Summary

On the latest episode of The Bioverge Podcast, Gwen Cheni, Partner at Khosla Ventures, sits down with Neil Littman to talk about her journey from Wall Street to early-stage TechBio investing, how that has shaped her investment approach, and what emerging technologies she's most excited about today!

Listen on iTunes: https://lnkd.in/ga5cGVRn

Listen on SoundCloud: https://lnkd.in/gu4wTN3i

Listen on Spotify: https://lnkd.in/gpY4r-vD

Transcript

00:29
Danny Levine (producer)
Yeah, we've got Gwen, she and I on the show today for listeners not familiar with Gwen, who is she?

00:34
Neil Littman (host)
Gwen is a partner at Khosla Ventures on the investment team. She was previously a partner at Indie Bio and sosv where she covered bio and artificial intelligence. For those not familiar with Indie Bio, we did a deep dive on the program with Arvind Gupta and Pobronson on the fourth ever episode of this show about a year ago. Give that a listen if you're interested to learn more about what they're up to at Indie Bio. Prior to Indie Bio, Gwen was the founder and Managing partner at Galapagos Ventures, an early stage venture fund focused on the intersection of biology and AI and ML or machine learning. Gwen was on the Board of Advisors at Singularity University Ventures, which is an impact focus accelerator. Prior to joining the venture world, Gwen spent 18 years on Wall Street investing in public equities. She started her career at Goldman Sachs and JP Morgan and was a portfolio manager at a 300 million dollar innovation themed hedge fund.

01:31
Neil Littman (host)
She also has experience doing wet lab research at UCSF in Immunotherapy in the realm of Glioblastoma. I am incredibly excited to talk with Gwen today and welcome her to the show about her personal journey from Wall Street to the venture world. Even more so, she has lived at the intersection of Biotech for most of her career. I'm really excited to learn more about her investment thesis at that intersection.

01:59
Danny Levine (producer)
Now a bit about moving from Wall Street to early stage investing, but how unusual is Gwen's career path working that way?

02:11
Neil Littman (host)
I think it's fairly unusual, although probably more common these days than it has been in the past. Typically you think of companies making the progression from an incubator an accelerator like Indie Bio to being backed by venture capitalist to potentially going to Wall Street and going public and all those sorts of things. Gwen and I did this many years ago as well as you make the reverse journey. There's a whole foundational skill set that for me, I brought with me to early stage investing that I learned on Wall Street. I want to talk to Gwen about how applicable what she did on Wall Street is to her role as an investor at Coastla. There's a lot of things that are very different as well. I'm excited to hear how Glenn thinks about creating value in the early stage world, how to think about valuation. Right.

03:11
Neil Littman (host)
Things in the early stage of Venture World are not as driven by financial metrics, for example, like they are with public companies. I'm excited to get into some of those nuances and hear Gwen's take.

03:23
Danny Levine (producer)
How do you think that might shape the perspective? Does it play a role in thinking about exit strategies or other things.

03:32
Neil Littman (host)
I'm sure it does to a degree. I mean, I think there's a lot of what Gwen probably learned on Wall Street that's applicable to being able to evaluate and analyze a company, whether it's from the financial perspective or just doing diligence on the science. Right. I mean, diligence is diligence at the end of the day. I'm sure there's a lot of tools that she has that are applicable. I think it does give her probably a unique perspective in terms of the appetite for public market investors and what public market investors may be looking for in a company or early stage technology and what she needs. To do as an early stage backer of companies to get a company to the point where they might be attractive to the public markets. I'm sure that's probably a unique insight that Gwen has. I'm excited to talk to her a little more about that and also that transition.

04:20
Neil Littman (host)
Right. Gwen has spent most of her career at that intersection of bio and tech, from her days on Wall Street to what she's doing now in the venture world. I'm really excited to learn about what excites her the most about those areas, what they're investing in at Coastal, what they're looking towards in the future, and get into some of those details.

04:39
Danny Levine (producer)
What are you hoping to hear from her today?

04:41
Neil Littman (host)
Yeah, I'm hoping to hear exactly that. Right. Their investment thesis at Cosla, maybe some of the companies they've invested in recently. What gets them excited at the end of the day? What are some technology trends that they're excited about, why Gwen is so excited and why she chose to spend most of her career at this intersection of bio and tech. I think there's a lot to dive into from the business models of the companies that they're looking at to some of the nuances of the science.

05:05
Danny Levine (producer)
Well, you're all set.

05:07
Neil Littman (host)
Let's do it. Danny, Gwen, thank you for joining us today. I am incredibly excited to welcome you to the show.

05:15
Gwen Cheni (guest)
Thank you for having me.

05:17
Neil Littman (host)
Today we are going to talk about investing in early stage biotech, the opportunities being created by the increasing convergence of tech with biotech, and your personal journey from Wall Street to early stage venture investing, which is where I'd like to start. One of the things we like to talk about on this podcast is culture. There's two culture related topics I'd like to start with today. First, we usually talk about culture in the context of early stage startups on this show. You spent 18 years of your career on Wall Street, first as an equity analyst and later as a portfolio manager of a 300 million dollar innovation themed hedge fund. How different do you find the worlds of Wall Street and managing a hedge fund to the world of venture capital and venture investing?

06:05
Gwen Cheni (guest)
Really great question. I get this often I often joke that I started on the dark side just because a lot of folks in VC think of Wall Street folks as the dark side. I have to clarify though, I work for investment banks, but I was never an investment banker. That sort of makes everyone feel better. Comparing the Wall Street side, public equities, which is you can essentially think of public equities as very late stage companies. Early stage companies is where I focus right now. I'd say if you're thinking about switching over to Early Stage Venture, don't do it if you think it's cushy because it's definitely a lot more work than when I was at hedge funds. Hedge fund managers, they like to say we work 70 to 100 hours per week. I'd say that the total number of hours for Early Stage Venture is definitely more than that.

06:55
Gwen Cheni (guest)
Especially if you're a full stack VC where you do the technical diligence, the business side of things, and then you get the companies into the portfolio and it's on you to work with the companies all the way until essentially IPO. That's a lot of work and most of that work is it's unlimited hours. We were just chatting about the holidays. You don't really take any days off. There was a tweet that got a lot of attention where one VC said there's no out office message for Early Stage founders. If you're a full stack, hands on VC, there's no out office message for you either. I mean, even if you put that on, I'm still checking email every day. I'd say it's definitely not for less work. I'd say clearly the one difference is even when I was in the hedge fund side, I was in long only or I was in very concentrated positions where, maximum portfolio had 27 positions.

07:58
Gwen Cheni (guest)
It was never In a day trading shop. That part of it translated directly into Early Stage Venture where when you're in a company, you're in the average holding period at some of the funds that used to work at were eight years, which is exactly Early Stage Venture. All these parts, I think, translated directly. I'd say that the benefit for me has been intuitively. Think about business models, how the company is going to make money, what's the market, who are the other competitors, how are your customers? First of all, payers and customers might be different parties, right? How are your customers using the product? What are the incentives of the payers? So these just come automatically to me. I parallel track both the technical side, the science side that I'm very passionate about, but I'm not distracted enough to not care about the business side. So that's been a welcomed advantage.

08:56
Neil Littman (host)
Gwen, you mentioned the term full stack VC a couple of times for our listeners. Can you describe what you mean by full stack VC?

09:05
Gwen Cheni (guest)
Happy to, because I just came up with it. I didn't know how to explain this until a few months ago. I remember I was talking to actually a Stanford professor in engineering, and I was asking him a couple of questions. He looked at me puzzled because he looked at my background and he said, oh, I thought you just do the numbers side, right? I said, no, I think this might be particular to Coastal Ventures where I am right now. The partners do everything. There's zero outsourcing of the work, of the technical work, of the financial work, and then once you get the companies in, it's on us to work with the founders. I think some of our partners have admins, but the admins do more of the scheduling of calls and whatnot. None of the zero of the decision making is outsourced.

10:03
Neil Littman (host)
That's really interesting, and I do want to dive into your process at Kosla, but before you do, I want to go back to the culture question, particularly as a woman on Wall Street, right? I mean, at the time you were coming up on Wall Street, it was very much a male dominated culture, probably still is in many respects. Did that pose any particular challenges for you as you started and built your career on Wall Street?

10:29
Gwen Cheni (guest)
This is a question I get a lot as well. I think back in, if I remember correctly, it was 2016. I was actually interviewed because I was a female portfolio manager, which I thought was very odd because, I just think of myself as a portfolio manager. But, I think the official number is that 9% of hedge fund managers are women or, portfolio managers are women, but if you exclude the ones that are ETF so essentially not active trading, right, or not active decision making of position sizing and the picking of the stocks, it's closer to two to 3%. Right. That's actually very close to the percentage of female founders that get funded. In a way, yes, I switch from very late stage companies, which are public companies, to early stage companies, but the environment hasn't changed that much for me. I think I probably got very lucky that I was raised with a bunch of cousins.

11:30
Gwen Cheni (guest)
They're all boys, so I was the only girl in probably a dozen boys. And that's just how I grew up. So it's never felt strange to me. I also played a lot of sports. I never felt out of place. I think you probably will hear this from a lot of women in the business, is they don't really think of gender. I used to play a lot of tennis, right? Tennis and volleyball and whatnot. So number one, your team is crucial. I wouldn't think of it more as men versus women. How do you fit in your team, in your particular team? The second thing is it comes down to what are your strengths and weaknesses, right? We all have them regardless of gender. I know this is not a direct answer, but I would just keep your eyes on the goal, understand where you want to get to and just go for it.

12:34
Neil Littman (host)
Yeah, and I love that way of thinking about things. The team in sports analogy, I think is one that many of us can relate to as well. Gwen, the second cultural topic that I wanted to ask about is this intersection of tech and bio which is where you have spent the majority of your career. In fact, I believe you even stayed on your LinkedIn profile, which I love, by the way, that you are bilingual on computer science programming languages and wet lab research protocols. It's just a really cool way to describe it, right? Bilingual on those two different aspects. Can you talk about the importance of being able to speak those two languages?

13:12
Gwen Cheni (guest)
I have to give credit to Daphne Kohler because I heard her say during a talk, she said when she's hiring she looks for damp scientists and what she means by that are people that have that both have wet lab. You can actually pipette, you can grow cells in a petri dish or you have animal experience, right? People that can do these type of lab work, plus they can also program you don't want to get your computer wet, that's the dry experience. So she calls them damp scientists. I heard that I was like oh, that is true. The other way I think of this is Vinod Kosla is head of Cosla Ventures and he's had a tremendous amount of influence in my way of thinking. He's always said that the most interesting discoveries happen at the nexus and you'll see this, right? It's at the intersection of things where you see the quickest next step for innovation.

14:24
Gwen Cheni (guest)
So hopefully that's where I'm aiming for. To answer your question on the cultural merging of traditional tech and biology, there's been a number of let's just look at the number of innovations that's happened the last not even ten years, I would say the last seven years that's allowed this to happen. One is definitely genomic sequencing. Sequencing, if you go back 30 years was cost a billion dollars to sequence the human genome and they didn't even tell people that oh, we only sequence the 2%, right? The other 98%, we don't really know what it does. Now we have one portfolio company called Ultima that has decreased the cost of sequencing to $100. That is tremendous. That means everyone can afford in developed countries can afford to pay to get their genome sequenced and you're sequencing your entire genome. The other thing is just the amount of compute, not just the amount of compute, the cost of Compute that has come down, but also storage.

15:25
Gwen Cheni (guest)
Right. People don't remember that back in 2014, AWS was not even a separate business segment within Amazon, which meant that the revenue of AWS was less than 10%. It did not have to be separated out. Now AWS is every startup uses AWS or Google or some of the or any other competitor. The existence of these cloud storage means that you can actually start a company without having to store your data, analyze your data. You can just use it ad hoc as is needed. I think that has also allowed the creation of startups in biology especially.

16:13
Neil Littman (host)
Yeah, and I think it's just such an exciting space. I want to dive into some more examples from your portfolio at Cosla. In general, I want to go back and talk about your transition from Wall Street to venture investing, and really specifically in terms of how differently do you need to think about value and value creation as you shifted from public markets to early stage private companies?

16:43
Gwen Cheni (guest)
Yeah. I was always into science. The story that I've been told, I was so young, I don't really remember much of it, but my parents tell me this, but my maternal grandfather, he spent his entire first retirement check buying a microscope for me. It must have been four or five. That's why I don't remember much of it. Apparently I was always staring at things and playing with leaves and bugs and whatnot. He thought that was a good present to give me. Looking back at some of my kid pictures, I was never looking at the camera. I was always looking down, analyzing something. So it's kind of funny. Kids always revert, people revert back to what their childhood hobbies were. So it's definitely proof of that. It's always into just sciences in general. I call it Stem because I like engineering as well. I think switching into venture is really going back to my original passions.

17:44
Gwen Cheni (guest)
I went to Wall Street literally just because I grew up with no money. Right. I think I needed to make sure that my family had enough for just had enough financial security, whether it's housing or food or I have a little sister who's 60 years younger than me, so I wanted to make sure that, in case she needed someone to pay for her college education, there was money. I worked 30 hours a week to put myself through school or through college, so I didn't want anyone else to have to go through that. The interesting thing is 18 years was when my little sister graduated from college. That same year both my parents retired, the financial responsibility was no longer on me. It's not that they ever asked me to take that responsibility, but as the oldest, I felt it. That's when I realized there's more to life than making rich people richer.

18:42
Gwen Cheni (guest)
Nothing wrong with it. At some point I wanted to switch over to focusing on contributing to the common good. I've always felt that contributing to the common good is the rent that we pay to live on this earth. Honestly, if everyone felt that way, we would be further there'd be a lot more positives in the world. I decided to start paying rent for living on those earth.

19:09
Neil Littman (host)
It's an amazing story, and I love the story you shared about your grandfather buying you the microscope paint. Such a vivid picture of little Gwen back in the day. Gwen a long time ago I made the transition from Wall Street and I banking, I guess, as you described, the dark side to early stage investing myself. Once upon a time, there was for me a big transition to learn how to be less reliant on purely financial metrics and building detailed financial models and all the things that you typically do on Wall Street to value a company. What I've learned over the years, when you're looking at a pre revenue company that's developing some novel science, that there's oftentimes a little more art to it. It seems like the earlier you go, the more quote unquote art there is involved in thinking about value and value creation.

20:05
Neil Littman (host)
I'm wondering if you had a similar experience, and if so, what sorts of things are you looking for in an early stage company these days?

20:12
Gwen Cheni (guest)
You're absolutely right. I've clearly drank. Vinod's the coastal ventures, koolaid every drop of it. I do think that the best early stage VCs have some a founder creator in them. What I don't put on LinkedIn is I actually almost started three companies, so I was in the process of starting my own fund. The docs are there, so I do put that on LinkedIn. There were three biology companies that was actually in the process of helping raise funding for. One of them actually got into Indie Bio, but I ended up starting the fund instead. In the process of preparing the deck, talking to the technical co founders, actually coming up with, okay, this is really cool tech. How are we going to make money? What is the business model? Who are the customers? How do we reach those customers? What other solutions are the customers using?

21:16
Gwen Cheni (guest)
If we do raise half a million, who are the three hires we absolutely need? Who are the must haves and who are the nice to have and when do we hire them? Where do we rent lab space? What's that going to cost us? What equipment do we need? Right? This is all the nitty gritty stuff that is people think being a VC is really fancy. Schmancy it's not. It's me calling ten different lab spaces trying to figure out what equipment they have, how much space, lease terms, all that stuff. It's talking to patent attorneys and trying to shrink it into 15 minutes so that I don't get charged for. If I go to 16 minutes, I get charged for another 15 minutes. It's stuff like that. The question is, why do you want to deal with basically the nitty gritty work? I think you have to be driven by passion in something to be able to go through, to be able to wade through the mud right, instead of delegating somebody else to do it.

22:19
Gwen Cheni (guest)
What drives me is something Steve Jobs said that he's famous for is he said he realized that you can poke at life, that if you poke at it, something comes out the other end. That was what I was missing on the public equity side, is I wasn't creating anything. I was definitely shuffling papers around or shuffling stock certificates around. If I wanted to create something, whether I know a solution needs to exist in the world or I know a company needs to pivot in a certain direction, I had zero control over that. I had zero influence into that. Whereas an early stage venture because if you're willing to do all the nitty gritty work, you create something, you put it into existence. So that's what drives me.

23:06
Neil Littman (host)
Yeah. And I love that. Gwen I had a similar, I think, epiphany when I was on Wall Street, where I really felt like the middleman or middle person shuffling money from one area to another without actually really creating very much. I do feel like I have much more of a sense of purpose being in the venture world and creating new businesses and all those things as well. So I can certainly relate. Let's dive into some of the investments that you're excited about at Cosla, maybe some of the companies or some of the technologies that you're particularly excited about if you want to pick out two or three. Love to learn a little more about those.

23:41
Gwen Cheni (guest)
I love our portfolio. I'd say that one of my favorite companies is actually Curai. It's C-U-R AI. Curai, in full disclosure, the founder is Vinod's son, but he actually went through YC first, so he did not get in just because he's Vinod's son, and Vinod is not on the board of that company. If there's a decision that needs to be made on Curi, vinod is not in the room. We keep a pretty strict wall there. The reason why I'm passionate about it is it's trying to replace primary care physicians. I don't want to say replaced. Right. It's really that we have a shortage of primary care in this country just between how the payers work and incentives. Right. Primary care physicians do not get paid the most, and so for the number of hours and the amount of work they actually do, they're overworked and they're underpaid.

24:45
Gwen Cheni (guest)
Part of what Puri is trying to do is, look, there are some routine decisions that are made or diagnoses that are made by primary care physicians that can actually be made by AI. You can probably tell from my background, I'm super passionate about health, sustainability and AI. You're passionate about certain areas, you try to combine them. Part of me definitely wants to combine AI and healthcare. Many of healthcare decisions can be automated. The other area I'm super passionate about in terms of physician decision making is I'm not a doctor, but I almost went to medical school, so I took the Mcat. I worked at UCSF two years, essentially to prepare me to I worked for a neurosurgeon because I was thinking about either neurosurgery or neurology. Full disclosure, I do not have an MD, but I am very interested in the area. One of the things that my doctor friends tell me is they're always taught to think when they hear hoof beats, they're taught to think of horses, not zebras, which is true, right.

25:58
Gwen Cheni (guest)
Because it's a probability thing. However, nobody thinks about what is the consequence of raw, right? I think that should be part of the decision making process, and I understand why it's not, is when doctors only have four minutes per patient, that you just don't have the mental capacity to do that, however, AI does. Right? These are I'm just giving one example where AI can be used to make physicians lives better and as well as patients.

26:28
Neil Littman (host)
That's one company sorry, one or two follow up questions about that, because I find this whole intersection really fascinating. I've heard Vidot make some public comments about the role of AI in healthcare, either complementing or potentially replacing physicians. Could you talk about what Qri was doing and if that technology is really meant to complement or augment what primary care physicians are doing? Or do you see that as a vehicle to potentially replace what they're doing?

26:58
Gwen Cheni (guest)
I think it's always going to be a compliment, right? I think there are always going to be edge cases where I think AI is a very good prompt, but there's going to be a period where the training it's exactly like autonomous driving, right? It's not just one day all cars go autonomous. There's a transition period. It's always we have a couple of companies and actually autonomous driving data, and people talk about this. I'm not the one that came up with this, but it's the last 2%. It's the 2% edge cases that take the most amount of time. So it's not the 80 20 rule. It's the 98 two rule. Right. The 98% of the data, you can gather that in maybe not 2% of the time, but maybe 10% of the time. The other 2% of the edge cases take you a lot longer. I think for the edge case data gathering, it's definitely we need physicians in the loop.

27:59
Gwen Cheni (guest)
If we look out ten years from now, I think maybe a lot of the common diagnoses can be done by an AI.

28:08
Neil Littman (host)
Yeah. I think it was Eric Topel who probably first wrote about this. The use of AI medicine, I think, in many ways, as you rightfully point out, can be a tool to aid physicians in things like diagnosis, which could actually free up a lot of their time to spend more time with the patient right. Providing that bedside manner or human element and that empathetic connection that obviously AI is not going to provide. Physicians obviously spend so much time doing other things that they're not doing probably as much of that as they could these days. I really like thinking about it that way. Okay, Glenn, let's talk about another company or two. You're excited about it at Costa?

28:47
Gwen Cheni (guest)
Yeah. This company, Synchron, I really like, partly because I did shadow a neurosurgeon for two years. It's going for human computer interface, not through the skull. There's no drilling of the skull, the dura isn't penetrated. As soon as I saw that, I was like, oh, this is going to work. I came to that conclusion because in neurosurgery, I shadowed a neurosurgeon that took out grade four Gluoblastoma. During these neurosurgeon surgeries, we always had to put in a shunt, because when you penetrate the skull and the dura, when you disturb the brain, there's a lot of inflammation and you have to put in a shunt because a lot of the liquids get flushed out. Right. The brain actually swells and you don't want to leave the shunt in there. You want to take it out within a week, maximum two weeks. So I knew this about the brain.

29:42
Gwen Cheni (guest)
As soon as I saw Synchron's approach, I knew that it had a huge advantage versus other human brain computer interface where you actually have to penetrate the skull. So, surely enough, Synchron is already in two humans. It's doing fantastically well. I think this is going to be the winning approach.

30:01
Neil Littman (host)
Gwen, is there another portfolio company or two that you'd like to talk about?

30:05
Gwen Cheni (guest)
Yeah, so a company I put into the portfolio this year in 2022 is called Rebella. To my earlier point about combining my favorite areas, it was really a combination of AI, robotics and biology, all of my favorite areas. Essentially, they're taking phenotypic drug screening to consumer products. It's now possible because phenotypic screening used to take billions of dollars in ten years in a pharma company, but now with another one of our portfolio companies, is opentrons. Now with the advent of high throughput screening and open tron is $5,000 for one of these liquid handling robots. It's reachable, I. Mean, you can buy one for your garage if you wanted to. Also the ability to use AI to screen to look at cells instead of humans looking at cells. That's dramatically taken down the cost of drug screening, or at least phenotypic screening by 40 X versus 1520 years ago.

31:09
Gwen Cheni (guest)
That's made it possible for a company to use this technology for consumer products because otherwise it's just not cost effective. Right. You got to find a billion dollar drug to warrant spending a billion dollars, but now they can spend minimal dollars and get the same level of efficacy for a compound and use it in a consumer product. Super. I think the other great thing about early stage venture is you get to work with the founders. They are extremely driven, hardworking, dedicated people. Some founders are actually really receptive to feedback as well. One of the advisors we got after we invested is actually the former head of FDA for both grass and OTT compounds, right? This guy drafted the FDA papers for how do you get a drug to market and whatnot. We really wanted him because I wanted to make sure that we actually do all the right things.

32:11
Gwen Cheni (guest)
The company has been tripling in revenue every year. It's doing fantastically and it's got a new term sheet for another round.

32:20
Neil Littman (host)
It's very cool technology. One of the questions I would ask you is in the world that you're investing in at Cosla, it's pretty common to see scientific founders running an early stage company. Many of these folks, however, may lack management experience, which may be a positive or negative thing, depending on your perspective. I'm curious, what do you look for in the management team of early stage companies? Do you look to build out their capabilities if they're lacking in certain areas? Or do you intend to bring in more seasoned management teams too, who have a professional tuite experience at some point?

33:00
Gwen Cheni (guest)
That's a really good question. I can tell you how I approach this. It may not be how everyone approaches this, and this possibly could because of my experience at Indie Bio, which is a biotech accelerator. It's very early stage first check in, they actually provide you with temporary lab space so that you can just walk incorporate your company and just start going. Or it could because I actually almost started three biotech companies as the non technical co founder, right? It could be one of these my background experiences. The way I approach this is I start talking to the postdocs, the professors, even undergrad students, I start talking to them very early. Most of the conversations I have, they have not incorporated, they have not I'm walking folks through on how do you talk to your tech transfer office, what are the terms that you really need to get and what are the terms you can give.

34:07
Gwen Cheni (guest)
There's a lot of coaching going on, I think, for maybe for Vinod or the other more senior partners. It's not worth their time, but I find it pretty rewarding to spend my time and try to coach folks through this process. There are definitely guides out there as well, but every school is different. I've actually negotiated with 40 schools, 40 universities globally on tech transfers. Actually have a slight I actually know what ranges they can expect. That's been super helpful to be able to tell professors or grad students on, this is what you can expect, this is what you need to get to get funded. The other thing I really spent a lot of time working with folks is I think I love scientists. I mean, they have such brilliant brains, right, and they come up with all these technological solutions that are just extraordinary. It's a hammer looking for a nail.

35:17
Gwen Cheni (guest)
You have to be patient enough to chat with the hammer inventors to figure out what's the best nail. That's essentially a lot of my job, right? The way I do that is I talk to a lot of corporates. I look at what's going on in the market where established companies are struggling with their solutions. That's a nail, right, where the hammer can fit.

35:43
Neil Littman (host)
Glenn, I want to pick up on a thread from your previous answer where you talked about working with tech transfer offices, walking the halls, talking with postdocs professors, even before a company has been formed. It sounds like you have quite a bit of experience in that space. You're doing a lot of company creation, it sounds like. My question is, do you see the emergence of what we now call the tech bio companies as something culturally different or unique from traditional biotech company creation? Right? Because biotech company creation has been around for a long time. I'm curious, is that what you see yourself doing or do you see yourself doing something slightly different?

36:26
Gwen Cheni (guest)
So I'll say two things. Number one is I cannot take this credit. Coastal has actually done a lot of incubation. The two most well known cases companies, impossible Foods, professor Pat Brown actually walked in with pretty much nothing, right? He had a really great idea. He was willing to give up his Howard Hughes, he was willing to give up his tenure position at Stanford to eliminate animal husbandry. Right. To Vinod and Samir's credit, they saw something in him in 30 minutes and wrote him a check. I do not have that level of confidence. It would have taken me a lot longer. This is why they're vNote and Samir, the second company is Rocket Lab. Pete, fantastic CEO, both of these folks are still at the helm. He had no traditional aeronautical engineering experience, never worked at NASA, but Sven, who is another one of our four managing directors, also saw something in Pete and actually sent Pete to live on NASA base with one of Sven's close friends just to learn it's like, oh, you're clearly interested in this area.

37:42
Gwen Cheni (guest)
Let me help you with some background. At the end of those two weeks, this NASA friend quit his job at NASA to join Pete. Right. These are just fantastic stories that I wish more people heard about, but we do a lot of incubation. I think you don't really hear about these stories because until we write about them or until I tell you about them, they stay hidden . So, to coastal's credit, we've always done a lot of incubation to answer. The second part is, as a whole, as a sector, are we seeing more of these? I think given what I said earlier about the decrease in cost both in lab space, you can get Co working lab space now, right. 20 years ago, this may not be that popular. Nobody really, shared their sequencing machines or, even now, today, a sequencing machine might be $300,000, but now with Alexandria, with Biolabs, with Indie Bio, it's common to share lab space and equipment.

38:49
Gwen Cheni (guest)
That's decreased the cost of starting a biotech company from you got to raise 25 million to starting thing to half a million. That's doable. I think the other thing that's happened is we're more flexible on what are the different milestones, the intermediate milestones before you need to bring in if you are going for Pharma, I'm just using Pharma as an example. Before you have to bring in a pharma executive team, it's no longer day one. It might be when you're in the clinic, it might be after Series A. This is a shift that didn't happen until easily, probably five years ago when I saw the real shift here.

39:37
Neil Littman (host)
Gwen, as you look across the margin technology landscape today, the types of technologies and companies that you're looking at Cosla, that are in your portfolio, that are maybe in the diligence process, what excites you the most?

39:56
Gwen Cheni (guest)
Everything. Which is why I'm always working. People are asking me, what are you doing this holiday? And I'm like nothing. I'm reading pitch decks. I'm forwarding pitch tags. Throughout the rest of my team, I'm scheduling calls. What I struggle with is time. I wish I had more energy and time to do more work. I think definitely, at least every single week, sometimes even every day, there's new technology and I'm trying to merge them. Right. We've had several in depth team meetings on LLM, so this is the huge Chat GPT, this large language model that's been taking over Twitter and the rest of the world. Clearly we have half of our team is working on that area. Me being passionate about biology and health, I'm trying to tweak it to serve the needs of health care. Right. This is definitely, if you love thinking and creating, this is an endless job.

41:05
Neil Littman (host)
Yeah, I mean, obviously it sounds like you have your hands full. I think it was Josh Wolf who said it in a tweet, the only thing that he thinks about more than portfolio allocation is time allocation. And I think it's so true. Time is scarce and it's hard to come by, as you well know. So, Gwen, I think we could probably talk for the next couple of days here, but I do want to be cognizant of your time and wrap up as you look to the future, let's say over the next five to ten years, are there certain sectors or technology trends that you're most excited about? Whether it could be the application of AI or things in REGENE med or anything along those areas over what I would call the medium term? Also, if you had a crystal ball to look out the next 50 years, are there things that you think would be really transformational that you're looking at today?

42:02
Gwen Cheni (guest)
I'll say that there are definitely societal problems that need to be solved by policy or international coordination that I am not apt to speak of. It's arguably these problems are bigger than the problems I'm trying to solve, but I'm focusing on the problems that I'm passionate about because I feel like technology can actually solve them. Those are the two passion areas of mine, which is health, global health, human health, animal health, but also planetary health. Right. Sustainability and whatnot. These are the two causes I'm super passionate about. I think about tools, which is robotics and AI are actually tools. I don't think of those as areas, I think of them as tools that can help solve those causes. That's where I'm always trying to merge these four things. I think if I had a crystal ball for the next 50 years, I think hopefully in 50 years, I do see more global coordination in carbon emissions and in sustainability, because I think we're all starting to feel climate change more than even five years ago.

43:14
Gwen Cheni (guest)
I do think that both AI and robotics will play a bigger part of our lives. Definitely in 50 years, hopefully in ten years, we have so many great companies in the portfolio that are coming to a city near you, right? We have Glideways, that is autonomous cart that can drive you anywhere. We have Wabi, which is trying to work on the 2% edge case of autonomous driving. Right. I can go on, but I'll spare you the 437 portfolio companies.

43:53
Neil Littman (host)
I love talking about all this stuff. So, Gwen, finally, if people want to get in touch with you, or learn more about cosla and your investment thesis? How can people learn more or learn more about what you're doing?

44:04
Gwen Cheni (guest)
Yeah. I'll give you a secret. All of our emails are initials. You can find all of us.

44:12
Neil Littman (host)
Be careful giving out your email.

44:14
Gwen Cheni (guest)
I'm GC at Coastal ventures.com, but our emails are also on our website. If you click on any of the investment partners, our emails are actually on there.

44:24
Neil Littman (host)
Wonderful. Are you on social media, Twitter at all?

44:30
Gwen Cheni (guest)
I do not tweet very much. I am on Twitter. I'm on LinkedIn. I don't post as much. I'm more of a reader than a poster.

44:40
Neil Littman (host)
You and me both, Gwen. You and me both. Okay, well, Gwen, I think we better leave it there. So, Gwen, I really want to thank you for your time today and a really great wide ranging discussion.

44:49
Gwen Cheni (guest)
This has been very fun. Thank you for having me.

44:54
Danny Levine (producer)
Well, Neil, what did you think?

44:56
Neil Littman (host)
I thought that was a really great and wideranging discussion with Gwen. One of the things that she mentioned a few times, but particularly at the end, was her view of things like artificial intelligence as not really being areas or different verticals. They're just simply tools. And so I really appreciate that perspective. These are all different technologies or tools that can improve some area of health care. You heard her talk about the example from the Coastal Portfolio, using AI to help complement what primary care physicians are doing, for example. It's a tool, it's a means to an end. It's not his own vertical, it's not his own area, but it's one tool in the arsenal out of a variety of different tools. I like that perspective.

45:43
Danny Levine (producer)
I'm kind of in that same camp. I'm thinking that given that she straddled both the tech and biotech world, rather than giving her insight into technology per se, do you think that gives her better insight into the culture of these companies?

46:00
Neil Littman (host)
I think so. We didn't get too into some of the cultural nuances of these companies, but I would absolutely say, as Gwen likes to say, being bilingual in both the technology and computer programming languages as well as the wet lab space. Absolutely. That's got to give her some insight into some of the cultural nuances and potentially some of the cultural difficulties that we see in some of these companies where there are people from different disciplines that often speak to different languages and how do you get them to communicate effectively in a company culture. Being, as Gwen says, bilingual in those two areas, absolutely. We will give her an advantage in how cultures are developed and probably what she's looking for in a management teams to develop those cultures.

46:43
Danny Levine (producer)
I thought a lot of her insights into her career journey were interesting, but one comment that really struck me was her contrasting what she did on Wall Street to what she's doing now and the sense of purpose she feels from being involved in the creation of meaningful technologies and companies rather than what she described as pushing papers. Did that strike a chord with you?

47:08
Neil Littman (host)
It did. You heard me respond to that, Danny, because I had a very similar experience when I was on Wall Street. The thing that I loved the most was working with management teams, learning about different business models, doing diligence, learning about the science. To me, that was the most compelling aspect of what I did on Wall Street. I did in many ways feel like a middleman. As Glenn said, we're shuffling papers back and forth without really creating anything. As I transitioned, it sounds like I had a very similar experience to Gwen, where now, as a venture investor, you're helping to create something new in the world that hasn't existed, to build new businesses, develop new technology from the ground up, and there is something very satisfying from that. I think you heard Gwen say that gave her more of a sense of purpose. I can certainly sympathize with that because I feel the exact same way.

48:03
Neil Littman (host)
I do think it is definitely a mental shift and it's really nice to hear. Gwen has found a career path where she does derive a lot of purpose from what she loves doing and an area that she really loves learning and thinking about. Obviously, she spends a ton of time thinking about this stuff and learning about these different areas. You heard her talk about passion and how important passion is and I couldn't agree more. Right? I mean, passion is often the biggest predictor of success because you want to learn more, you are curious, you want to ask questions, you want to spend extra time. I think for Gwen, I think it's really wonderful that she found that role where she can be passionate about an area of her career that she has spent so much time, but has purpose in her existing role of creating something new.

48:55
Danny Levine (producer)
You also asked her about her thinking on the management of startups, the scientific founder versus the experienced manager. What did you think of her response?

49:07
Neil Littman (host)
Yeah, I thought obviously they do a lot of incubation and company creation at Coastline, so each firm is different and has their own philosophy. It sounds like they absolutely and Glenn rolls up her sleeves and this has been done at Coastal for sounds like a long time now where they're roaming the halls of academia, talking to postdocs, talking to professors, actually helping with the technology transfer process and licensing process, really incubating the early stage companies. Obviously it has worked very well for them. Each case is unique in terms of the scientific founder versus bringing on a seasoned CEO, for example. We didn't get into too many of those nuances and timing around those decisions, but obviously they have a playbook they've been following that has worked extraordinarily well.

49:58
Danny Levine (producer)
Well, until next time.

49:59
Neil Littman (host)
All right. Thank you, Danny.

50:03
Speaker 1
Thanks for listening. The Bio Verge podcast is a product of Bio Verge, Inc. An investment platform that funds visionary entrepreneurs with the aim of transforming healthcare. Bio Verge provides access and enables everyone to invest in highly vetted healthcare startups on the cutting edge of innovation, from family offices and registered investment advisors to accredited and non accredited individuals. To learn more, go to bioverge.com. This Podcast is produced for Bio Verge by The Levine Media Group Music for this podcast is provided courtesy of Joan Levine Collect. All opinions expressed in this podcast by participants are solely their opinions do not reflect the opinion of Bioveridge, Inc. Or its affiliates. The participants opinions are based upon information they consider reliable, but neither Bio Verge or its affiliates warrant its completeness or accuracy, and it should not be relied on itself. Nothing contained in accompanying this podcast shall be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security by Bioverge, its portfolio companies, or any third party.

51:17
Speaker 1
Past performance is not indicative of future results.