By Marge d’Wylde
The Berkeley Catalyst Fund (BCF) is in its second year as an investment resource for entrepreneurial startups from the College of Chemistry. The fund is primarily focused on startups run by faculty, students, postdocs and alumni. BCF invests in new companies; long- term it will channel investment returns back to the College of Chemistry via the UC Berkeley Foundation.
The sector focus of BCF is biopharma, agriculture, medical device, clean air, clean water, energy storage, and sensors. The stage is primarily Seed and Series A.
BCF was established in partnership with UC Berkeley and the UC Berkeley Foundation and is managed by Laura Smoliar (Ph.D. ’95, Chem), Ted Hou (Ph.D. ’95. Chem) and Drew Lanza (MBA ‘87, Harvard). Smoliar and Hou first met as graduate students in the lab of Nobel Laureate Yuan T. Lee. With the guidance of the team’s commercial experience and industry knowledge, the College is creating a unique entrepreneurial ecosystem focused on the chemical sciences.
After Herbert Hooper (Ph.D. ’90, ChemE) graduated from UC Berkeley, he began his career at Air Products and Chemicals, initially working in research before moving to business development. In 1993, he left Air Products to cofound Aclara Biosciences, securing equity financing from Ampersand Capital and other investors. After Aclara went public, Herb joined Ampersand in 2002, eventually becoming managing partner. Ampersand is focused exclusively on growth equity investments in lower middle market healthcare companies, helping to build market leading companies across the firm’s target sectors.
Hooper notes, “Air Products is a great company to work for, but it was too large for me. I had a very positive experience there but wanted to be in a smaller company environment where I could have more impact. In the early days of a startup every decision is critical, and every employee plays an essential role. Aclara was one of the first companies to develop lab-on-a-chip devices, which required integrating technologies from multiple disciplines. I learned several important lessons from that experience, including the value of working with experienced investors and mentors.
Hooper’s early mentors came mostly from outside of the College of Chemistry, since the College did not include an entrepreneurial focus during his years in graduate school. At that time, private universities, like Stanford and MIT, were much more active in spinning off startup companies in science and technology, which proved to be a virtuous cycle both for raising campus funds and spawning new market innovation. UC Berkeley, as a public institution, got a later start. Of the roughly 1,300 startups that have spun out of University of California research since 1968, three-quarters have been launched in the last 15 years.
Hooper continues, “When Rich Mathies became dean in 2008, there was a change of focus at the College. Mathies was very entrepreneurial and wanted to create a chemical sciences investment fund at UC Berkeley. Mathies laid the ground work for BCF, and Dean Douglas Clark helped make it a reality. BCF is unique in a couple of ways. First, it is focused on the chemical sciences and, second, it looks to invest in research coming out of the College principally via the faculty, students, postdocs, and alumni. Another positive is that the fund can help create awareness at the College about company formation and creation.
“The College’s advisory board sees a lot of potential with BCF. Currently it is too early to say how well it will do. We need five to ten years and two to three winners to really prove the model. That said, BCF can help expose more students to how the startup process works along the way.”
When asked about the future of BCF, Hooper continues, “BCF is a very innovative concept that can benefit the College, faculty and students at multiple levels of involvement. It will be very exciting to see how it grows over time.”
Alan Mendelson (B.A. ’69, PolSci; J.D. ’73, Harvard) represents emerging and public growth companies, primarily in the life sciences. He has handled a variety of major business transactions, including public offerings, venture capital financing, and mergers and acquisitions. He explains, “It was due to a lucky break that I started working in the life science area. As a young attorney in my first job, I happened to be there when the partner came down the hallway one day looking for someone to establish a new life science company. That company turned out to be Amgen.
“The first ten years of my practice I worked on all but one of Amgen’s major transactions. Because of Amgen’s success, it helped with referrals, and I started representing other biotech companies in Silicon Valley such as Acuson, which was eventually sold to Siemens, and Intuitive Surgical, specializing in robotic surgical devices.”
Besides helping startups grow into major biotech organizations, Mendelson also serves on a number of important boards, including the College of Chemistry’s advisory board. He comments, “Being on boards is an interesting extension of the work I do. The first board I sat on was the National Kidney Foundation. Amgen’s first product, Epogen, was for the treatment of anemia associated with chronic kidney failure. This drug changed people’s lives, as they could spend less time in dialysis and more time leading normal lives. It was a pleasure to sit on that board, see the progress being made, and how a drug could make such a difference.”
Mendelson joined the board of the College in 2007 at the suggestion of Michael Marletta who was Chair of Chemistry at the time. Once on the board, Mendelson began discussing development of the startup culture with then dean Rich Mathies. “Rich is a very entrepreneurial guy and understood the challenge of trying to raise seed capital for startups. There were people interested in investing in the College – but who also wanted to support commercial opportunities. Rich wasn’t sure initially how to make that happen.”
Mendelson was asked to sit on a task force to look at better ways to make full use of the University’s patent portfolio. There he met, and worked with, Janet Napolitano, the president of the University of California. He credits her with really kick-starting the entrepreneurial culture on campus. The University’s incubators and BCF are outgrowths from that period.
He recalls, “It took several years and a lot of hard work for Laura, Ted and Drew to get BCF up and running. I was approached to support them through their fundraising arm, the Berkeley Catalyst Philanthropic Fund. At the time, this was a unique way to help create the initial capital, as it was an opportunity to donate to the UC Berkeley and have it tied to the venture capital investment fund. They were responsible for creating the first program of its kind at UC Berkeley.”
Mendelson states, “I think the fund is doing fine. They are working on getting more visibility for research endeavors in the College, and more researchers are learning that the fund exists. The question is, what should we do now to expand community and public awareness of this very unique and important fund? It’s exciting to see the startup culture taking hold at the College. I hope to see a day when students are getting recommendations for their startup skills like they do for research skills today.”