Stanford. It began with Tim working with his technical cofounder in the lab. They decided that they should take it out of the lab and create a product.
After a false start trying to pitch licensing for their IP, they brought in their third cofounder, a Stanford MBA grad with market experience who could help with the commercialization process.
After putting together their business plan they had the beginnings of biotech startup Inflammatix.
They began by joining Stanford’s accelerator program to learn more about building a real venture backed business.
Tim says that most people don’t realize that when they go to a doctor, their doctor often just guesses whether they have an infection. They don’t actually have rapid, accurate tests to detect and categorize viral versus bacterial infections. The result is that the CDC estimates 40% of antibiotics are given inappropriately.
Inflammatix is solving this with rapid tests that interpret the immune response to infection. Rapid testing tools that provide better answers about what is going on with patients, and ultimately, far better treatment and outcomes as a result of greater clarity and new therapies built on this deeper medical science.
Inflammatix expects their tests to be live in the market next year.
Highly Regulated Markets & Product Market Fit
Highly regulated markets like this are especially challenging for entrepreneurs. The high barriers for entry can be an advantage once you are on the other side. Though you have to make it through the endurance race first.
On average Tim says it takes 10 years for products like this to make it from the lab to the market. Most have raised $100M by that time.
One of the biggest challenges in fundraising and growing is that you don’t have the typical opportunities to get your product into customers hands, get feedback, iterate early, and show investors your traction on the way. Not when you have to wait years for FDA approval.
They worked through this by starting with surveying prospective customers. Asking them about their need and testing the demand. They’ve also progressed through dozens of clinical studies that have provided even more proof.
Yet, you have to be raising a lot of money on the way, because once you do get approval to go live you have to be able to sprint and operate at scale.
He says knowing your market data, being great at sharing and enrolling others in the vision, and picking your investors well is a big part of successful fundraising in this space.
Tim should know. They’ve already raised around $225M, between non-dilutive capital from BARDA, DARPA and NIH, as well as venture capital firms like Khosla Ventures, Northpond, and D1 Capital Partners.
Storytelling is everything which is something that Tim Sweeney was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Listen in to the full podcast episode to find out more, including:
- Making hard pivots
- The value in going direct to the customer yourself
- The future of precision medicine