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April 11, 2013
A Startup's Post-Mortem
Here's an excellent look back by venture capitalist Bruce Booth at one of the companies his firm funded. But this isn't one of those we-exited-with-a-thirtyfold-return stories. On-Q-ity, a diagnostic play, has unfortunately just folded.
There were several reasons for this, but I'd guess that the ones below really, really didn't help:
. . .By mid-2010, only six months after the Series A came together, it was clear that the DNA repair biomarkers were going to be tough, as an early trial failed to reproduce the nice Kaplan-Meyer curves of the original academic work. By late 2010/early 2011, two more larger trials read out negatively so we decided to terminate that effort. But unfortunately those trials and the biomarker lab work required to support them consumed 60%+ of the capital in the Series A round.
Not much had gone into the CTC platform in that first year and so early in 2011 the company refocused exclusively on CTCs and streamlined the team, but the clock was ticking. As we dug in to the status of the CTC platform, it was very clear that lots more work needed to be done – the paper descriptions of what it was supposed to deliver didn’t map to the platform’s actual robustness (or lack thereof) at that time. Antibodies that were supposedly functional turned out not to work, and several other things like this. . .
This looks like yet another example of something that never worked as well in the real world as it did in the publications. Bruce himself has blogged about this problem, which shows you that it's lying in wait for everyone trying to make something out of new discoveries. I recommend the whole post, especially for anyone working at a small startup or thinking about doing so. It shows you some things to stay alert for, and there are many.
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