Building The Future Show - Radio / TV / Podcast

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Kevin Horek: Welcome back to the show. Today we have Mike Rubin. He's the founder and CEO of North Pond Ventures. Mike, welcome to the show.

Mike Rubin: Thanks, Kevin. It's great to be here with you today.

Kevin Horek: Yeah, I'm excited to have you on the show. I think what you're doing is actually really innovative and cool. But maybe before we get into all that, let's get to know you a little bit better and start off with where you grew up.

Mike Rubin: Absolutely. Well, I am from the sunny state of California, grew up in LA, and stayed there for college at UCLA. I think that's an institution known to you.

Kevin Horek: What did you take and why? Just out of curiosity?

Mike Rubin: Yeah, so I was an electrical engineering major as an undergrad, and I wish I could give you a better reason for why I majored in electrical engineering, other than the fact that my father is an electrical engineering professor at UCLA and there may be a bit of a familial influence on both the school and the major. So that was definitely a big part of why I ended up studying that.

Kevin Horek: Okay, so you have a ton of education. Do you want to walk us through the rest of that and maybe kind of some career highlights along the way up until what you're doing now?

Mike Rubin: Yeah, sure. Absolutely. I'll go through this sort of whirlwind, high level of it, but I did my undergraduate degree in electrical engineering at UCLA. From there, I ended up going to medical school. I was at the University of Chicago, ended up then doing my internship and fellowship at Harvard Medical School with a residency back at University of Chicago. In between those two stints, I have spent a lot of time in school. So I have an MD, a PhD. I did an MBA on a part time basis. I have a CFA. So, yeah, I was almost a professional student. Yes.

Kevin Horek: Okay, interesting. So walk us through what you're doing now, and how did you come up with the idea for North Pond Ventures? And let's dive into that.

Mike Rubin: Yeah, absolutely. So I'm the founder and CEO of North Pond Ventures. North Pond is a multi billion dollar science driven venture capital firm. We have three headquarters. One is in Cambridge, Massachusetts. We actually span the front facing block of Harvard Square, right next to the Harvard Coop. For those who are familiar with that area, we also have an office in San Francisco. And then I happen to be personally based in our Bethesda, Maryland office right outside of Washington, DC. We've been consistently named amongst the most active investors in the life sciences. We do everything from biotherapeutics to molecular diagnostics to research and development solutions for science. We are actively involved in some 60 boards on businesses that we've either led or co led. And importantly, we also run three academic facilities, one at Harvard University, one at MIT, and one at Stanford University.

Mike Rubin: And we're involved in both engaging and developing novel research within healthcare and medicine, as well as building businesses around those discoveries. And so in addition to being the founder and CEO of North Pond, I'm also a visiting scholar at Harvard and a visiting scholar at MIT, as well as an adjunct professor at Stanford.

Kevin Horek: Very cool. So you're a very busy guy.

Mike Rubin: I try to keep myself busy, do things that's I think are fun and impactful.

Kevin Horek: Oh, very cool. So I guess, like, I've talked to a bunch of kind of VC's over the years. It seems to me like you guys obviously, like you're putting money in, but how are you different than kind of a traditional VC type company and investment firm?

Mike Rubin: Yeah, I think we're different for a number of reasons, and I think it's the intersection of these reasons that when you put them all together, maybe differentiate us the most. First and foremost, we are mission driven, and our mission is to develop and empower breakthrough science through the vehicle of entrepreneurship to impact humanity in profound ways. So we are really driven to make a difference through science and through medicine and through entrepreneurship. So I would say that's a really important starting point for us. Beyond that, I think one of the things that is a really differentiator, which I just alluded to, is we have these deep relationships with academic institutions where we don't just fund research, but we actually engage in the research in a substantial way. So at Harvard, we won't just fund a scientist, we'll actually work.

Mike Rubin: We'll have our team of scientists and entrepreneurs work with the team on the ground at Harvard as an example to help develop the actual protocols that we think are going to best suited to building businesses on the back end, and we interact with them on a continual basis. So there's a support from a financial capital standpoint, but beyond that, there's a support in really every element that's necessary to go from pure conception of an interesting scientific concept to actually bringing that business to fruition and then supporting that business and its development over the long term. So it's really a fully vertically integrated solution for these scientists.

Kevin Horek: Okay. No, that makes total sense. So I'm curious, why did you need to kind of found the company? Because obviously, like, I guess, and maybe you just argue that it's almost like a continuation of your education. Right, right. In some respects, or, like, walk us through why you decided to actually go for this.

Mike Rubin: Yeah. So, you know, my passion in life was pretty consistent from when I was young. I always knew I was passionate about science, and I always wanted to leverage science to make an impact, and I just didn't know what the best way to do that was. But conceptually, I knew that's what I wanted, and I went through a journey of thinking, well, maybe the best way to do that is through medicine and through clinical practice of medicine. And so I spent ten years training as a physician, and many would say, gosh, do you regret spending those ten years? Cause you're not practicing medicine. And for me, the answer is resounding, no, I have no regrets, because I've leveraged that just perhaps in non traditional ways, and it was really all about having an impact.

Mike Rubin: Before I launched North Pond, I actually launched another venture business that was part of a larger organization called Sans Capital. I co founded and ran Sans Capital Ventures, which is, as the name would suggest, its venture capital franchise. And that was actually a global, cross industry venture fund, which was a lot of fun. We helped build and support businesses india, the Middle East, Africa, in financial technology and mobile Internet and financial technology. And were able to take lots of businesses public and sell businesses having a lot of great outcomes in different geographies and in different arenas. And that was really gratifying. And I learned a lot from that. And were fortunate enough to build a track record.

Mike Rubin: But what I really wanted to do subsequent to that was get to my roots of my why and where I felt like I can have the biggest impact and where I mattered the most. And that was really leveraging this medical and scientific background combined with my investing entrepreneurial background to do something where I felt like I mattered the most and where I could have the most impact. And so North Pond was really about refocusing and retrenching on where I could be the most useful.

Kevin Horek: No, that makes a lot of sense. And it's interesting because you come from that background, it probably makes investing and doing due diligence on companies a lot easier for you because you, well, because, like, for me, for example, is I would have no idea how to validate some of these ideas because I don't come from that background. Right. And it's like, sure, that sounds possible, even if it's like, clearly not possible. Right?

Mike Rubin: Right. Yeah, absolutely. The work that we do is pretty technical.

Kevin Horek: Sure.

Mike Rubin: And it's pretty early in a technical manner as well. And so there needs to be a wherewithal to be able to evaluate the scientific merit of what we're doing, not just from a scientific standpoint, but from a translational standpoint, because there's lots of great science. The question is, can you instantiate that great science within the construct of an entrepreneurial vehicle such that it's commercially relevant? Can you build a viable business model around it? Is there a customer or client base on the back end of that has a need for what you're developing? So there's a lot of different dimensions that one has to consider just beyond the scientific merits in order to build a viable business.

Mike Rubin: And just being fortunate in my career to being exposed to all these different things, being medicine, science, entrepreneurship, investing, finance, it's just really gratifying to amalgamate all those different disciplines and try to do something impactful.

Kevin Horek: Sure. So when you're looking to invest in a company, are there things that you and the team look for or kind of walk us through that? And how do you decide who to actually invest in?

Mike Rubin: Yeah, absolutely. So we're pretty systematic as an organization and the things that we look for, I can run through those considerations. So there's a number of boxes, if you will, that we sort of need to check and we need to check all of them. So the order is less critical because ultimately all these criteria need to be met. But the way we tend to think about things is as follows. One is the underlying technology and solution needs to be sustainably advantaged and differentiated. It needs to better than what's out there and needs to better in a way that it's different. Because if you're not sustainably better, then all of the cost and hard work that you're going to do is going to be for not, because it's really hard to bring something in to the market and then to compete with existing solutions.

Mike Rubin: And so just being in our industry, which is highly scientifically driven, just an alternative solution that isn't clearly better, just doesn't work. And so sustainable advantage and differentiation is a big deal, but as you might imagine, that's necessary but not sufficient. It needs to be in a compelling market with a viable business model. And so what does a compelling market mean? Some people just look at total, addressable market and want to see how big is the market. And that's interesting. But to us, it's less about how conceptually big the market is, and it's more about how much of that market you can actually capture. And do the customers actually need your solution? Because oftentimes in science, you could develop something that's incredibly sophisticated and elegant and interesting, but not particularly useful for people.

Mike Rubin: Or it might be useful, but the cost of what you're doing is prohibitive, and they're better off doing something simpler and cheaper. And so what we really need is a captive market base that looks at this advantaged and differentiated solution and saying, yes, this is something that we really need and we're willing to adopt. And then the second part of that is the business model needs to be viable, because I can't tell you how many times scientists develop something that, from a, you know, manufacturing standpoint, as an example, from a development standpoint, is prohibitive. Right? So it's amazing. It just costs $2 million, and no one has that. And maybe there's two people who have the budget to buy it. And so, you know, the business model has to work. You know, our next criteria has to do with the people.

Mike Rubin: And the people are absolutely critical, as you might expect. And you know what? We look for people who have the ability to execute, and we talk about focus and execution. Entrepreneurs, obviously are ambitious people, and they see tremendous opportunity. And so oftentimes, they're challenged to really have that focus and that execution mindset. But without that, it becomes really hard to achieve your milestones. And so we look for entrepreneurs that have that criteria. Beyond that, we look for businesses that can get to sustainability in a reasonable amount of time and a rational amount of capital. What we mean by that is none of these businesses are profitable at the outset. They're all going to need additional capital in order to survive. We have to be really thoughtful about how much capital this business needs over the life of the business.

Mike Rubin: Easy it will be to procure capital outside of our own resources, what milestones we can hit along the way, and how much time and how much capital it requires to get to sustainability. Because if this exercise is going to cost us 10 million versus 300 million or a billion, that's something we really got to understand. And we got to make sure the risk reward is aligned with the amount of capital and time, required. So those are some of the major criteria that we think about when we. We assess opportunities?

Kevin Horek: No, that makes a lot of sense. I'm curious, and you can correct me if I'm wrong with what I'm about to say, but I found sometimes with academics that are building products or some technology, they find it really hard to actually make that jump from basically building, like, a product to actually going to market and then building it into a real business. Have you found that? Or what are your thoughts around that? And then do you help them do that? Because maybe that's not their specialty.

Mike Rubin: So, yes and yes, and I think that's the crux of a big part of why we exist and what we have to offer to these academic ecosystems. And so what we've realized is there's an extraordinary amount of impactful innovation happening just at the three institutions that we're deeply involved in, Harvard, MIT, and Stanford. And yet the overwhelming majority of it doesn't come to fruition through an entrepreneurial vehicle, because there's a tremendous amount of skills required to translate that from the research lab to a viable product. And we've actually realized, from our perspective, that is the largest rate determining step. So much so that we think there's extraordinary diseases that could be practically cured or at least treated with an order of magnitude better efficacy based on what's been done scientifically.

Mike Rubin: However, being able to do all the necessary steps, from really great science to a product that could take hundreds of millions of dollars, require significant regulatory expertise, reimbursement expertise, building a sophisticated business with operational structures. Most scientists were never trained to think about all these things, and they really require people who can help them from day zero and help them cross that chasm, so to speak. And that's where we come in.

Kevin Horek: Okay, so how do you work with somebody to actually make that happen? Because that's not, like a few weeks, probably not even a few months. That's probably, like years of time and effort and. And work. Right. And connection. It's.

Mike Rubin: It's. It's a multi year exercise. And, you know, as it relates to our academic relationships, and not everything, to be clear, that we do starts in academia. We do plenty of work with businesses that either already exist or that we help assemble outside of academia. But talking about academia, because I think it's an interesting case in point, we work really early with the scientists to first understand the scientific construct and then to figure out what are the best applications. And it's a real collaborative process.

Kevin Horek: Yeah. Okay. That makes a lot of sense. So I'm curious to get your thoughts on, because obviously, when you're building a business, especially when some, like, more on the science side and you're onto, like, a breakthrough, it's really easy to, like, not sleep, get burnt out, you know, all the stuff that kind of comes with being an entrepreneur. But I think in some cases, with the space you're in, it can be even worse, because when you feel like you're just about to have a breakthrough on something, you're like, oh, just another hour and another hour turns into two days or whatever. Right. How do you kind of, or what are your thoughts around kind of managing that, either personally, professionally, and kind of, what have you found? It's worked.

Kevin Horek: And how have you kind of helped companies make sure they don't burn out at that, you know, year, two, three year mark when they're trying to get to, like, five years when the product goes live or whatever? Right.

Mike Rubin: Yeah, no, that's a great point. And we've definitely found that to be the case. And I think the best solution that we found is to put a really strong team around the scientific founders in particular, there's a tendency for the day zero entrepreneurs who come up with the concept to feel like they have to execute against every conceivable task that the business will acquire over time. And the reality is it's okay to get great people around you to help support that.

Kevin Horek: Yeah. How do you nurture that, though? Because I've had kind of some scientific. Scientific or scientist type friends that have kind of wanted to do that and letting go of their baby. And I don't blame them because I get it can be really challenging to offload some of that work to somebody else, or can.

Mike Rubin: Yeah, you know, it can be really challenging, you know, and it depends on the individual. And we've learned that the hard way.

Kevin Horek: Okay.

Mike Rubin: We've had circumstances where initially we didn't align with the entrepreneurs on what it would be, what would require to make the business successful over the long term. And then there were situations where it became difficult down the road to explain to them that, look, the business is getting to a point of complexity where you need to have a bit more divisional labor. And then over time, as we've sort of learned where we can hit snags, we try to be as communicative and upfront with entrepreneurs about, here's what it takes to be successful over the long term. Here's what we think your strengths are and how you could sustainably help support this enterprise. And here's what we think is going to need to happen in order for us to take it to the next level. And the key word is alignment.

Mike Rubin: And if there's anything that I've learned along the way of everything that we've done is things are far more successful in the long term if you can build alignment upfront. Yeah, the more experience we have, the better job we do of just being upfront. So say, hey, look, we're going to be in this together. Like you said, it's going to be a multi year exercise. It's going to be an evolutionary process, and we got to really align up front on what will entail. And if we're in this together and we trust each other and we support each other, and we're willing to build the best team around us to have complimentary skill sets, then I think we can win.

Mike Rubin: And so we try to share with our entrepreneurs what's worked elsewhere and give them as much of a perspective on what it takes over the long term.

Kevin Horek: No, that makes a lot of sense. I'm curious to get your thoughts on kind of failure, because obviously, when you're doing science, the whole idea in a lot of cases is like, prove yourself right, and there's going to be a ton of failures along the way. And I think some of the lessons that can be learned in that space can apply to any entrepreneur. So what are your thoughts around that? And how have you kind of helped entrepreneurs through that?

Mike Rubin: Yeah, no, that's a great and really critical point. Certainly, if you're going to be a venture capitalist, let alone a formative stage science driven venture capitalist, and you're going to do it over the long term, you're going to have to build a great relationship with failure or all of its cousins. That that's sort of a predicate for the work that we do. And what's helped me is not to look at failure as something as a possibility, but something as an inevitability. Right? No. No basketball player would call themselves a failure for not making 100% of the shots they take over the course of a game, let alone of a year. Everyone knows that there's sort of an acceptable rate at which you should expect things not to work.

Mike Rubin: And the reality is, if you're not failing enough, that is in and of itself a failure, because, you know, you're not really giving yourself enough opportunities. Right. It means you're not taking enough risks. And so what we try to do on our end, and we're fortunate being on the venture side, we have a large number of different projects we can support. And so for an individual and entrepreneur, the fact that some other project that we're supporting works doesn't really give them a lot of solace. But from our vantage point, we have sort of the law of larger numbers on our side. And so what we do is we start small. We have rational expectations, and we set milestones.

Mike Rubin: We align with our entrepreneurs and our scientists on what those milestones are, and then we see where we are, and it's really critical for us and for the entrepreneurs to be intellectually honest about whether we're really going in the right direction. And I think the biggest mistake that people make in my industry isn't that they fail. It's that they fail to recognize that they're failing. And as one of my mentors once told me, as an investor, losing all your money is not actually the worst outcome. The worst outcome is doubling down and then losing that money, too. Right. So that's something that we just got to be really cognizant of. And it doesn't mean that we don't support things that didn't hit their milestones. Oftentimes we do. It's just we have to be really mindful about why and what rational expectations are.

Kevin Horek: Yeah, that's interesting. Cause you're in a space that's really hard in a lot of cases to make sure that what you hypothesize about can actually happen. Right. Especially when it's creating something kind of out of nothing.

Mike Rubin: It can be. And so we do our best to actually have really discreet, at times quantitative and if qualitative, at least descriptively qualitative milestones that we all agree with. And that's where the alignment comes together. So we all understand what we're financing towards and what we're trying to hit, and we try to make it as objective as possible, such that we say, great, if you hit these milestones, then we're happy to unleash the next tranche of capital to go from here. If we don't, then we've got to retrench and ask ourselves, why haven't we hit those? Is it just taking a little longer and costing a little more, but we're generally going in the right direction? Is there a fundamental flaw in the scientific construct such that it's never going to work?

Mike Rubin: And if that's the case, then at that juncture, it's best to pause the project. Do we have the wrong group of individuals working on it? We just got to go through a pretty thorough process to understand early on if things aren't tracking why and then figure out what to do from there?

Kevin Horek: No, that makes a lot of sense. So can you maybe give us some examples? You don't have to necessarily name companies if you don't want to, but types of companies you've invested in, and then maybe give us some range of what you're looking to put in and kind of what stage a company's at or needs to be at.

Mike Rubin: Sure. So I'll give you two examples that are on different sides of the spectrum, because it gives you a perspective on the range of things that we do. So I'll start with one business that we actually developed at Harvard University with a professor at Harvard's Visa Institute named George Church, who's a well known geneticist and been involved in building a number of businesses. And what we've done with this particular project, which I think is interesting even for those people who aren't necessarily scientifically inclined, is we know the basic building blocks of life, or DNA. That's, I think, something that most people appreciate. There's a cousin of DNA called RNA.

Mike Rubin: The technical differentiation isn't really that critical, but the important thing about RNA is it's the next step in the process of going from our genes, our genetic information, to creating proteins which sort of execute all these processes in the body. And what this particular company does, actually, DNA has four basic variants. Some people learn this in school, A, T, C, and G. And it's those four letters. It's a four letter Alphabet, and it's really just a four letter Alphabet that codes the entirety of our genetics, which is pretty remarkable if you think about. There's only four different letters to play with. What this company does is it creates more letters for RNA, and it creates, yeah, a tremendously greater diversity of ways that we can create biological constructs beyond what nature allows.

Mike Rubin: And we had a lot of great success in the lab with this, and then we built a business around it. And we've actually, in addition to funding the business ourselves, raised capital from outside investors and are off to a really good start. So, that's example one of two that I would give.

Kevin Horek: Okay, so you add these other letters. Can you give us some examples of what that has potential to do?

Mike Rubin: Sure. Absolutely. So let's take a look at the COVID vaccine. The COVID vaccine, as many of us know, is an rna based vaccine, and this is actually a company that develops rna. And you can imagine when you're developing this COVID vaccine and you're trying to develop it against a specific target, and you're developing this mRNA as a component of this vaccine, that's the backbone of it. You're doing it with these four Lego blocks that have specific shapes and can code for specific things, which might be sufficient, but what we might say is, great. We want to create RNA vaccines as an example for all sorts of other things. And it doesn't have to be infectious diseases, it could be cancer, and we want it to do all sorts of complex things.

Mike Rubin: Well, what if we can make you a much bigger Lego kit, if you will? So rather than that old school Lego kit where you sort of have the blocks that are either a square or a rectangle, and you got to create something really cool looking, what if we give you some round blocks and we give you some of those cool antennas, and maybe some of those blocks are translucent, and then you can say, wow, that's pretty cool. I can actually think of all sorts of more complex things that I could build out of these Legos because you've given me all of these different tools beyond the basic kit or the kit that nature gave us. That's really part of the basis of it.

Kevin Horek: Okay, very cool. You were going to give us a second example. Do you want to give us that?

Mike Rubin: Yeah. So I'll give a second example because it's a business that's really timely. So were one of the early lead investors in a business called Kiverna North. Pond is on the board of directors of this business. And were fortunate enough to recently take it public. We had an IPO led by JP Morgan, and IPO was incredibly successful. It priced well above the top end of our range and then traded well above that.

Kevin Horek: The band was really speaking.

Mike Rubin: Thank you. We appreciate that. It was one of the more significant biotech ipos in quite some time. And I think it's not just great for this business, but I also think it's just a tremendous indicator for the receptivity of this market towards biotech assets, because I know the economy has been a little soft lately, and there was a couple year hiatus for us and for others, and being able to actually take businesses from the private realm to the public realm, let alone do that really successfully with a lot of robust interest. And so this is a business that succeeded in doing that and is doing really well on the public markets. And I think this is another cool case report, not just because we took it public and because it was a success, but because of the underlying value proposition.

Mike Rubin: And they are in a field that has captured a lot of imagination from both scientists as well as the broader public called cell therapy. And these are therapies that allow us to effectively reprogram our own immune system to attack diseases. And so they're highly personalized, and the first cell therapies developed were really for cancer. And it's still very early, but we've got some pretty powerful examples of how cell therapy can really attack diseases in a highly impactful and orthogonal way to what we would do otherwise. And this particular company is going after autoimmune diseases. These are diseases like lupus, and specifically lupus nephritis, diseases like multiple sclerosis, as well as other variants like myasthenia gravis.

Mike Rubin: I know I'm throwing out a bunch of medical terms here, but there's a whole bunch of diseases where the body's own immune system attacks itself, and it can create a tremendous amount of morbidity. And we've just had some really miraculous clinical cases of patients who were incredibly debilitated and were unable to get relief from any other agent. And with our therapy, we're really able to walk when they were previously not able to walk.

Kevin Horek: That's incredible, actually.

Mike Rubin: It really is. It is really incredible, and it's really gratifying. And I think it underscores why we do what we do. We invested in this business at a point in time where, at best, we had some early indicators in a mouse model, and it took a tremendous amount of capital and focus and collective effort by a lot of great people to work to get to this point. You're not always right, as we talked about earlier, but when you are right, it's not just remunerative, it's impactful. And that's why I went into medicine and science to begin with.

Kevin Horek: Interesting. So where does a company have to be for you guys to invest in them? And then how much capital or a range of capital are you willing to put into these businesses?

Mike Rubin: Yeah, so we invest in businesses, typically in the formative stages, so we'll get pretty early. So, as we discussed, we'll even conceive of scientific experiments that we do in the lab and support the research in academia well before we even have a business. And then if that research and academia is successful, we'll help build the business and incorporate it and put the team together and all the resources together, so we're prepared to get in that early. At the same time, we also recognize there's just lots of great things out there that we're not going to build. And we don't want to think that we can't be of use to companies that we haven't really been there from day zero. And so there are businesses that are on the earlier side of their development that oftentimes aren't commercial yet.

Mike Rubin: In the case of therapeutic businesses, it's pretty rare for us to invest in something where there's any human data. So it's typically what we call preclinical, where maybe there's some animal data, maybe there's not even animal data. But we have a really strong scientific premise and construct, and a good team, and an advantaged and differentiated platform, where we think that we, alongside the team, have a good shot on goal at being able to do something meaningful in terms of the amount of capital. It really depends on the stage of the business. But I would say on the very early end, when we're just doing research, it could start with a million and a half dollar grant. That's an academic grant, to say, let's carry these experiments and see where we are. Let's see if we have the rationale on the higher end.

Mike Rubin: Our firm's largest investments, cumulatively, over time, not just in one financing round, but cumulatively, can approach about $100 million, would be the higher end of what we would do.

Kevin Horek: That's really cool. I want to dive a little bit deeper into, because obviously, from my experience, sometimes getting into the medical space and actually getting your first few customers is incredibly difficult. It can be even if you have connections. So walk us through, or give us some advice on kind of, how have you gotten some of these companies into the door and started getting some of their first few customers?

Mike Rubin: Yeah, no, that's a great question, Kevin. And it really varies depending on what specific sub industry these businesses are in.

Kevin Horek: Sure.

Mike Rubin: So I would sort of differentiate our biotherapeutic businesses from our non biotherapeutic businesses. And for our therapeutic businesses, especially for folks focusing at our stage, it really comes down to developing and validating the molecule through a series of clinical studies. And so first, we have to validate it in animal model, and then we have to go to the appropriate regulatory authorities and get permission to actually test these molecules in human studies. And then we have to do these systematic human studies. Typically, what happens is, if we're successful on the biotherapeutic side, as venture investors in caring for these molecules in human studies and validating them, then we're going to be incredibly successful as investors without ever having actually commercialized it, believe it or not, and oftentimes, the commercialization stage is sort of left to larger organizations, who typically will acquire us well before that.

Mike Rubin: And even Kyivarna as an example. They're still in clinical studies. We could take businesses public and get to pretty significant market caps without really actually having an FDA approved product. Now, that's very different from the diagnostic and tool side, where it's more conventional.

Kevin Horek: Interesting. Yeah, I guess that makes sense. And even a new medicine, for lack of a better term for it, getting bought for hundreds of millions of dollars is kind of a cheap, really. Right. Or like anything even like a billion dollars is not that much money in the biosphere. Is that a fair assumption?

Mike Rubin: That's 100%. So, you know, we had a business that were sort of lead investors on that, you know, called dice therapeutics, which, you know, we took public and then eventually sold to Eli Lilly. And that's a multibillion dollar transaction for an asset that's still in clinical studies. Kiverna is a billion dollar publicly traded company, and it's still in clinical studies. And these types of businesses can grow pretty substantially in value just because what's imputed on the backend, if they are successful in their clinical studies. When we have a business like a scientific tool, that we're selling to a marketplace, that is really very much a conventional sales process. And so the value proposition and the process is different. And in some ways, Kevin, it's a lot more similar to anyone else trying to sell a product. Right.

Mike Rubin: I mean, our end customer could be a scientist, but at the end of the day, you have to convince someone to buy your. Your box or your product or your solution.

Kevin Horek: Yeah. Interesting. Yeah, I guess it makes sense to like. Yeah. To go to usually like, a bigger company to help kind of mass market it across the globe. Right. Because that takes a huge amount of.

Mike Rubin: Time and effort on the biopharma side, 100%. I mean, there are circumstances where we think the opportunity is so substantial that will commercialize it ourselves, but it can cost easily hundreds of millions of dollars just to get to what we call a phase three clinical study. And so then the amount of money required to really commercialize it becomes really substantial, and then we just need to be intellectually honest with ourselves of, is that really our strength, our skillset? We're really here to take things from zero to one and to de risk them and to get them to a point where they're viable commercially. But we also got to recognize that there are these massive organizations that are incredibly proficient at commercializing, and we don't have that infrastructure, and it would cost a tremendous amount for us to build it.

Mike Rubin: And maybe we're better off focusing on what we're good at and allowing other large organizations to really execute against their strikes.

Kevin Horek: No, that makes a lot of sense. So I'm curious, because you potentially do stuff before the research is even really started, how do you even know, or how do you validate that might work? Is that based on kind of your education and the team's education? Because, like, it's different. If I come to you with a napkin idea of, like, a piece of software, it's like, yay or nay. But if I'm like, I need to add, you know, a couple other letters to, you know, that rDNA, it's like, I would like. To me, I would have been like, I don't think that's possible. But to somebody like yourself, you're like, that actually might be possible.

Mike Rubin: Yeah, that's a great. That's a great question, Kevin. And, you know, what we try to do is take calculated shots on goal, and there are a number of different ways that we build conviction in that upfront. One is we have to build some comfort in the underlying scientific premise. And certainly, if this is an academic project, it does require some scientific wherewithal to actually look at the underlying premise and evaluate whether or not that's feasible based on our scientific diligence. So we definitely need to do that work. But the second part is we're working with great people, and great people in life and certainly in science are everything right. And what we found is the institutions that we're working with are highly credible. The principal investigators that we're working with are incredibly proficient at taking on these kinds of challenges.

Mike Rubin: And then we look at the early data that they have developed in the lab on these constructs. What we really just try to do is formulate a discrete set of projects that we think are executable, that they can rationally prove and say, okay, we think this next step is believable. We'll fund you for that next step. Go show us that this shared hypothesis that we have is actually feasible. And sometimes it isn't.

Kevin Horek: Yeah.

Mike Rubin: If it's rationally priced and the value proposition is big enough, it might be worth sort of taking that incremental amount of capital to de risk it, because if it works, well, great. Now you're off to the races.

Kevin Horek: Yeah, no, that's really cool. So what advice do you give to people, whether they come from, you know, your type of background or not, that is maybe looking to get into this space and maybe partner with somebody that is or complements their skillset?

Mike Rubin: Yeah, I mean, I guess the first piece of advice that I give people, you know, broadly, is to really follow your passion and your talents and believe in yourself and be your authentic self. And I give that advice because I spent enough time doing the contrary to know that it doesn't work right. There's an old saying that it doesn't matter how fast you climb the ladder, if it's leaning against the wrong wall, you're only getting farther from where you want to be. So I think no matter what you take on in life, there's going to be challenges along the way. And so you just have to make sure that your passion for what you're doing and your why for what you're doing is going to be greater than any of the challenges.

Mike Rubin: And then beyond that, and this is less of a sort of discreet tactical advice. It's more of a strategic advice, is to sort of recognize that plan a very rarely works. If your plan B works, you're incredibly fortunate, and it's usually plan C or D. And then once you're on plan D, then it's not the first tactic under plan D. And the thing that just always amuses me is, you know, and I told you this first, Kevin, this is the first podcast I have ever done, right. And I sort of chuckle because we're incredibly fortunate. We're a multi billion dollar, science driven venture capital firm. And then people ask me at this juncture, well, geez, how did you get here?

Mike Rubin: And the reality is, no one wanted to talk to me during those times where were just struggling and we had nothing, and were trying to get our first few dollars under management. And the way that. Cause I'm an entrepreneur myself, my specific business happens to be a science driven venture business. And it's really about persistence, about the willingness to try plan B and plan C and take feedback well and learn from it and iterate. And that's the best advice I can give to people, is get good feedback, learn from it, and iterate, and know that it's gonna come down to a plan C, D, or E. No, that.

Kevin Horek: That'S actually really good advice. And you brought up something that I think a lot of people forget about as an investor, you have to raise money. In a lot of cases, like, your fund didn't just. Well, it might have, or some of it might have come specifically from your bank account, but chances are all the money that you're investing in other companies didn't come from your bank account. Like, you had to go get it from a bunch of people. Right? And so you've been through the investment and trying to get investment side probably many times. Just like the people that are trying to get money from you've been through it. So you could even give them advice on it.

Mike Rubin: Oh, 100%. I mean, you know, I've worked with a very large number of highly sophisticated investors over long periods of time that span, you know, every conceivable category. And, you know, we've raised large amounts of money over the years. And, yeah, I mean, the reality is we're a business like everyone else, right? We have our own clients, we have our own product, we have our own operations. It's just, you know, everyone's got a different product and service. And ours is, our service is a venture capital and business building service. But, you know, beyond that, 100%, you know, we relate very directly to entrepreneurs because, you know, we are entrepreneurs.

Kevin Horek: No, that's very cool. But we're kind of coming to the end of the show. So how about we close with mentioning where people can get more information about yourself, North Pond, and any other links you want to mention.

Mike Rubin: Yeah, absolutely. So thank you, everyone for listening. The best way to learn more about me and about us and the work that we do is either through my website, which is northpawnmike.com dot. That's one word. Northpawnmike.com comma, or through LinkedIn, where we share a number of posts and comments on different things that we're involved in. My handle there as well, for consistency, is North Pond. Mike. So please do follow me on LinkedIn and check out my website for some more writings on the work that we do.

Kevin Horek: Perfect, Mike. Well, I really appreciate you taking the time out of your day to be on the show, and I look forward to keeping in touch with you and have a good rest of your day.

Mike Rubin: Thank you. Kevin, it's been a pleasure.

Kevin Horek: You as well. Thank you. Okay, bye.

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