Episode 24: Silicon Valley Bank and Working with Biotech in the Gulf South, featuring Key Opinion Leader Pooja Majmudar

You're listening to Bio from the Bayou, featuring stories and industry insights from experts in the bustling biotech scene of New Orleans.

The entire Gulf Coast region is buzzing with excitement, and we're here to bring you frontline access to this vibrant ecosystem direct from NOLA, the city that provides a little lagniappe with everything we do.

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I'm James Zanewicz, the Chief Business Officer for the Tulane School of Medicine.

And I'm Dr. Elaine Hamm, the Executive in Residence for the Tulane School of Medicine.

And this is Bio from the Bayou.

Welcome back to another episode of Bio from the Bayou. I'm your host, Dr. Elaine Hamm, the executive in residence at the Tulane School of Medicine. And with me today is Dr. Pooja Majmoodar, and she is the director of startup banking at Silicon Valley Bank. Welcome to the show.

It's great to be here. Thank you, Elaine, and thanks, Ian, for having me on the podcast.

We're glad to have you here. Well, before we get into all the questions, I'd love to learn a little bit more about your background because I think it's very relevant for our conversation today.

Of course. And I get this question asked many times. I've had somewhat of an unconventional career journey. I started off in academic tech transfer after I graduated from Ohio University with a doctorate in molecular and cellular biology. And I guess that's where I caught my entrepreneurship bug, because my work, my graduate work, was part of a technology that was exclusively licensed to a company that was then called Phosphoplatin Therapeutics, headquartered in New York. They've recently rebranded, and the company's called Promontory Therapeutics. So that's when I got to see early-stage technologies being commercialized. And I started my journey in tech transfer at Rutgers, which is an R1 institution, the largest state university of New Jersey. Got my feet wet there, learned a lot, and moved on to overseeing early-stage inventions coming out of Temple University's main campus in Philadelphia. Temple is also an R1 research institution. Spent 3 years there before moving on to NYU, where I oversaw early-stage biomedical inventions coming out of the Langone School of Medicine, the College of Dentistry, NYU main campus, as well as a sprinkling of technologies from the Abu Dhabi campus. So I've worked alongside, hand in glove, with faculty physicians, researchers, postdocs, PhDs and understand the nuances as well as feel the pain points when research is done at academic institutions and, and how they evolve and they get into the marketplace.

So you've really been on all sides of the deal. So when you say pain points, you really have felt their pain deeply as someone who has taken something from the bench, being at the bench and then moving it forward. It can be a really hard journey.

So, yes. So the reason why I am in banking, having no finance degree or formal education in banking, is to not just bring the banking services for early-stage ecosystems, but to also bring the expertise, the knowledge, the trends in the innovation ecosystem to early-stage founders, because that is critical when you're embarking on your startup journey.

Well, that kind of leads me to my next question then. Tell us a little bit about your work at Silicon Valley Bank and what you do there.

So another great question, and maybe I can start off and let the audience know that Silicon Valley Bank is here. We are backed now by a 125-year-old stable bank called First Citizens Bank headquartered in Raleigh, North Carolina. We have an amazing fortress balance sheet. the amazing credit appetite and financial support from First Citizens. After the acquisition, First Citizens, they decided to leave SVB as SVB. The reason being there is no other bank in the innovation ecosystem that understands working with founders and investors the way SVB does. So First Citizens recognized SVB's critical role And it intends to maintain and build on our client-centric innovation-focused strategy and model.

And I think a lot of times when academics think of startups and funding startups, they either think of grants or they think of venture capital. What kind of services do you guys specifically offer to the entrepreneur, either at an academic institute or the entrepreneur that's looking to move their business forward?

So SVB, The bank was started 40 years ago in Silicon Valley to purely service the tech ecosystem. The bank in the following years evolved and started servicing healthcare, life sciences ecosystem as well. So we not only service— so my world is primarily early-stage startups and the early-stage ecosystem, meaning companies that are Series A and earlier and investors who are early-stage investors in the seed Series A realm. However, the bank services companies across many sectors, including tech, healthcare, life sciences, climate tech, fintech, right from inception all the way through exit or IPO, whatever the roadmap may be for that company. So going back to my team, the startup banking team, we are focused on building deep and authentic relationships with early-stage founders, investors, and ecosystem partners to improve their probability of success. So at this stage, at the early stage, we provide a market-leading platform, products and services at no cost to the founders, and reduce the friction, the lag time for our founders to reach their next value inflection point, be it on the R&D side, Great.

And I think you mentioned a little bit about SBIR grants in our previous conversation. Can you delve a little bit into that?

Of course. So the bank, SVB, also believes in being very market-aligned and industry-aligned when we are servicing clients that are in niche sectors. So having said that, we have healthcare, life sciences, device experts all working in our team and trying to understand not just the banking needs of our client, but to truly understand the business needs of our client base. So having said that, for the early-stage ecosystem, we work not only with incubators, accelerators, early-stage tech transfer units across the nation, but we also have strategic relationships with the funding agencies. So SBIR, especially NIH, which is the largest biomedical investor, or I should say a funder, of inventions in the sector. And SVB has serviced and provided mentorship to SBIR grant awardees. And this is important for us because SVB, as the way the bank has evolved, we not just service early-stage founders and companies across all stages in healthcare, life sciences, and other sectors, but we also provide support in terms of banking and other services to investors as well. So having said that, companies who do end up raising money non-dilutively through these federal agencies such as NIH and NSF, these companies essentially get a seal of approval or are endorsed by NIH, which make them even more attractive for investors as they're looking at companies for deal sourcing and also for founders who are looking to raise funding down the line. So having said that, the partnership with government agencies is an important one for SVB.

Okay, so I'm actually going through this process myself right now. I have raised a round of funding. We're doing the closing docs. Hopefully checks are going to be coming in. But now we're on— and it's a good problem to have, but now we need a bank as a startup. And what are the next steps for us? And then what does Silicon Valley Bank offer to a brand new startup besides, you know, a place to hold their money and help them grow?

That's a great question because how do we differentiate ourselves with other banks. And it's important for early-stage founders to know that what SVB provides is value beyond banking. And I can delve into that a little bit. When an early-stage founder comes to SVB, we provide them with an amazing platform that involves the founder, the ease of use of doing their day-to-day banking. There is no cost to becoming a client, an early-stage client at SVB. But once a client sets up a banking relationship with us, we then work with them hand in glove, providing them the industry reach and the network connectivity that they would need in the early stages. We also have an amazing program called Offers for our early-stage clients. So if an early-stage founder needs to see what SVB has to offer beyond, you know, a place to park their funds, they can go on to svb.com/offers. .com/offers to see the host of discounted offers that SVB has vetted from a variety of service providers. And the reason for doing this is SVB wants to take away the friction of managing day-to-day operations of an early-stage company. We want founders to really be laser-focused on ramping up their R&D efforts and making the right connections in the industry so they speed up the fundraising process. I always tell my early-stage founders, time is not of the essence. Time is your enemy in the early stages.

Absolutely. And that's such a key part. You don't think about those things. Just the basic mechanics can really drag you down as a startup founder of, wait a minute, how do I send a wire transfer and figure all of those? I mean, it seems so simple and straightforward, but once you're in it and having to take your attention away from your day-to-day, which is what they gave you the money to do, you find yourself spending too much time doing the wrong things. And so I think it's really important that founders think about how do we streamline operations so it can be a little more set it and forget it and make sure that they're focused on the value proposition they're supposed to be delivering.

Of course. And speaking about streamlining, we heard this today. We've been seeing this firsthand. And Elaine, probably you have been seeing this also as you're fundraising. The macroeconomic headwinds are pretty severe. They have been for the past year and a half. So at this stage, it's all about how are you managing your cash flow? Are you being strategic about developing your assets? Are you thinking about key milestones? Who is on your board? So having said that, it is really important for early-stage founders to come across as really savvy, not just on the science, but also on the strategy. Thinking not just 1, 2, 5, but 10 years down the line, and SVB helps them develop that roadmap. I'll share an example with you. Generative AI and machine learning— it's not that these are new things, they've been around, but there's been a significant uptick in technologies adopting AI and machine learning, and this has had a positive impact in the biomedical space. We are seeing more investments in companies that have adopted these technologies to really differentiate themselves from their competitors. Editors. Having said that, some of our clients are in the space, and these days are incredibly interesting because investors are looking to invest more in the space. And companies, when they come to us, they're looking for feedback. I need to get my company evaluated. I have this amazing IP. I need a subsector expert to file patents for me. So our team makes sure that put our founders in touch with the right people so they don't miss a beat on getting connected with investors and also growing their R&D expertise.

I think that's a really great point, especially the point about having to stay so many steps ahead. I mean, if you're— I'm already thinking about our Series A after I've barely even closed the seed round because you have to, especially in this, as you said, financial climate. It's pretty miserable. So it's nice to be able to have a plan and have support in place to help you deal with that and how do you pivot if you need to. And so that's great that you guys can offer those types of services.

Yes, and a lot of savvy entrepreneurs and CEOs, they know that maybe having a wet lab space at an incubator is not the right choice because of cash constraints, capital constraints. So outsourcing is the name of the game these days, and we understand that. So we make sure that if they are in need of specialized services either within the state or outside, side, if they're looking for expert advice but they cannot afford to hire FTEs, full-time employees, we make sure we connect them with the right people who can work part-time, so fractional CFOs. So this is exactly what we do with our early-stage founders, is we make sure we direct them and connect them with the right stakeholders in the ecosystem.

No, that's great to hear. So touching upon the strategic partners, Describe the ecosystem of collaborators or strategic partners that SVB has built for entrepreneurs.

So the practice, the startup banking practice at SVB for healthcare life sciences, it's a national practice. We work with early-stage founders across the country, and we also keep an eye around deal activity and where are most startups coming out of. So having said that, we kind of have a finger on the pulse of the market. NorCal and Cambridge, Boston, they've always been and they still are the top hubs for biotech. New York City has bubbled up as a health tech hub over the last couple of years. So having said that, being a small, lean team, we try to maximize our time in most major sectors where we are seeing a lot of early-stage activity, a lot of spin-out activity. So having said that, SVB and our team, we have strategic relationships with a lot of university incubators, accelerators. We also have strategic partnerships with LabCentral, with biolabs across the nation. And maybe I'll give you a good example. So QB3 Baker Labs is a biotech device, life sciences incubator space within the UC Berkeley campus, and they are one of our strategic ecosystem partners. So SVB, we work closely with the companies that are incubated at Baker Labs and also provide them with the 360 support that they need as they're growing their companies at Baker Labs. So that's how we've been working with the early-stage ecosystem across the country.

That's great. And I hope that's one of the reasons that you're here as well, is that the Gulf South region is one of those hubs that are bubbling up. I think one of the things that's great about conferences like BIO on the Bayou is that we bring together a number of different universities and startups from this region into one place. And of course, in New Orleans, I mean, that's a great place to visit as well. So we are very happy to have people such as yourself, as SBB, to help show startups what else there is that they need to do to get what they're doing from their lab to every lab. Of course, the last burning questions for startups, entrepreneurs, academics that are thinking about starting a company is, does SVB invest in startup companies? Because this is a really challenging time to raise money, and love to hear your thoughts on that.

Sure. And this is a question that's probably one of the first questions.

Usually it's the first one. Yes.

So when I receive inbound from early-stage companies, they want to pitch to me in the hopes of getting investment dollars from SVB. SVB does not invest in early-stage companies. And by early stage, the way SVB defines early stage stages, Series A or earlier, which is also my world. We, however, we make sure that we get them to the seed Series A milestone sooner. So that's our goal within the startup banking team. We do come in at a stage post-Series A where SVB comes in as a lender. We have been extremely successful in providing early-stage companies, Series A and beyond, with capital to extend their runway between 2 equity rounds. And just to give you a sense of how active we've been in the lending space, just in Q2-Q3 of 2023, SVB has executed— tech and life sciences combined— the growth team has executed over 100 term sheets with early-stage companies, providing them the much-needed capital in the current environment where capitalists is very hard to come by. So this has been a great financial instrument for early-stage companies to not just stay afloat, but also plan next steps 12, 18, 24 months down the line. And at the growth stage, SVB being such an integral part of the innovation ecosystem, we not just help them on the lending side, but also helping them connect with the right investors. So we help them ramp up fundraising as the company grows and scales.

That's great. I mean, sometimes I think the phrase is more money, more problems. It's great to know that there's actually solutions out there once you, you actually do have money. It can— there's a lot more that has to be done. The work can finally start, and sometimes it's nice to have a little help in the way.

So yes, non-dilutive funding is the way to go. SBIR, STTRs, venture debt, all of them are fair game these days.

Absolutely. Well, Pooja, thank you so much. We appreciate you spending your time with us here this week in New Orleans and joining us for BIO on the Bayou. And we look forward to following SVB in the future and your continued engagement with the Gulf South region.

Of course. I had an amazing time and really excited to be here at BIO on the Bayou and looking forward to meeting some amazing founders.

Great. Well, as always, we will have Dr. Majmoodar's contact information and informational links posted in our show notes. Make sure you check them out to learn more.

This episode of Bio from the Bayou was recorded at Bio on the Bayou, our annual event showcasing academic science, biotech, and startups from the entire Gulf South region. Save the date for 2024, October 29th and 30th. Check out bioonthebayou.com for more information. Thanks for joining us for Bio If you'd like to learn more about the emerging biotech scene in New Orleans and the Gulf Coast region, visit us at biofromthebayou.com, where we have more info on who we are, how to get involved and connected in biotech in New Orleans, and the industry events we'll be hosting where you can meet with us in person.

And we'd be remiss if we didn't give a special thanks to the Accelerator Network for providing funding for this podcast. Learn more about them in our show notes.

We'll catch you on our next episode of Bio from the Bayou. From the bike.