← Investment Climate Podcast
Investment Climate Podcast
€10M non-dilutive hack, surviving deep expert "grilling," & avoiding the CapEx trap- Georg Schaumann
00:46:58
Loading summary
Transcript74 lines
- [00:00]
A
Of course we did called out reach to many and this didn't work bad. However, the most important contact was made during a barbecue where someone was sitting next to me, highly interesting person, a professor for mathematics. And we talked about what we are doing. He was completely excited about our mission and said, you know, I have a friend working at a family office and that could be the perfect fit. And it was indeed. Okay, super. Yeah. So my name is Georg Schaumann, I'm founder and CEO of Sensab Biosciences. We are developing a platform for bio encapsulated double stranded RNA that provides effective selective and non toxic actives for crop protection. And yeah, we just closed the round of about 3 million euros. And this is our seed round, enabling us to further develop our products and and close the series a planned for mid-2027.
- [01:01]
B
Amazing. Well, congratulations on hitting this milestone. I love speaking to companies like these. Tell me, how did you guys meet your lead investor?
- [01:09]
A
That was funny somehow because of course we did called out reach to many and this didn't work bad. However, the most important contact was made during a barbecue where someone was sitting next to me, highly interesting person, a professor, mathematics and we talked about what we are doing. He was completely excited about our mission and said, you know, I have a friend working at a family office and that could be the perfect fit. And it was indeed.
- [01:43]
B
Wow. What kind of barbecue is this for
- [01:45]
A
other VCs and so on.
- [01:47]
B
What kind of barbecue was this? Was this just like a family gathering? Was university barbecue?
- [01:51]
A
It was a 100% private thing. Just friends. Yeah. And friends from France and so on. So just by accident.
- [01:59]
B
Wow. And that's kind of interesting to me because the family office is capademic or
- [02:05]
A
is a different family office that was hpg. So Heister family office, you know the Heister family is the family beyond Albrecht Aldi, the big discounter in Germany with quite some capital. Obviously they have a family office and they are interested in reasonably many aspects impacting the food chain food supply also with an impact statement beyond it.
- [02:31]
B
Okay, incredible. So. So this professor made the intro to like the GP of the of the family office or somebody in the family office.
- [02:39]
A
Someone in the family office. Then we had a first meeting. I did a pitch for two of them. They were all excited and then invited me to come over to see all of them. And this was also again a very good meeting. And we all know, yeah, it's often lot about your mission and vision and the tech, but also about personalities. Are you good with each other? And we had exactly the same mindset and vibes and so that was really, really, really good.
- [03:08]
B
Amazing. And from the time you met the team to actually kind of getting a term sheet, how long did it take?
- [03:13]
A
Term sheet? Around three months or so.
- [03:17]
B
Did they then syndicate the deal around others like Cap? The Big is the one that read led the round, is that correct? Or was it HB led the round?
- [03:25]
A
Right, because the family office usually doesn' Therefore, we needed a lead. And however, these people at hbg, they know quite a lot of people and people with, with impact and influence and they made many, many contacts and one of the first ones has been Captain Cup.
- [03:44]
B
Okay, interesting. So essentially you got a family office that says, look, we, we want to commit, but we're not going to take the whole round. We're also not going to lead the round. So what we're going to do is we're going to make introductions into our ecosystem and then see if you can bring people in to do the lead. Is that correct?
- [04:01]
A
That is precisely correct.
- [04:02]
B
So I absolutely love that. How did you. Is there something you could share about the process of how you asked for introductions from the family office? Did you have weekly meetings that were just, hey, this is your list. This is my list. How did that process actually go about with the intros?
- [04:18]
A
Somehow, as you just briefly sketched, so I didn't need to ask. So they said, hey, Georg, that's awesome. To whom did you already talk? And I said, yeah, this and this and that and these are interested. These are not so really, but these are also. And they said, okay, great, looks perfect. We would have also this, this, this and this. And then they made contacts and these contacts. Of course, these have been warm intros and that helped a lot. So I always felt I was initially talking to people who already were quite positive about our mission and about me. And specifically with capnamic, this family office is already in some other investments with capnamek, so you can imagine that builds a lot of trust. And also with capnamiq, that of course has not been true for every other vc, obviously, but with capnamic then it felt similar. The very first contact was like, yes, that's it, personal fit, mission fit. And I think this is overall my learning from this fundraising. Don't waste your time for connections that from the first second on feel somehow a bit difficult or not that excited or. So focus on the ones where you really feel that is a fit.
- [05:37]
B
Yeah. Is capnamic, what is the thesis of the fund and does it have a lot of portfolio Companies in agri food tech, they don't.
- [05:44]
A
So Capnomic is more known for it AI investments. But they did a new fund with the idea to be a bit more open or what means a bit more to be quite open to other industries and opportunities.
- [06:00]
B
So this was their first agri food tech investment. All right. So I actually love that because that means there's new money that's flowing into. Into the ecosystem, which is great. How did you go about convincing them that agri food tech could get great returns? Because I think that is one of the things we haven't seen a lot exits, right? Actually on agricultural side we have a little bit more. But you know, what did you say? Hey, no, I think there's a path for you guys to do really well with this investment. Right? Because if somebody hasn't really touched agri food tech, they're not really familiar with the sales cycles of agri food tech. They're not familiar with like the exit multiples who's buying the company. Like, how did you get them comfortable with making a bet like this?
- [06:36]
A
I think it was not so much about telling them agtech is great. It was very much about our disruptive innovation is a big thing. It is an egg, of course. But I think what convinced them was really a quite disruptive technology in combination with huge markets. They are fully aware. And so I'm being a scientist by training, I'm also very much honest on that front, saying, hey, it's risky, it's about deep tech, it's about ag. It's always complex and risky. But again, we made a really disruptive innovation and the markets for fungicides and so on, we all know that here are so big that there is a great opportunity.
- [07:19]
B
So George, how did you so absolutely love that? And I think the market is, let's say the market is a pretty simple thing to prove, right? That's a pretty easy one. And the problems with fungicides are pretty well known, right? It's like. That's right. But how did you get comfortable around the tech where they're not tech people, right? Was it just, hey, we just believe you as a scientist, we could trust you, therefore, or did they do some sort of due diligence of the tech themselves through outside the experiment?
- [07:46]
A
Absolutely. So all of them, they are really smart people. I was, I was excited to see how much they got from just my pitch. And they asked exactly the right things. But at a certain point they said, okay, Gjark sounds perfect. But you know, we didn't study that ever let's book a two, three hour session with a real expert. We pay for that. And Capnamic and also HBG both confronted me with a really deep expert in that area. In German you sometimes say they grilled me. So that was really tough. Very friendly, very good by they asked all the hard stuff only a real expert can ask. These have been people that have worked for, for example BASF or Bayer for 30 years. They knew everything and they touched exactly the points in which I told, yeah, we have something new and this is working perfectly. They said, okay, show me why. And after those calls, it has not only been two calls, in the end we had, don't know, four or five of them. And after those calls these experts gave a big thumbs up to our VCs. And that was for them the proof. Okay. Leorg doesn't only tell great things. Somehow it's technically feasible and believable.
- [09:04]
B
Yeah. Is there a path that you think you why you did well with these outside experts that other founders can learn from? Because they grow. And also these VCs, they paid money to these experts. They probably paid like 250 hundred, 400 Euro an hour. Right. So they put in 2000, 2,500 Euro into the conversation. Right. So they invested into it. So what did you have ready? Was it scientific papers or was it some sort of proprietary IP already that's already booked trade secret. Was it your university research that you brought to the table? Like what? What do you think you did well to convince them that you know, this is legitimate path forward?
- [09:47]
A
It's not scientific papers, it is about. You must be able to explain your innovation to another scientist in a, how to say, in a pragmatic, in a fluent, in a somehow business kind of style way. So I think for a non scientist that is not possible. For someone who is only a scientist, it would be difficult because he would spend hours talking about standard abbreviations and that's not the thing. So you must be able to put all your science in a nutshell and present it in a scientific way. And if there are questions, you must go into every single detail and have a solid explanation. And this is something I would not have been able to do. Don't know. Two years ago I went through a steep learning curve there. When I pitched our innovation to different people, also to partners. All the big agtech players know us. I went to all of them, we worked with them. And so I was often asked to do exactly that kind of scientific, but not too scientific presentation. And I think this was the key okay, great.
- [11:02]
B
Are you also the CTO and the CEO, or are you the CEO and you have a CTO and the team?
- [11:07]
A
Yeah, that's a good question. So for now, I'm the CEO and somehow also the cto, I'm the single founder. But this will change soon. So we will get a commercial co CEO in June this year. And then I will be even more focused on the product development, partnerships, technology side and some commercial aspects will of course then be on his side.
- [11:30]
B
Okay, understood. Was that a thing that people were worried about? Because a single single founder stories are tough. You know, also, it's very rare to have a scientist who could also be a commercial lead. Like it's very. And vice versa. Right? It's. It's, you know. So how did you handle the objection? Just say, look, I know that I need a big. I need a co founder. You know, we're gonna find that person. You know, that's part of the reason why we're raising this money. And I know that my future isn't leading the science team, not the commercial team. How did you deal with that?
- [11:59]
A
That was honestly, I think the biggest challenge and the biggest problem during fundraising because I was used to play this double role and I could do it because I have an awesome team here. We have here five postdocs who are really awesome in what they are doing and they do it more or less alone. We talk strategically, but all the rest they are doing. And so I had resources to go talking to partners doing fundraising and so on. So this enabled me to be this kind of CEO, CTO, CSO in one person. But as you just said, VCs don't like that. And I had to learn that the hard way. I had conversations, hearing, okay, Georg, that all sounds perfect, but you are a single founder. We don't see how that should work. And one VC specifically said no because of that. Later on, when we were close to closing the rounds, they say, georg, you know, if something goes really wrong, we are here. And maybe they are even there for the future. But this was the reason to say no. Initially. I learned that this can't stay that way. And we agreed between all the VCs joining the round that we will find a co founder. Late co founder is a term.
- [13:13]
B
How does finding a late co founder is a really interesting challenge because you need to give equity and you need to have also salary. Typically. Any tips for how you're going about finding a co founder at a later stage? And in your mind, you have already a number of how much dilution you're willing to take for a co founder and also you setting up basically guideposts of look, it's going to be a four year vest, right? Or a six year vest to incentivize him to stay. Anything you want to share about how you're thinking about it? Because look, you just raised money, you know you're going to go out there, not look at commercial founder. How does that process look? What's going to actually have to happen for you to find that person?
- [13:53]
A
So the first advice is and that's what our VCs brought in. I didn't know that we planned with that co founder already when closing the seed round. So there is a reserved portion of shares that for now of course spread to everybody, to all the shareholders, but it is already in each and every Excel sheet with a cap table and waterfalls and so on. There is this reserved portion for the late co founder and everybody already agreed that this percentage of shares will belong to the late co founder. I think that is super important to not start discussions about is it too much, not enough and so on later on. Then you also must have in mind tax things. This is very technical then. But in Germany for example there is a specific law, this is relatively new, I think 2 years old or so that as a natural person you can buy shares as a late co founder at nominal price and it will be taxed only when you do an exit. This is super important obviously. Otherwise we all know that bringing shares to other people is from a tax perspective a nightmare. So meaning pay well for that if you have in mind that you will do that later on. And there are even more technical terms, reserved capital and so on. So however we must not go into detail here. But this is really important. Then next advice is don't rush it. So we closed our seed round in April last year and then did this seat extension in November. However, we started in April to look for a late co founder and finally we now have an agreement with the late co founder that is signed in January this year and he will start in June. So tells you how long it took us. And I talked to many people initially to many people who already found a co founder. I wanted to hear from them. How did you do it? How does it feel today? And only afterwards I talked to people who eventually could be this late co founder and funnily I didn't need to talk too many because it was not an outreach from my side. The now late co founder called me and said hey, what do you think? Again it's Amazing. Reminds me on how we found our found hpg. Yeah. So it is about connecting to people, telling them what you are doing, what you are playing, planning to do and then somehow things will come to to you.
- [16:28]
B
Yeah. Yeah. Well if what you're doing is articulated clearly and shows value to the market. Right. So which you clearly can do very well. A few questions that around the. I'm just gonna run through some questions that come to me from a like objection standpoint just how you handle them because I'm really curious how you think about this issue. So first of all, you know the type the timeline to market is extremely long with fungicides. Right. It's. It's a very long process. Right. Regulatory that you're talking about. It's almost like a pharma approach. Right. So how does that look for a startup that's raising funds? What kind of milestones are you raising and how far are you away from the market with the product that you're currently trying to develop? I speak with founders raising every day and they're all telling me the same thing. It's harder than ever to find investors who are actually deploying. And getting access to those leads takes time founders just don't have. Every month fundraising is a month burning Runway. This is why we created ftw, a community of founders actually fundraising the world's most accurate agri food tech investor database. Plus connecting you directly to ideal target investors and a community of support and accountability. Guaranteed results or your money back. Apply today at www.joinftw.com.
- [17:53]
A
So completely agree. It takes ages and that means automatically when you are an early startup it always takes ages. So for me that automatically means it's not about discussing is it one year less or more or even two years less or more. It's about your strategy to handle that and also because of other aspects. You already mentioned the current VC and exit situation. Right on. I think it it's not viable to say hey we will be super fast and find enough capital to bring our own product to the market in eu, US and Brazil doesn't work. So for us that means we are thinking in partnerships only. Our business model is partnerships only with the BASFs and Bayas and Cortivas, Syngenta, UPL, Certis and so on. So there are of course we know not too many players but enough and many reasons currently are really make it clear that. Startups must think in partnerships with those players. And then even the question time to market is a little bit different because when so it means a milestone is to close an agreement with one of those players saying it's a joint development agreement and then you should be already paid before your product hits the market. And the question when and where the product is initially commercially available? This question will be mainly answered by your partner. I think this is the way to go forward.
- [19:34]
B
Yeah. So I've worked to advise a few different players in the space. So what I find is first of all, you realize there's not a lot of global players that are you talking about, say max 10 potential buyers because you're probably going to be acquired, right? You're going to be acquired eventually by one of these players. You know, for those people who want to like know more about this market, is it typically that you have to do exclusivity with one of these players? They have 10. You start with partnerships and then one of them is going to raise their hand. They say like, look, we're ready to engage at an exclusive basis. If you hit these milestones in your trials, then we'll just buy you. Is that how it works?
- [20:08]
A
I wouldn't, I don't expect that someone says if you hit that milestone, we buy you. I think this M and A thing is a more. More not spontaneous is not the right word. But I think this comes later. So for example, if you do three product with the company, three different products eventually and they see oh, there could be 10 more, maybe it's wise to buy that startup. But before it is very much about individual products. And so let's say a big company is interested in a new active against ethics or against Botrytis or Downey Mildew, whatever. So if you can show them a convincing data, you may start to discuss a joint development agreement for that specific product and application. And reasonably, if the global player puts effort and money into it, they reasonably ask for exclusivity. That's clear. But you can easily give that for one specific product and application if you have a platform. So this must all come to together. If we would have one single product only, it would be difficult. But honestly our platform is right now even too broad. We know that we must quickly identify the, let's say 10, 12 most promising products and then focus on them and then do exclusive partnerships for different products
- [21:29]
B
with different players and in your ecosystem, is it traditional that a large corporate would start doing joint development agreements where they fund R and D for the startup? Is that typical?
- [21:40]
A
I wouldn't call it typical. So we did, we managed to do our first commercial agreement in which this global player pays us for doing the RD and we even included commercial terms for later on, royalty rates, floor payments, all of, all of that. But this is. This for me was one of the biggest milestones we achieved last year. End of last year this was really not easy. And however, for this year my aims are to close one or two more of those. And when I say this isn't typical, it's not at all. So you have other startups doing great that achieve that. However, it's not that you say, you know, we do the usual program JDA with this and that. No. So that's quite individual in every case. Initially most of the players are quite reluctant because now I know them very well and they told me, Georg, you can't imagine how many approaches we get. So every second day there's a another guy saying I found the silver bullet for your next active. And so it's really hard to identify the ones who are really interesting to us.
- [22:53]
B
What can we learn about the way that you did get that deal? Obviously you can't disclose who that actech company is, but how did you cultivate a champion in the company? Did it go through the open innovation arm? Was it also warm intro? Was it a C suite from an investor to a corporate? How did you get into that discussion in the first place?
- [23:11]
A
I would say 99% network people knowing people working there, reaching out to them, asking them to forward that internally, to make warm intros internally. Be aware that it takes a lot of time. So you could imagine at least a year of a pitch here, a pitch there, a new contact there. Even these companies are so big that sometimes you know two people but they don't know each other. And even those departments surprisingly don't know too much about the other one. Yeah, yeah, I heard there is this department of. But I. Yeah, so you must really connect the dots there and have time. And then for example, in that case, initially of course it's my role to go out to them to pitch there. But at a certain point we went over to that partner with I think six people from our team and met around 12, 13 people from their side and then it was not so much about me. Our postdocs have been the one discussing in depth with the industry player scientists and those then were excited that yes, this is solid, they really checked this, they checked that, they thought about that. So then I was not that important anymore.
- [24:29]
B
Yeah, so that's fascinating. And were you worried at all that how did you protect your technological advantage? Right. Because it sounds like you have a pretty deep technological conversations. How do you as A startup, let's again say it's a basf, right, Whatever, they're massive. They could squash you like the bug if they wanted to. They could just squash you. Right. And say, oh, that's a digital approach they're taking. We could just do it in the house. How did you protect your advantage as a startup?
- [24:52]
A
Yeah, so previously I was more concerned about that topic than today. The point is, of course you are, you will sign NDAs and so on all day. So this is important also to protect yourself in your role. Yeah, but this we all know NDAs are somehow just paper.
- [25:08]
B
They're money for lawyers.
- [25:09]
A
The other thing is, I think it wouldn't be that easy for those players to simply copy what a startup is doing. They would be slower than we are simply because of internal procedures. Then I think even a young startup already acquired a lot of experience, specific know how and so on. So simply to copy all of that is not as easy as we initially may think. Plus it's even not their strategy. So for them, them it's way smarter to say hey, let's do the startup, all that work and if it really works out in the end we can buy them. We have the money, if it really works, but we don't really anymore have the money to try 10 different things internally. So therefore why should they copy us and do all the hard work? They could also just out, out outsource to us. That's my perspective.
- [26:07]
B
Yeah, I love. If anybody has a chance, they should look at Mark Zuckerberg. Talked to park about startup versus corporate. Like why, why did Facebook succeed where there were others who were bigger than that but that time, right. They could have theoretically just copied and taken. So I think you point exactly to the, to these, to these things which is first of all you have speed on your side, which they don't. And two is you have initiative which they don't. It's like you're incentivized so much more than them to go faster and succeed that the corporate, which is already dozens of projects at the same time, who's going to own this? The point where they say hey, I'm actually going to take, take this on and run with it and own it and put there so we actually as startups, I feel like there's often this fear of somebody bigger that's going to take us out. But really they have bigger problems with us also. Right. They have a lot of things to worry about. I'd rather write a check to us often and say hey, how about you just do Some RD for us. And you're cheaper because our site is a more, you know, we pay our sizes much more than what you pay yours. Right. And you're much faster than us. Like it's cheaper for us just to give you the cash and do exclusivity that us developers in house like okay, whatever it's this is and we as startups are afraid of. Actually if you're good at what you do, you know, a corporate will actually want you to take the lead on it. Just write your check. The problem is after we're not good enough.
- [27:27]
A
Yeah, so that's, that's precisely the situation. There are of course some exemptions, but only in parts of our work. So for example, I often get marketing emails from service providers saying hey, you need this and that DNA synthesis or a strain construction service, we could do it for you for cheap. Usually I would love it because it would give us the opportunity to focus on other things. As a startup you always need more people than you have. Right. So it is smart to outsource things. But there I'm careful because we have our own bioinformatics here giving us incredibly effective sequences. Do I really want to give that sequence to another maybe even smaller party doing kind of plasmid constructions or so I guess in 95% of cases it would be safe and good. But I'm not really sure if in 5% there is someone thinking hey, this is very valuable knowledge, maybe I can use it on my own, sell it to others, whatever. So there I'm way more careful than in any discussions with the big players.
- [28:44]
B
So the rule is startups should worry about dealing with other startups or small companies.
- [28:48]
A
So if it right, so if it is with true so doesn't mean I'm skeptic towards other startups. Usually you only join forces when there is very much complementarity. But if someone is in the same field of technology but provides a different step of the development chain there I'm most careful.
- [29:08]
B
Okay. Yeah, yeah, it totally makes sense. I found that in my experience as well that especially working with CDMOs when you're doing, when they're developing your scale up and they get to learn your whole process, be very careful about that process because God knows once that genie is out of the bottle, you gotta be very careful eventually.
- [29:32]
A
Yeah.
- [29:33]
B
Amazing. Now again you've raised just now like 3 million. There's a seed you're probably pre seed, you've probably raised like 1.2. My gosh. Like by America's standards, that's Nobody at all. Right. That's very little cash. Right. And it sounds like you got really far in the science. So is it because you developed a lot of the science already at the university and you had to take it out of the university. Did you get a lot of public funding or you just were able to be just much more nimble? Because when I think about he raised. Maybe he raised 4.2, maybe he raised 4.5 altogether. That's like nothing. Especially when you're doing the type of work that you're doing. Did you have like field trials already happening? How did you do field trials? How did that happen? So how did you get the milestones that you got so far with raising so low cash?
- [30:17]
A
Yeah, so there are two answers to it. One is very simple. We got grants and the German government was really awesome in that aspect. So we got around 10 million over the years.
- [30:29]
B
Okay.
- [30:29]
A
Which explains a lot. Right. So not yet really 10, but close, close to. And this was always shaped in really good programs with including some consultancy and lectures and so on. That in the first years really helped us. So today I don't need that anymore. But. But in the first years it was really, really good. Second aspect is still today, yeah, we don't have too much money, but I think this is an aspect that is from which we benefit. Because in these days, when the big multinational corporations are not that hungry, at which the VC side is getting problems even because of that, if you need a lot of money, you have a problem. Right now it's difficult to close big rounds. But if you stay lean, you simply don't need so much. And you will always find a series A in Vesta giving you down notes between one and four or so. That will always work. So meaning the answer is stay lean. And we did that. We don't build our own manufacturing capacities because we don't need to. So our process can be done by any CMO in the world who is able to do aerobic fermentation, which is nearly everybody. We also don't need a regulatory, distribution and marketing team because we are doing that in partnership with the big players. I think staying lean is generally an advice I would give to others because it helped us a lot.
- [32:07]
B
Okay. So I love that. I really do respect that. Tremendous about staying lean. What I'm curious about is, you know, I understand with a software play, right, you know, you can. The joke is you could build a building billion dollar company with one employee. Now that's kind of the thought processes you could get there with software, but you're doing hard sciences, right? Isn't this something you have to throw bodies at? Like, isn't this high and really expensive equipment really strong? Like multi objects or analytics, bioinformatics? Like these are really expensive things, right? More headcount, more scientists, more equipment. Like how do you get there with so little cash? And even you measured 10 million. But I believe the company was started like six years ago, is that correct? Correct.
- [32:48]
A
Yeah, roughly, yeah.
- [32:49]
B
Right. And will you come out of the academia with it? You have to get the IP from academia. Or this was your own. This was your own.
- [32:56]
A
Yeah, the IP originally, the very first things came from academia, but I think, yeah, today we canceled all the patents that we did back then in academia. So which are somehow still owned, would have been owned by the university and so on. So all the IP we, we built our platform on now is fully owned by us, which makes it already a bit easier. But also IP can be incredibly expensive. So also there the thing is, stay lean. And stay lean doesn't mean don't protect your stuff. It means monitor it carefully. So I know many people who think, okay, we filed a patent and we will own that for the next 20 years. No, you shouldn't, you should file it. Because often you don't know from the first, first, second on if this invention will be for all the time later on or if eventually after the next two years, you see, oh, we don't really need that anymore. It is still great science, but it doesn't protect our product, it is easy to go around it or whatever. So therefore monitor your IP carefully and you can well say even before something is published. Guys, honestly, we have four patents here. We really now need only two of those. The other ones are nice but not really crucial. So. So cancel them. And even if you got a patent, think about, do I still need it or not? So this saves you a lot of money on the IP side and later on. So if it is about VCs and later on an exit anyway, there will be people going into detail how valid and how valuable that IP is. So even there you will not benefit from having 10 more patents. So it's about do they protect what I do? And we could go over to machinery. True, what we have in our labs down there, when you would buy it new today, I don't know, you could easily spend 4 million or so. But we bought it used. Most of the stuff we bought used. And it's incredible how much money you can save. You can buy machinery that is two years old and more or less Unused or slightly used for a tenth of the price that you would pay new. So these are all the different steps and then coming to personal cost. Yes. So our, the highest portion of our cost are of costs salaries to the people. And there you must select wisely people who are really enthusiastic and super experienced and willing to work maybe even for a salary that is not the greatest.
- [35:28]
B
And did the government though create incentives for them to cover some of their salary for R and D as well?
- [35:33]
A
Yes. So these grants usually cover salaries. They cover even machinery. They cover ip. I think these are the main three things. Yeah, they don't cover any legal costs or marketing or whatever but IP machinery and salaries, that's what they support.
- [35:50]
B
Yeah. That's amazing. And I think this is really crucial for our listeners to understand. You know the company Jorge has this, you know is about 67 years old. Right. And then how does a company last that long with his pre revenue. Well you do the math pretty quick. Right. Guess he has a family as well. At least he has a partner, I'm guessing children and I don't know but, but, but he has responsibilities, right. He probably has a mortgage. So you ain't living at that much at a one and a half million dollars for six years. It has to be some other form of cash coming in.
- [36:20]
A
Yeah, so we, we did projects in the past. Who has been more in the industrial biotech environment. Honestly, I totally forgot about that here. We, you know we, we are biotechnologists. Our focus is 100% the SRNA encapsulation and ECTEC. However, with our know how, how you can select more or less the same basic strains and evolve them towards producing chemical precursors for biopolymers or so so
- [36:49]
B
you just revenue rnz. So that was that to, to fund the company. It took some salty projects to develop projects as well.
- [36:56]
A
But this is something that was very special, a special opportunity for us. I would not recommend that to anybody because it is a strong defocus so you can't explain it to any vc. So, so this is from our past. For us it was okay, it was good. But there is no advice. Don't do that. That was very special.
- [37:18]
B
Yeah, this has been a really amazing conversation. I think our, you know, our listeners are going to learn a tremendous bit from you. Anything that is important that you want to share with our listeners. You know, of what you work in the next six to 12 months. If they, if they want to help or they hear hey, you know this is kind of what I need from you because, because you've shared so much with us. What are you guys focusing in the next six to 12 months and how could our listeners help?
- [37:44]
A
So we focus on execution. So last year it was kind of laying the foundation, seed round, we built the team and so on. This year it's about execution. Greenhouse trials, field trials to really evaluate efficacy. And we need those results to convince more partners to sign JDA's and so on. If you are a CRO offering greenhouse of field trials or even laboratory screens for different crop protection applications, nematodes, viruses, insects, fungi, please give me a note via LinkedIn or so. Because we very much depend on the CROs here. And there are different CROs with different specialties and I'm excited to learn who
- [38:35]
B
could offer what amazing. And then that is geographically. Do you have already a product you could test in the field trial or
- [38:42]
A
not yet we have, however that's already planned. We have many other products at greenhouse level. For now, initially, greenhouse is more important or even lab because if you do it the smart way, you start even with in vitro trial to see which product seems to work best, then maybe you start with 20 different ones, you focus down to five, you go with five to the greenhouse and with two to the field. So even these very early, more lab kind of trials are very important.
- [39:12]
B
And for our listeners, just so you can educate them, how do typically the commercials of that work? Are you expecting to pay the CRO or CROs pay you or you guys basically do, they're testing your product, if they're having success, that they decide, okay, we're going to distribute your product. How do you typically work at the commercials at that stage?
- [39:30]
A
That's very simple. We pay the CRO, so we just have a prototype, we pay the CRO for doing a trial. We own the results and everything of course. So it's a kind of fee for service relationship. Of course we have many different products, so I think for the CROs it's interesting. We may come back often.
- [39:49]
B
Great. Thank you so much for this conversation. I know we learned a ton from you.
- [39:52]
A
Great. Thanks to you.
- [39:54]
B
One more thing, don't close this episode yet. If you got value from this conversation, here's what I need from you. A five star rating. One comment, 20 seconds of your time. That's the deal. A five star rating means more founders find this content. And every time a founder raises, all boats are are elevated. Every week I pick one random comment and send that person a complimentary copy of Investment climate the book. 50 sales playbooks from founders who actually raise money during the fundraising winter. Real strategies, real closes, real numbers, not theory. So if you want a copy, comment below. And if you haven't followed the show yet, do that too. And if there's a guest you want us to bring on the show, just drop us a note. Note. Or send us an email. We'll read each and every one. Until then, keep on raising.