Transitioning from academia to startup

Should I stay (??) or should I go (??)?

Academic research often leads to innovative technologies. But it’s tough to get those technologies to the marketplace. One way to do this is to spin-out a company.

I frequently chat with academics about this transition. It’s a big deal! Half of PsyMed Ventures ' portfolio companies are spinouts, so if you’re thinking about it, I can help.

Here are a few paths that I’ve seen to transition from lab to company:

1. Go full-time
2. Leave of absence
3. Advisory role
4. Multiple companies

More on each approach (and my preferred route) …

Become a full-time CEO (and leave academia)

• Example: Amit Etkin , founder of Alto Neuroscience . Previously, he was a tenured professor of psychiatry and behavioral sciences at Stanford. He left to advance his research and get precision psychiatric drugs into the clinic.
• Advantages: Allows you to devote full attention to the new company – this can be critical in the early stages of the company, when it’s important to build the business and secure funding (some VCs will only fund a company with a full-time CEO).?
• Disadvantages: You may lose touch with academic research. And there’s more all or nothing risk.
• Amit’s perspective: “I took a huge personal risk to pursue the vision of applying and scaling my research in the world at large. Persistence and iteration through the process have been key to Alto’s success.”

Take a leave of absence

• Example: Jacob Robinson , founder of Motif Neurotech . Jacob is a professor in electrical & computer engineering and bioengineering at Rice University . He took a leave of absence from his teaching and administrative duties to focus on Motif.
• Advantages: You’re able to maintain your academic affiliation while also working on the company. This can be helpful in terms of securing funding, extending your runway, and gaining access to academic resources.?
• Disadvantages: At some point soon you’ll need to decide if you leave your academic job.
• Jacob’s perspective: “I was very uncomfortable taking the CEO role at our company. I had trained my entire life as an academic and knew nothing about “business.” As the company has grown I’ve come to learn that many of the skills developed running the lab transfer to running the company. I expect the CEO skills will transfer back to running a better lab for those who may want to transition back to academia. Overall, the opportunity to grow and to make an impact on society outside of academia has been more rewarding than I expected.”

Join as an advisor

• Example: David E. Olson , chief innovation officer and head of scientific advisory board for Delix Therapeutics . Olson is a professor of chemistry, biochemistry and molecular medicine at 美国加州大学戴维斯分校 , and remained as an advisor rather than a full time founder.
• Advantages:?You can provide your expertise and guidance to the spin-out company without having to commit to a full-time role. This can be a good option if you want to be involved in the commercialization of your research but also want to maintain your academic career.?
• Disadvantages: You won’t have as much influence over the direction of the company. And likely less equity stake in the company.

Multiple companies

• Example: Elaine Hsiao , is a professor of biological sciences at UCLA, and she has co-founded many companies (PurposeBio, Kanobo, Bloom Science, Axial Therapeutics)
• Advantages: ?You can spread your risk by being involved in multiple companies. This can also be a good way to share your knowledge and expertise with a wider range of companies. This is more feasible for more prominent researchers, where association with and/or advising the company is enough.
• Disadvantages: Your time will be split among multiple companies.

My take

There is no single best way to get involved in spin-out companies. The best approach will depend on your circumstances and goals. All of the options discussed above have potential!

At PsyMed, we’re entrepreneurs first and foremost. We resonate most with teams that are all-in and that's reflected in the founding teams of our portfolio companies. Having said that, VC is a bad place to have hard and fast rules. Some of our best investments (like Delix) don’t fit this rule ??.

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*If you’re ready to go full time, Fifty Years ’ playbook is a great resource.

**Thanks to Greg Kubin and Caitlin Ner for reviewing drafts of this.

***If you’re building a company in mental health, I'd love to chat!