From Academia to Entrepreneurship: Part 2

September 12, 2022

It’s Thursday evening after work and I just got my ass whooped by Guy in jiu jitsu, the founder of Cytonics. For the third time. That day. And there was nowhere else I wanted to be. It wasn’t always this way. Cytonics is actually the longest “job” I’ve had at one company, and I just passed that milestone last year. It’s a testament to the team: Guy, Gordon, Tracy, and Phil of the board for taking a big bet on a 27-year-old kid with zero executive experience. No one could have predicted what would happen over these last four and a half years.

Before Cytonics, I had spent the majority of my time as a disillusioned academic, and later a deeply unsatisfied investment banker. I’ve always been a “producer,” capable of handling a huge workload, but the avenues in which I chose to apply myself had been consistently narrow, siloed roles where my work seemed to have limited impact in the greater scheme of things. This search for “real-world” impact was an omnipresent force in my life.

I first tried to expand my impact into the world of finance. The extent of my knowledge at that time came from Econ 101, a book called “What Is Investment Banking,” and “The Big Short”, but somehow I managed to convince a group of senior investment bankers that I would be a great addition to their healthcare banking team.

As it turned out, my experience working as an investment banker was underwhelming. I spent years preparing pitch decks and performing diligence on wonderful biotech companies, meeting many extremely smart and talented founders in the process, but the reality was we were in over our heads. It slowly became apparent that the senior management was not prepared to successfully “bank” biotech deals. Nonetheless, I kept my head down and continued to produce a tremendous body of work (you should see my Google Drive…) The investment bank eventually went under, and I was out of a job living on my best friend’s couch. Uninspired and disengaged, I entered one of the lowest points in my life. I needed something challenging to do.

Jiu Jitsu Principle

Training jiu jitsu with Guy was at first a professional move. Guy has dedicated his entire life (outside of being a world-renowned spine surgeon) to training and teaching this Japanese martial art. I figured building a relationship with the founder would be beneficial for obvious reasons (it’s always better to like the people you work with). But soon, I saw that the philosophy of jiu jitsu spoke to truths that answered some of those deepest questions I had struggled with all my life. Many of the feelings of anxiety and disconnection disappeared as I learned to leave my mind and enter my body (it’s fair to say that jiu jitsu is an active form of meditation).  I soon realized the calming power of jiu jitsu, and I have dedicated all of my free time to learning and teaching the art.

Last year I started a jiu jitsu school for women and children. It all began with a friend who needed a physical outlet to process her trauma. I never could have guessed the impact that our training would have on her life. I had no idea what I was doing, but I was definitely on to something. Her enjoyment was infectious, and soon I had three regular students who train with me twice a week! I realized the value in making this martial art accessible to those that may not have the means or confidence to walk into a MMA gym and start sparring. It gives me tremendous pleasure to share this art that I love and build a community around the core principles of respect and hard work. I take teaching very seriously, and it has become a core part of my life.

Jiu jitsu has instilled three core tenants by which I structure my training and directly translate into how I operate both personally and professionally:

  1. Be Water – Instead of resisting and trying to “brute force” my way through challenges, I learned to pause and be more deliberate about my problem solving.
  2. Embrace the struggle – drug development is a long, arduous process fraught with business and scientific challenges. The only thing you can do is keep your head down, compartmentalize, and do excellent work. Success is measured over years.
  3. Quiet confidence – We live in a culture where the consummate extrovert is worshiped, and some people think the loudest person in the room is the smartest. I’ve learned from jiu jitsu that the deadliest guys are often the kindest, funniest, and unsuspecting. Speak less, listen more. You’ll learn a lot more this way.

Jiu jitsu that the deadliest guys are often the kindest, funniest, and unsuspecting. Speak less, listen more. You’ll learn a lot more this way.

How Equity Crowdfunding Propelled Cytonics

It’s no coincidence that as soon as I started training jiu jitsu with Guy my professional success started to take off. In the first few months I raised over $1M through private placements and equity crowdfunding. The company was fully transitioning from a medical device company into a biopharmaceutical company—expanding the market value of our regenerative medicine technologies by leaps and bounds.

When I joined Cytonics the company was in a bad financial situation. We had $300,000 in the bank (2 months of cash runway) and our private equity sources had dried up. I needed to raise as much money as I could as quickly as possible to keep our research and development program on track.

Historically, biotech companies raise money from private equity sources (e.g. venture capital) and burn through it very quickly. Hopefully, they will have acquired a significant amount of positive data before they run out of cash and have to raise capital again. These private equity sources are aggressive and like to take large percentages of the companies they invest in.

As a biotech CEO, you want to increase shareholder value while minimizing dilution of your shareholders. This means that you do not want to bring in investors that will slash your valuation to the ground and take a huge share of the company.

The lay public has very little insight into this process, and some people think that we are all in cahoots with each other, getting rich off of naive patients. This is not true. The industry is not perfect, but in the aftermath of the opioid crisis, it’s no wonder that there is a lot of skepticism about the pharmaceutical industry. What if we could reduce the opacity surrounding the drug development process and also allow the public to participate in the growth of the industry? How can we both educate the public and allow them to reap financial reward? Equity crowdfunding was the answer.

By the time I joined Cytonics we had exhausted our private equity investors. We were going to have to approach non-traditional funding sources to keep our research and development machine plowing forward. We were going to have to become more “nimble” than the traditional biotech, cut the fat and be willing to adopt atypical approaches to developing our drug, CYT-108. We were going to need to Be Water.

I’d be lying to you if I said this was an easy sell. Even our Board did not believe that I could raise capital via non-traditional investors. Guy even went as far as to make a personal bet with me that I would not raise a dime on SeedInvest. Well, I certainly proved him wrong!  I finally felt like I had come into my own and was capable of being a biotech CEO when that first equity crowdfunding campaign came to a close with $5M in fresh funding.

It’s been a challenge explaining Cytonics’ value proposition to a lay audience. But I’ve actually enjoyed educating people on the industry and what goes on behind the curtain of a biotech company. The crowdfunding capital we have raised to date is a testament to the public’s desire to get in on biotech and participate in the forefront of research and development. No longer are biotech investments relegated to the “old guard” of private equity institutions. Equity crowdfunding has democratized early-stage biotech investing.

The Future of Cytonics

I am enormously grateful for the miraculous stroke of luck that has allowed my story to come full circle. I studied protein engineering in grad school with absolutely no idea of how I would apply it. I taught myself “Wall Street” with no end goal in mind. None of this would have been possible without exceptional mentorship. I’m now able to be that mentor for others, which has been immensely pleasurable and something I take very seriously. All of the dissatisfaction I had with my previous lives melted away when I took Cytonics’ reins, and I’m keenly aware that I have been granted a unique opportunity to grow as a person and professional. I’ve finally found my place.

Now that you’ve learned about my past, allow me to give you a sneak peek of the future.

I started working with Cytonics in 2018. Within 4 years of my tenure we have finished the drug discovery and preclinical studies of our drug, CYT-108. We are now on the verge of our first-in-human Phase 1 clinical trial, which this ongoing equity crowdfund raise will fully fund. Clinical trials take on average 6-7 years, but we do not intend to take CYT-108 all the way through the FDA approval process. Instead, our goal is to complete a Phase 2 study (demonstrating the efficacy of the drug) and begin soliciting interest from potential acquirers (e.g. Big Pharma). Once a deal is on the table, our Board of Directors will negotiate the terms to represent the shareholders’ best interest. Then, the acquirer will purchase each shareholder’s stock for the agreed upon price. This is how our shareholders will realize a return on their investment.

No one knows what the future holds, but I truly believe this is the best time to invest in Cytonics. Honestly, sharing my story in this article intimidated me. As an executive I’m used to delivering tidy conclusions, not discussing the human element behind my decision making. But I’m willing to be pushed outside of my comfort zone if it helps people understand who we are and what we stand for. We are on a mission to cure the world of a debilitating joint disease that robs people of their quality of life. This is a monumental task that we take very seriously. I would not be able to do this job effectively if I did not realize the enormity of the undertaking, and had not been painstakingly preparing for this role in my past lives as an academic researcher and investment banker without even knowing it. I hope that you appreciate this glimpse into my life, mindset, and passion for Cytonics.

Every journey is defined by the people on it. I appreciate you for taking the time to learn about mine, and I hope you’ll join us on ours.

Download the Investor Brief
see slides 16 and 17 for preclinical study results