Founding Voices: Keep Your Composure, Keep the Team on Track

Originally part of our Founding Voices newsletter series. Read more insights here.

Keep Your Composure, Keep the Team on Track

Setbacks and adversity are unavoidable during the company building journey. It’s also natural for your confidence to waver after a series of tough outs. But you need to stay centered and relentlessly look for silver linings. Not just for yourself, but for your team.

“Early startups are founded on energy, meaning there’s going to be a lot of downs, a lot of bad news, and a lot of rough spots. If as a leader, you’re not bringing a mindset of abundance, you’re not getting everybody up, you’re not making everyone believe, you’re not re-centering everyone on the vision, the startup fails and it falls apart. As a founder you have to make people believe in something that doesn’t exist and yet it could change the world.”

MANNY MEDINA
Co-founder and CEO, Outreach

 

Your team is here because you sold them on the vision. But while your people can be as scrappy and as gritty and as tough as they come, there are going to be days where it’ll be hard for them to see the forest for the trees.

In moments of apprehension, your team will naturally look to you to light the way and remind them of the big picture. For that reason you must project optimism and clarity of purpose, especially when there’s turbulence ahead.

“Building a company is really hard,” says Rajeev Batra. “You’re fooling yourself if you think otherwise. But if you have to commiserate, do it with your mentors, or your peers. Because in the trenches, with your team, you need to be steadfast. If the sky is falling but you keep your cool, people pick up on that, and it’ll help them to power through.”

Navin Chaddha

RAJEEV BATRA
Partner

Enterprise

4 Insights from Investing in Windfall

I am excited to share Windfall Bio, emerging from stealth today.

Windfall converts methane emissions from dairy, agriculture, oil and gas into high grade organic fertilizer. Mayfield incubated and led the inception round of $9M in late 2022. The following are some takeaways from Windfall that can be applied by entrepreneurs fighting climate change.

Solving methane buys decades for us to win the climate war

Josh Silverman holding a methane meter in a dairy barn showing dilute methane measurements

I hadn’t really heard about methane until last year. And certainly not as the molecule with a gun to the planet’s head. Yet I began to learn that around the world, 24 hours a day, a gas known as methane is belched, farted, released and seeped from livestock, chickens, gas generators and pipelines into the sky, where it spends about 20 years trapping 85 times more heat than CO2. These methane emissions are the unknown front line super-villains of climate change. According to a study published in the journal “Environmental Research Letters” in 2021, reducing methane emissions by 45% by 2030 could help to avoid about .5C degree of global warming by 2045 – a significant slowing of the temperature rise, buying humanity decades to win the war on climate change. Well, let’s go after methane then.

Of course, there is a catch. Most methane emissions are 100ppm (parts-per-million)-1000ppm at the source of emission. For contrast, the critical point of runaway global warming is 400ppm of CO2 in our ambient atmosphere. So this methane is incredibly dilute. Because of this, dilute emissions are nearly impossible to capture and cannot be burned off. Trying to use it for fuel is inefficient since concentrating it is far more expensive than using natural gas – which is a whopping 900,000ppm. People have so far focused mitigation efforts on limiting natural gas use and stopping cows from belching methane. Neither work because society wants and needs milk, meat and heat. So the world’s worst greenhouse gas goes up, up and up while we all run out of time.

If we don’t bend the curve of warming soon, widespread loss of life and hospitable zones will occur – from the 2023 IPCC report

Josh Silverman, serial entrepreneur, founder of Calysta, and the world’s leading methane-eating-microbe (methanotroph) scientist had the insight that evolution created a perfect solution for capturing this dilute methane. Methanotrophs, his life’s work. Methanotrophs emerged early in the planet’s evolution as simple bacteria that ate the most abundant energy source, the methane seeping from the oxygen-poor vents and rocks. As methane levels fell, they evolved to capture whatever was available. Today, they efficiently catch stray methane and use its energy to grow – exactly how plants and trees got really good at using dilute CO2 to grow over thousands of years. Together, they form the backbone of our ability to control greenhouse gas sequestration. So back to dilute methane. How can these tiny methane eating bacteria help us?

By literally eating dilute methane emissions at their source. Up to half of methane emissions are dilute forms emitted from agriculture, oil and gas operations. Dairy herds, swine manure piles, cattle, chicken coops – they all produce enormous amounts of dilute methane. Methanotrophs, Josh reasoned, can be harnessed to capture this methane and use it as food to grow, making them our best front line soldiers in the war on climate change. 

His proposal was to pipe the dilute methane from the dairy barns and sheds into simple containers and compost that housed the methanotrophs in conditions similar to their natural environment. There, they feed on the methane and pull nitrogen gas from the air to make their amino acids. This process creates a high quality biomass that plants naturally use for nutrients, creating a win-win situation. Methane from dairy herds are destroyed while creating organic food for plants. The wedge market is dairy since they have no methane solutions and the milk they produce can become more climate friendly.

His proposal was to pipe the dilute methane from the dairy barns and sheds into steel containers that housed the methanotrophs. 

Make a better fertilizer not a new product

Last summer, on a misty, cold and drizzling day I was walking to the newest volcano eruption in Iceland. It had erupted just a couple days prior, and only a couple thousand people had trudged their way across the virgin Icelandic landscape for almost 10 miles, across untouched lava fields covered with inches-deep fields of moss. I kept my head down during most of the hike to avoid the rain and wind stinging my face, giving me plenty of time to study the narrow path getting trampled through the moss. 

It struck me then. The underlying igneous volcanic rock was being pulverized into a mixture with the moss being ground together underfoot, speeding hundreds of years of rock weathering into an afternoon. I was watching volcanic rock become dirt mixed with ground up moss, the nitrogen, phosphate and potassium, amino acids and fats serving as a nutrient-rich base mixed for the volcanic particles. This, I realized, is fertile soil. Primordial soil, the way soil evolved on our planet. And from this new fertility, seeds can gather needed nutrition and become towering plants and trees. And it all started with microbes, lichens, algae and mosses growing on the cooling surface of Earth.

Icelandic rock and moss turning to soil while hiking to Geldingadalur

Methanotrophs, Josh realized, can do the same job as the moss. By using methane as the carbon and energy source, Josh’s proposal of growing methanotrophs in dirt would create high quality organic fertilizer while eliminating the methane from our atmosphere. It happens like this. As the methanotrophs eat the methane, they double, and double and double. Every time they double they are pulling nitrogen from the air, and tearing it apart to make amino acids. These nitrogen-rich amino acids enrich the dirt and become readily available as food for plants. 

The resulting fertilizer is different from the synthetic pure ammonia used today. It is organic biomass and so resembles pre-industrial age soils, which are healthier and more fertile than those of today. 

Farmers buy fertilizer, so the best product to sell them is a better fertilizer, rather than something they are not used to buying. Farming is a very low margin, difficult business so farmers want to minimize risk. By offering them a replacement product rather than a new one, Windfall will shorten the sales cycle, and provide a faster go to market strategy.By offering them a replacement product rather than a new one will shorten the sales cycle, and provide a faster go to market strategy.

Great people want to work with other great people

The early Windfall team onsite at a dairy farm

I got to know Josh through my friend Tom Baruch, legendary climate investor and senior advisor to Breakthrough Energy Ventures. He introduced us knowing Josh wanted a partner to work through commercializing his methanotroph idea. I was game. 

The first step was really understanding the problem and its extent. The second was examining the proposed solution and the bench scale prototypes that gave us confidence in the technology. Together we worked on the business assumptions, and the go-to-market strategy. What emerged was a simple pitch deck, compelling enough to get good people excited. We funded Josh to build Windfall in October 2022. Things went fast after that. 

Recruiting the best team to execute the vision was next. The steps to build the team were in two parts: first, identify the core skill sets needed for the seed milestones, then find the best people with those skills.

Josh at work on methanotrophs

Jordan Smith, an engineer with decades of experience designing anaerobic digesters (bioreactors for organic waste eating methanotrophs), signed on first. Carla and Judy, both previously senior scientists at Calysta, have spent their careers becoming methanotroph whisperers. The yin to Josh’s yang arrived in Frank Crespo, former Chief Procurement Officer at Caterpillar and former Chief Supply Chain Officer at IndigoAg as Windfall’s COO to make sure the operational plans were focused and realistic. Steve Chu, former secretary of energy and Nobel laureate, joined the advisory board along with top USDA/EPA regulatory expert Daniella Taveau. Louis Stenmark, their marketing associate, is also an Olympian track athlete, competing for Australia in the 2024 Olympics. Tom Baruch joined the board. As the team came together, the agricultural industry started hearing about Windfall. Cavallo, the VC arm of Wilbur Ellis (largest agronomy company in the country) invested. TetraLaval, the world’s manufacturer of milk cartons and dairy equipment, invested. SOSV/HAX invested to enable mass manufacturing of the sensor enabled steel boxes. The company, advisors and investors are aligned and committed. 

The best sustainability company is the best product company

Rendering of the simple container fertilizer bioreactors

Josh worked out a critical insight early on. Synthetic biology fails when you try to use high tech to build a low tech product. His answer to make a better fertilizer was less technology, not more. Scaling up synbio companies requires a cathedral of steel and pipes hooked up to cauldrons of bubbling bioreactors, engineered to get organisms to make something they normally don’t. In contrast, for Windfall he designed a box filled with dirt and bacteria, and that’s about it. This creates high gross margins since there are few costs. With the price of dirt being cheap and organic fertilizer being around $900/ton, there is a lot of room to build a profitable business. 

The farmer wins. They get methane free milk. See, they want to sell their products to consumers who have woken up to the carbon footprint of dairy. Dairy is under attack, from almond milk, oat milk, and more. A carbon friendly seal of approval on cheese and milk products will help win those consumers back. The farmer wins again with access to a more natural, lower cost, live organic fertilizer. And the planet wins. It gets primordial soils back, land that is more harmonious with nature and a reduction of methane, cooling our planet and buying us time to win. 

Concept art of a label communicating the value of methane free milk

The long term vision of success is a decentralized manufacturing network of live fertilizers across the country which creates a resilient food supply chain, impervious to regional or global disruption. Which is important because when food does not cross borders, armies will.

The idea that capitalism is required to fight climate change may seem odd. Or even inflammatory. But customers will buy products based on self interest. So the best sustainability companies are also the best product companies. Which is why Windfall is focused on innovating and delivering better fertilizer for farmers.

Partnering with Vartana to Power Frictionless B2B Sales Closing & Financing

Kush Kella and Ahmed Sharif, co-founders of Vartana

In B2B enterprise software, time kills all deals. This is especially true in the deal closing process, where there is a shocking amount of offline back and forth between vendor, buyer, and financing teams that takes weeks and causes deals to push to the next quarter or die all together. As a former CEO, I have felt this pain directly, and it has only gotten worse. And we aren’t talking about a small amount of money: globally there is $10 trillion in B2B spend every year.

Two entrepreneurs – Kush Kella and Ahmed Sharif – lived these problems helping run operations and finance at Fleet Tracking Platform Motive (previously KeepTruckin), where they were involved in setting up a deal desk & sales closing function and establishing financing options for Motive’s customers. This experience led Kush & Ahmed to an insight that the B2B sales closing process is a mostly offline, high touch, disjointed experience between the vendor and buyer, especially as it relates to financing options.

Kush & Ahmed started Vartana to build a digital, modern experience for the B2B Enterprise Sales Closing & Financing process, a need that has become even more critical in the current economic environment. Their checkout platform has integrated proposals, signatures, payments and self service financing. Today, 30% of B2B technology purchases require payment flexibility, but financing is a poor experience that is usually an afterthought as part of a deal, creating undue friction in the sales process and delaying signatures. With Vartana, financing is integrated, digital, and on demand, resulting in a much better experience for both vendor and buyer. This in turn improves conversion, sales cycles, order values, and helps both vendor and buyer manage cashflow.

No alt text provided for this image
Vartana’s Checkout & Financing Platform for B2B Enterprise Companies

Importantly, Vartana follows an asset-light financing model, providing a fully digital, low friction customer experience that acts as a digital enabler of sorts for banks that seek these high quality loans. The end result is a win-win-win. The vendor’s sellers get deals closed faster. The vendor’s finance team gets paid up front. The buyer gets to pay monthly. The banks get streamlined access to investment grade loans. The proof is in the results. In the last 12 months, Vartana achieved more than 600% growth in YoY financing processing volume with customers like SamsaraVerkada, and Barracuda.

Vartana’s mission is to become a new platform that can manage B2B Sales Closing & Financing, with the opportunity to enable transactions for the multi-trillion in IT and B2B spend. I’m thrilled that Mayfield has led Vartana’s Series A, and I’ve joined the board to support Kush, Ahmed & teams’ mission to create friction-free B2B commerce. Onwards & upwards.

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2022 Year in Review

2022 continues to test our resilience on the economic, political, and social fronts. However, as a People-First firm with a 50 year plus history of investing through up and down cycles, we remain eternal believers in the power of entrepreneurs and their ability to build a bright future. Our team of founders turned investors is eager to partner with entrepreneurs who are changing the way we live, work and play, and we look forward to our shared inception to iconic journey. Join us as we look back on 2022 and forward to the journey ahead.

October Human & Planetary Health Newsletter

In this edition:

  • Next-Gen Biomanufacturing Company Prolific Machines Launches with $42M to Build the Assembly Line for Biology
  • Mammoth Co-founder & CEO Trevor Martin & Ursheet Share Company Building Learnings on TechCrunch Live
  • Arvind Shares his POV on Planetary Health Investing & What he Looks for in Companies with Axios and BIOS
  • UBCO Partners with Chemix to Create World’s First Ultra-Safe, High-Energy Cobalt-Free Battery
  • Endpoint Health Launches New Precision Immunology Program, Appoints First Chief Medical Officer
  • Mirvie Expands Leadership Team with Appointment of Alison Cowan, M.D. as Head of Medical Affairs

Next-Gen Biomanufacturing Company Prolific Machines Launches with $42M to Build the Assembly Line for Biology

The manufacturing process for cultured meat has historically been difficult and expensive. We are thrilled to partner with the Prolific Machines team as they pioneer a unique manufacturing approach for cultured meat cells and beyond that will transform industries by creating an assembly line for biology. Arvind shares five insights from investing in Prolific below.

Read more >>

Mammoth Co-founder & CEO Trevor Martin & Ursheet Share Company Building Learnings on TechCrunch Live

Mammoth Biosciences CEO & Co-founder Trevor Martin joined Mayfield’s Ursheet at TechCrunch Live for a candid conversation on Mammoth’s inception to iconic journey.  Watch the recording to learn how to create built to last relationships with co-founders and investors, align around the vision and mission, recruit a world-class team, turn an audacious goal into tangible progress, and more.

Watch here >>

Arvind Shares his POV on Planetary Health Investing & What he Looks for in Companies with Axios and BIOS

Arvind sat down with Megan Hernbroth at Axios to share insights into his investment strategies and the future of climate technology. He was also featured in a Q&A by BIOS where he shared advice for founders preparing to fundraise, what he looks for in founders and inception-stage companies, finding product-market-fit in capex heavy companies, and more.

Read more >>

UBCO Partners with Chemix to Create World’s First Ultra-Safe, High-Energy Cobalt-Free Battery

UBCO, the global leader in electric utility vehicles, has partnered with cutting edge AI-powered battery platform Chemix to commercialize sustainable, ultra-safe, and high-energy cobalt-free (Co-free) Li-ion battery technology. Chemix is using AI to develop battery chemistries similar to how AI has been applied to speed up drug development, and this collaboration will help reduce battery dependence on rare earth minerals.

Read more >>

Endpoint Health Launches New Precision Immunology Program, Appoints First Chief Medical Officer

Endpoint Health has acquired Iconic Therapeutics as part of its newest precision immunology program, which aims to transform immune-mediated inflammatory disease treatment with novel precision medicine strategies. The team also welcomed Ransi Somaratne, M.D. as their first Chief Medical Officer to lead the company’s clinical strategy and drug development programs.

Read more >>

Mirvie Expands Leadership Team with Appointment of Alison Cowan, M.D. as Head of Medical Affairs

Mirvie, a pioneer in predicting unexpected pregnancy complications, has welcomed Alison Cowan as Head of Medical Affairs. Dr. Cowan will guide Mirvie’s continued clinical and commercial development of the proprietary Mirvie RNA platform, which is first to predict preeclampsia and preterm birth months before they happen by revealing the underlying biology of each pregnancy.

Read more >>

SyntheX and BMS Partner on Drug Development Deal Worth up to $550M

It has been almost six years since I backed Maria Soloveychik and Charly Chahwan, founders of SyntheX, for an idea to invent a new way to find and make cancer drugs. They were two young, outsider scientists in IndieBio’s third class and were massive underdogs. The idea they proposed – to engineer cells to accelerate and improve drug discovery, could prove incredibly valuable if successful. Today, SyntheX and Bristol Myers-Squibb announced a research collaboration totaling up to $550 million dollars to discover and develop protein degrader based therapeutics. The road traveled has been hard. The road ahead will be at least as hard. Charly and Maria welcome the challenge.

As a board director at SyntheX, I have had a unique view into their journey to this milestone and gained a deeper appreciation of what it takes to make a biotech company work. I first met Charly and Maria when they applied to IndieBio with the idea to make new cancer drugs by using synthetic biology to discover novel ways to disrupt protein-protein interactions in signaling pathways crucial in cancer. Many cancers come from the wrong proteins binding and communicating, creating an out-of-control feedback loop that makes cells divide without stopping. This is a tumor. Break the connection, stop the cancerous tumor (is the idea). SyntheX designed their cell-based platform to simultaneously test billions of short peptides to disrupt a crucial cancer-causing protein-protein interaction in a single petri dish. It’s like finding a perfectly shaped needle in a needlestack.

Using this discovery method, the cells began revealing the secrets of these key proteins. The SyntheX team discovered a new mechanism of cell death caused by the catastrophic release of calcium within the cell by disrupting a crucial DNA repair protein. They advanced their lead compound that caused this and confirmed the effect also happens in mouse models. They further determined that this calcium-based cell death is immunogenic and engages the immune system to recognize the cancer cells as they die. In parallel to this program, the team continued to evolve their discovery technology to be ever more powerful.

Charly and Maria, the outsiders, began to attract attention from insiders. Decorated industry veterans like Dr. Leonard Post, the scientist behind the best in class PARP inhibitor, Talazoparib, (among his many other contributions to cancer drug discovery), joined the advisory board. Investors noticed as well. IndieBio, 8VC, OMX and others joined a $6M seed round. Based on conviction in Charly and Maria, SyntheX became the single largest investment made at IndieBio and SOSV at the time.

While working to expand the internal pipeline with insights into mechanisms that modulate long deemed ‘undruggable’ proteins, Maria and Charly’s creativity led to the development of another platform that addressed a key drug discovery bottleneck for an up and coming modality – Targeted Protein Degraders. By modifying the circuitry of the platform they created ToRNeDO, with the focus of discovering molecules that can bring two different proteins together, aptly called “molecular glues”. In this case, these glues allow for a particular protein (known as an E3 ubiquitin ligase) to tag a second target protein for destruction. By getting rid of a protein that is miscommunicating in a cell and causing disease, you can treat that disease with potentially less toxicity in patients and evade downstream resistance mechanisms. Meanwhile, the internal pipeline that SyntheX is developing has gained interest from insiders at several pharma companies after they shared their results at various conferences. These initial relationships were key in building the scientific credibility of the team in the broader pharma community and accelerated the path to partnership.

Platforms aren’t products, products are products. It is so easy to fall in love with how you do something but the world only cares about what you sell. Therapeutics companies are no exception. They develop and ultimately sell drugs that treat disease. Designing the right business models make and break companies, and platforms can seduce founders into a CRO business model (screening deals with no shared downstream revenues), hoping it serves enough validation to attract other investors. In the new world of higher interest rates there is far less interest in this approach (the exception would be if enough revenues could be generated at a high enough operating margin to finance the clinical development of internal assets). Over 25% of public biotechs (128 companies as of last month) are trading at or below their cash balance, many far below. A common phenotype of these companies is a promising platform and assets that are years away from an IND (Investigative New Drug approval) or going into humans. Wall street doesn’t care anymore – deliver amazing drugs or get crushed. The biotech index XBI, which tracks the stock price of all biotech stocks on Nasdaq, is down over 54% since its high almost 2 years ago.

Yet for all the lost wealth and blood on Wall Street, the investments into oncology are creating real value for patients. Checkpoint inhibitors, cell therapies for blood cancers, targeted antibody therapies and newer antibody-drug conjugates are getting approved and into patients in record numbers. 2018 saw the largest drop in cancer deaths in history, and then 2019 beat that record. 1.5% fewer people are dying from cancer every year. This adds up. In 1975 the 5 year survival rate of cancer was 49%. Today it is 69%. This is remarkable progress for such a complex disease. Despite the public market pain, oncology is still a great sector to invest in. Not only are there many huge opportunities for new biotech startups, there is still so much progress to be made before we are able to cure cancer for humanity.

SyntheX has had a long history with BMS. They got to know the BMS (then Celgene) team while at JLabs/MBC biolabs, where after presenting their approach and progress, they were awarded the “Celgene Golden Ticket” for two years in a row. In addition to a free bench space at the incubator, the SyntheX team formed a scientific relationship with key BMS scientists who got to know Charly and Maria. This was critical to build trust between the teams for such a large deal with a relatively small startup. With that trust in place, and SyntheX ready to seek a large partner to move their protein degradation platform further into small molecule development, this partnership was proposed to discover and develop drugs to go into the clinic. These deals take a long time, and it is important to budget runways accordingly. Standing by founders to give them the space and confidence to do what is needed, even in the inevitable times of stress is critical.

I am excited to continue standing by Charly and Maria in their quest to treat cancer. Cancer is personal. For Maria, she watched the devastating impacts of cancer on loved ones growing up and wanted to take action. For Charly, it began as a sixteen year old when he and his family survived the war in Lebanon, yet lost four family members to cancer in the next year. This shocked the young Charly into devoting his life to understand and cure cancer. For me, my mother has been battling cancer for years. Millions of others pray for their loved ones to get better. The road will be hard, but that is why we walk it.

 

References:

Healthcare is saving the world. Software is eating very little of it.

Naver to Acquire Poshmark

10 Questions with Arvind Gupta | BIOS