When the problem is YOU, what do you do with your start-up?
It has been suggested to me, repeatedly, that if I were only “more positive”, that somehow, magically, my startup 32ATPs could raise funding. However, I am hoping that the below analysis of my experience, as I reflect back on the past few years, from a place of debt, depression, and despair, will convince you otherwise.
Apparently, because I am not 100% “positive” all the time, the universe is preventing my startup from raising funds. I have discovered that magical thinking is frequently applied to female-founded startups. Undoubtedly, there will be comments on this piece, “well, it’s her fault for wasting the time to complain. Shouldn’t she be out asking for funding RIGHT NOW instead of wasting time complaining?!”
Why am I crippled with debt, and in the depths of despair? Why did I recently have to choose between paying my attorney and fixing the timing belt on my 13 year-old Honda Civic? How is that that a technology that holds so much promise, that I have scrimped, saved, sacrificed, and practically given my fist born child for, languishing in the valley of death?
Here is the 32ATPs story to date. Perhaps, one of the rarest stories of them all. This is the story of a female-founded biotech (CEO and Founder), with a female CTO, clean energy, hardware, independently started (not a laboratory spin-out) funded startup. This start up is not a fertility app. It is not a “luxury” brand. It does not solve a “female” problem in the market, or court the female dollar.
As my new boss said to me “don’t feel too bad. You tried to do the impossible.”
In 2014, my partner, Dr. Shelley Minteer and I launched a crowdfunding campaign on Experiment, so that we could protect the intellectual property around our technology idea and apply for government grant funding.
I was so naïve, back then in 2014. Even though I had read all of the data about funding for female founded startups and sexism in science, I truly thought that this was a new era, that if ANYONE could get it done it would be me, and that we would eventually secure funding for our great (!) idea; to create a “biological” supercapacitor with glucose, biological enzymes and water — a greener, cheaper alternative to batteries.
We applied for SBIR funding, because we were proposing a “proof-of-concept” set of experiments around an idea that was practically guaranteed to work. How did we know it was going to work? We had 20 years of academic literature to back-up our idea. The SBIR funding mechanism provides grants in phases: Phase I is a proof-of-concept / feasibility grant (6–12 months, $225k), which can potentially be followed by a longer development grant, Phase II (2 years, $750k).
The Phase I solicitation instructions establish that one must “Present evidence that the proposed technology is innovative, that development of it entails high technical risk, and that you have a credible plan to establish technical feasibility during Phase I.” Or taken from the SBIR website “The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts.”
We crafted a proposal to do just that: prove that a “biological” supercapacitor could work, that is was technically feasible, and that it could compete with other technologies currently in the energy storage market- supercapacitors, batteries, and fuel cells.
However, we were summarily denied funding on the grounds of, and these are just two quotes taken from our ACTUAL reviews:
“The proposal did not include any preliminary data to demonstrate the feasibility of their conceptual technology.”
“Unfortunately there is no data to suggest that the authors have hit upon a transformational discovery. The proposal seems highly speculative.”
This is true, because “PHASE I” funding is to perform proof of concept and feasibility experiments, but the basis for how we KNEW it would work was provided in the references, based on 20+years of enzymatic fuel cell and battery data.
We know the proposal itself was good. One reviewer even went so far as to note “NO WEAKNESSES” in our proposal.
Taken from our reviews-
Strengths: If a biodegradable supercapacitor can be developed, it will be of strong interest to E-waste management.
We were forced to move our project into my partner’s academic lab at the University of Utah, to collect “proof-of-concept” data for a grant that is supposedly to fund proof of concept work. In the end, my partner used discretionary funds and graduate student labor to perform a single proof-of-concept experiment. We re-applied for the same Phase I SBIR and waited… only to be summarily denied funding AGAIN. This time a smattering of reviewers comments reveal that they would actually have us perform every experiment that we, ourselves, suggested in the proposal.
“Its difficult to envision an impact of this technology without a baseline of its potential based on performance and some consideration of the competitive advantage in the market.”
(Even though, our single, un-optimized proof-of-concept experiment showed that we were 18x better than standard, market grade mesoporous carbon. This was submitted with the grant re-submission.)
“The proposal suggests that this work will achieve a higher energy density, but only increased Faradaic storage is reported. Charge storage and energy density are much different, and this must be qualified.”
“The assembly and manufacturing costs are not discussed, as well the final weight and electrical characteristics of the biologic supercapacitor, as compare to the already on the market devices.”
“Also, there are no half-cell reactions which would greatly elucidate the mechanism and overall operation of the device.”
“The proposal should have provided the charge storage mechanisms for the half-cell reactions occurring at both the anode and cathode and their respective redox potentials so that a better assessment of the operating mechanism(s)and merit of the device could be evaluated.” (of course, this was provided in the references.)
Again, Dr. Minteer and I went back to the drawing board. The above critiques sound an awful lot like Phase II (continued research and development funding). Dr. Minteer allocated yet another small pot of discretionary funds and a graduate student’s time to perform all of the experiments being asked of us. We recently published this work in the American Chemical Society’s Energy Letters journal.
Because of this decision, the University of Utah will now jointly own the IP developed during that time. Unfortunately, this decision, while necessary, has muddied our business plan (new IP has been jointly filed with the University of Utah), and has planted seeds of doubt in the minds of potential investors.
Meanwhile, 32ATPs as a company was still making small advances. My partner and I split the company physically, and I (the CEO), moved to San Diego, California from Utah. In San Diego, there is biotech and clean energy investment support as well as supportive infrastructure for start-ups. There are no mechanisms to support the “entrepreneur” in Utah (only the academic), and biotech investment didn’t even make a blip on the chart.
Furthermore, even if we DID get funding, there was only one biotech incubator (at the time) in Utah that we would have been able to afford a small bench space in, i.e. the state supported BioInnovation Gateway. This is, if we could get into it, because it was full.
After I moved to San Diego, 32ATPs was quickly accepted into the SpringBoard CONNECT program (a “mentorship” accelerator) on the early-stage “innovation” track. This program helped me to (over a 6 month period) shape up a “pitch deck” and meet several potential strategic partners. However, my mentors there have continually advised me to not seek outside funding, to wait until I get a grant.
They have wondered aloud “Isn’t it easier for women to get grants?”
Uhhhhhhhhhhhh, no. It is harder. Much harder. We have been denied by DARPA, BreakOut Labs, the federal government and everyone in between. In fact, the data shows that women owned organizations only won 10 million dollars out of 118 million total dollars in SBIR funding in 2015.
“I know someone who raised over 6 million in grant funding, why can’t you?”
Gee, I would LOVE to know the answer to that question. As I sit here, writing this, waiting to hear back from my third SBIR submission, which probably now has SO much data that it will no longer have the “high technical risk” that the SBIR committee is looking for.
Meanwhile, 32ATPs has applied to and been rejected from every single accelerator within reach, such as: Y Combinator, Women Who Tech, Singularity University, Tech Founders, Make in LA… etc etc etc.
I have had countless investor meetings. We have yet to raise a single dollar of support. I’ve been forced to go back to “work” (isn’t that crazy..? to call it work, as if what I have been doing the past two years isn’t), diverting my focus from 32ATPs, but allowing me to get stable again, having benefits… health insurance… being able to go to a dentist, for example. Not only for benefits, but to regain some confidence in my own abilities. Frankly, its nice to be be able to make recognizable achievements and progress in a job again. I hear “no” all day every day. I’ve realized that the problem is not the technology but, rather it’s ME. My self-esteem has taken an enormous hit. You have to believe in your idea more than anybody ever will. More than that, you have to believe in yourself more than anyone.
At one point, I wrote the following sentence:
“And that will help you grow a thick, fleshy mantle that will protect your shoulders and spine from sickling under the weight of entrepreneurship. Just remember, you are a buffalo. Stubborn. Raging. Steaming from the nostrils and stampeding down the NOs.”
Sounds like I was confident, huh?
Currently, the technical merit of our work has been recognized by the Utah Technology Council and Stoel Rives (Utah Innovation Awards, 2016), we have one academic publication, and two patent applications. Additionally, I have been individually awarded San Diego Metro Magazine’s 40 Under 40 (September, 15, 2016), as well as being selected by the Utah Women Tech Council as a finalist for the 9th Annual Women Tech Awards (September 22, 2016). But none of that matters. None of that is real support.
It is … at best.. lip service, so someone somewhere can claim that “they support female entrepreneurs.”
We are at a crucial pivot point.
We MUST raise a pre-seed fund to continue. There is nothing else we can do for free or on the cheap. Around July of 2017, I will need to defend patent #1 against the USPTO. That requires hundreds of hours of attorney time. SBIR can only fund a tiny fraction of what is needed, so simply raising grant funds is not the answer (if it’s even possible?).
Every meeting I leave empty-handed and with the empty promise of “get back to us when you have a revenue stream” or, “I would love to, but I don’t want to be first in” makes me realize that no matter what I say, no matter how I say it, and no matter how good the data are (and right now, the data are STELLAR), the problem really is with the person saying it. Me.
Because, if I were a guy, I could walk into a room, with an idea for the next “app”, brag about how I would spend half of that on executive salaries (because if I were a guy, no one would expect me to not pay myself like they do now), and walk out with a check for half a million dollars.
So when the problem is YOU, what do you do with your start-up?