417 Wakara Way, Suite 3510, Salt Lake City, UT 84108, USA       info@upstartvc.com  |   USA [1] 801-505-0630

© 2018 by UpStart VC

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WELCOME TO UPSTART

Investing in seed and early-stage healthcare

Founded in 2009, UpStart Ventures is headquartered in Salt Lake City, Utah. Our investment strategy represents a unique combination of idea generation, science discovery, seed stage investing, venture judgment and company management.

Our first fund, UpStart Life Sciences Capital, L.P. invests primarily in seed and early-stage healthcare companies, based on breakthrough technologies from major research universities, centered around Utah and neighboring states. 

We invest in opportunities such as medical devices, drug delivery systems, and diagnostics, as well as longer range investments in biopharma products and platforms. 

Central to our strategy is the belief that significantly more value can be created from the formation and initial management of leading edge life science companies than from traditional venture capital investing in pre-existing companies, whether at early or later stages.

 

OUR STRATEGY

What we look for

We look for highly motivated scientific co-founders who are ambitious, have integrity, understand the huge personal commitment required to translate science into business and who are willing to dedicate themselves to the task of building a commercial enterprise.

UpStart LPs are a family of investors interested in seeing the next generation of medical science appear in the hands of healthcare providers everywhere.  At UpStart we believe in playing a small part in changing the world for the better and taking our investors along with us. 

Investing in seed and early-stage healthcare

UpStart’s strategy is based on a history of successful investments by its principals, including major public and private exits. We launch and invest primarily in early-stage healthcare companies with disruptive, market-shifting technologies. Our investment strategy represents a unique combination of idea generation, science discovery, seed-stage investing, venture judgment and company management.

 

Sector Focus: Healthcare

The U.S. alone spends $2.4 trillion on healthcare annually, almost half of the world-wide spend of around $5 trillion. The number of American's 65 yrs or older will double by 2040 expanding the market and need for diagnostics, therapeutics and devices yet further. 

Life Sciences/Healthcare venture investment achieved 10.5% higher realized gross pooled mean IRR for the past decade, in contrast to 5.1% for all of venture capital, 3.0% for IT and 4.1% for Software.

Medical Devices

The USS device market is estimated to be $105 Billion in 2011, with annual growth rate of 8-10%. The USA is home to 7 out of the world’s top 10 device manufacturers..


Diagnostics

The diagnostic market has a value of $47 Billion in 2011 and is estimated to grow at 4.2% over the next 5 yrs. The aging US population is a major factor in the industry growth

BioPharma
The US pharma market had a value of $293 Billion in 2010, 42% of global sales. The market is estimated to grow to $344 Billion by 2015..

Drug Delivery

US demand for drug delivery systems will grow 10% annually through 2012. Oral types will remain the largest segment while parenteral, inhalation and implantable systems will grow the fastest.

Stage  Focus: Seed & Early-Stage

Despite an impressive array of life science technologies that have spun out from universities in the region, UpStart is alone in exclusively focusing on seed and early-stage opportunities life science investing. 

MAXIMIZE VALUE

  • Unrealized potential that requires domain expertise to uncover

  • Highly efficient deployment of capital

  • Generating value through careful incubation

  • Great science is inside every university but commercialization and global reach of that technology turns great science into great companies.

 

REDUCE RISK

  • Careful selection of promising technology

  • Cash efficiency: keep costs low and obtain non-dilutive grant financing  

  • Daily oversight through local presence

  • Creating exits proactively

An increasingly sparse field

The last 10 years have seen a marked decrease in seed and early-stage investments by the U.S. venture capital industry as established players gravitate to later-stage investments. With ever-larger funds, that no longer have the time required to actively oversee small start-up investments and require larger deal sizes to “move the needle” of return on investments. The proof-of-principle hurdle for initial investment by many funds has been raised from promising animal results to compelling human data.


Working with academic co-founders

We choose scientific co-founders with care, not only for the commercial potential of their science but also for their personal motivation to bring it to the marketplace expeditiously and advance the treatment of disease. Their ability to focus on the key research for a sustained period of time and reliably meet milestones for its development are important considerations. The Fund’s Principals have a close working relationship with the technology transfer offices at the area universities, particularly the University of Utah and Utah State University.

Optimizing efficient use of capital
Instead of transferring the licensed technology out of its academic setting at the time of company formation, UpStart supports its development in the university labs with investment and sponsored research support at least until preclinical proof-of-concept is achieved. This minimizes infrastructure expenses of facilities, equipment and employees until substantial value is added to the companies.

Drug Delivery

US demand for drug delivery systems will grow 10% annually through 2012. Oral types will remain the largest segment while parenteral, inhalation and implantable systems will grow the fastest.

Regional Focus: Utah and the Mountain West

Utah and the Mountain West have historically attracted scientific entrepreneurs, in part due to a strong healthcare research base and entrepreneurial faculty at Utah’s universities, a well-trained and cost effective technical labor force, and the highly motivated work ethic for which the State is noted, which has stimulated rapid growth of the biotech and medical devices industries in recent years.

Why Utah?

Life science technology originating at Utah universities has generated a number of industry-leading companies and substantial returns to investors. 

The Fund’s Principals co-founded four of these companies.

  • Anesta, a publicly-traded company delivering analgesic compounds, was acquired in 2000 by Cephalon for $455M

  • Myriad Genetics pioneered the genomics industry by discovering predisposing genes for breast cancer and other major diseases, and is now a public company with ~900 employees in Salt Lake City

  • Sonic Innovations is a digital hearing aid company out of BYU that developed breakthrough prescription hearing instruments and was taken public by Goldman Sachs in 2000

  • Acacia Biosciences, a gene profiling company out of the University of Utah and UC Berkeley, was merged into Rosetta Inpharmatics which in turn was acquired by Merck in 2001 for $620M

  • TheraTech, which developed novel controlled release transdermal and other drug delivery products, had a successful public offering in 1992 and was acquired by Watson Pharmaceuticals in 1999 for $350M

 

World-class academic innovation

The State of Utah has been recognized as an economic powerhouse in the United States. It is note-worthy that the University of Utah is U.S.’s largest university generator of start-ups and Brigham Young University ranks #1 in AUTM rankings for spinouts per $1M.


State-level funding and incentives

The State of Utah created the Centers of Excellence Program, which funds start-up companies to take their products to the prototype stage. Many of Utah’s well known biotech companies, including Myriad Genetics, trace their development to use of these funds. 

In 2004, the Utah Science, Technology and Research (USTAR) Initiative implemented a joint public/private sector investment of $500 million over 10 years to help fund technology clusters at the State’s two largest research institutions. 

In 2006, to stimulate financial investment in technology and life science companies, the State initiated a $100 million Fund-of-Funds to attract new and increased venture capital investment in Utah and in 2008 authorized an additional $200 million for this program. The Fund-of-Funds has committed to invest 10% of UpStart’s initial $10 million of funding and 5% of the remainder raised up to $20 million.