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Monday, August 12, 2013

If a Biotech Falls In Seattle...

The Accelerator Corporation recently saw one of their graduates, VLST, fail. Two months later, Xconomy, local "news agency" on the technology world in Seattle picked up on the story. The question here today is why those $50M biotech trees falling are not heard in the forest of Seattle business reporting.

In 2009 the Seattle PI shut down newspaper operations. Most of the reporting staff went away. This was a tragedy. Newspaper reporters wandering around town looking for something interesting to write about was perhaps an old way of living. Herb Caen created a 60 year portrait of daily San Francisco life. Mike Royko in Chicago was an irritant to local politicians. While the Seattle PI did not have such a character as Caen or Royko, they had people with just as much interest in their local scene. It would be hard to imagine the PI missing a story such as a local $50M biotechnology company, in the heart of the Paul Allen "build it and they will come" biotech corridor crashing and burning. The Seattle Times??? In my Utopian world, a Caen/Royko type reporter sits at the BBQ joint around the corner from VLST eavesdropping on the table behind his seat at the bar. They're talking about losing their jobs. This is important to the local reporter. Jobs mean news. Psssst. Someone slips a napkin under his plate and walks away. "VLST is shutting down." The reporter has a story to chase after.

If there were such a reporter he would have had plenty of stories to chase after coming from the $212M fundraisers at the Accelerator Corp. If you check on their website, you won't find the fact that VLST has shut down. They only mention the $55M series B funding back in 2006. Look! Here is another viewpoint from a former Accelerator company founder, Johnny Stine of Spaltudaq (now Theraclone):

Try finding stories from the local Seattle news sources about the tankings or the MIAs.

Many times I feel like a nattering nabob of negativity with my approach to the biotech biz. Yet I have always known that the people running these companies were not planning on success. They were planning on making a profit somewhere between the press release on their successful financing and their eventual silent demise. As an investor or an employee, your contribution to their success will not serve you well in the long run. And the long run is where you must be invested. The cargo planes must land on your runway in order to be considered a success. The list here, taken from the Accelerator website and edited by Johnny Stine, ousted leader of Theraclone, is news. Would you invest in Accelerator? Would you send them a CV?

There is a much bigger story behind the VLST failure. There is the huge failure of the Accelerator Corp. Then there is a huge failure of the accelerator/incubator investment model. Then there is our system of succeeding without ever developing or selling a product. There is a story that presents a warning for our future. We can piece the story together and develop a model for success.

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