Recent exits in Swiss biotech show interesting features

February 24th, 2015

In the last 12 months, 3 biotech start-ups from the Zurich area have experienced an exit. Molecular Partners went public on the Swiss stock exchange (see my post from Nov. 21) and two other start-ups have been acquired, Covagen by Janssen (see news release dated August 2014) and GlycoVaxyn by GSK (news release from Feb. 2015), both for about CHF200M. I had already written a post entitled Swiss Founder’s Dilemma in Decembre 2013. But I had not at the time published precise individual capitalization tables. Here they are.

Covagen cap. table – click on image to enlarge

GlycoVaxyn cap. table – click on image to enlarge

The next table compares some interesting features such as levels of investments and dilution:
click on image to enlarge
I could have added the university equity which was in the 5-8% range at incorporation to be reach 0.2-1.8% range at exit. An interesting additional point is that the IPO seems to induce less dilution and more value creation than the M&A.

The liquidation preference is another interesting feature. The Glycovaxyn case was interesting with a complex mechanism. Despite its complexity and because the acquisition price was much higher than the amount invested by the VCs, the resulting stakes were similar to a plain vanilla prorata shareholding.

I just added these companies with a couple of others to my series of cap. tables and updated my file soon!

In the French speaking part, EPFL has enjoyed some exits too in the last two years: Jilion, Sensima, Aimago, Composyt. Interestingly the exit values were lower and VCs non-existent. But VCs have been active too in the last 5 years. Hopefully some nice outcome will happen in the near future…

“You have money, but you have little capital”

February 8th, 2015

Here’s my most recent contribution to Entreprise Romande. Thanks to Pierre Cormon for giving me the opportunity of this opinion column.


“You have money goal you-have little capital.” This is essentially the phrase that the US ambassador in Switzerland, Ms. Suzie Levine, delivered at a ceremony in honor of the ventureleaders alumni – a group of young Swiss entrepreneurs – last November 15 in Bern. She said she remembered it after hearing it from one of her recent contacts. I also quote her from memory and since then, I thought about it many times, trying to understand it.

“You”, of course, is Switzerland. We have money, for sure. Switzerland is rich. It is doing well socially, economically and financially. And Swiss companies invest wisely. It would not be fair to take “little capital” at face value, if one defines the capital by what is invested. I feel compelled to repeat “You have money, but you have little capital. »

The first explanation, the most obvious probably is due to the factual finding of the weakness of the Swiss venture capital. The figures vary from 200 million to 400 million per year, depending on whether one defines venture capital as the money invested in Swiss companies (regardless of the origin of the capital) or capital invested by Swiss financial institutions (regardless of the geography of the companies). For comparison, venture capital in Europe is of the order of 5 billion and in the US of 30 billion, or 75 times less in Switzerland than in the US, while the population is 40 times smaller.

A second explanation, perhaps less known, is related to the relative lack of “business angels” (BAs). While Switzerland has the highest density of “super-rich” and one of the highest living standards in the world [1], investments by individuals in Swiss start-ups are limited. Swiss startups unfortunately do not benefit from this potential windfall: the amounts invested by BAs are around 50 million per year and 30 billion in the US. And the situation is even worse: most of the US investment is made in two regions (Silicon Valley and Boston), which does not allow anymore to poner the figures in relation to the population size.

Some players such as SECA, the Swiss association of private investors, or the Réseau through its “manifesto for Swiss start-up” [2] are conscious of the deficit. They lobby to create new venture capital funds of funds and favor private investment in start-ups with lower taxation.

Finally, but this in itself would be the subject of another article, the transition from business angels who provide the first funds (up to a million in general) and venture capitalists who are involved from 5 to 10 million is much less natural than in the US because of a lack of trust and mutual understanding.

However, I fear that the citation / title of this article can not be explained solely by the finding of simple numbers. The third explanation, I should say interpretation of the word capital is that of human or cultural capital. The strength of the US investment in innovation was not financial only. It requires individual attitudes more than economic reasonings.

One note: it may be useful to recall that institutional venture capital – funds from pension funds and corporations – was born out of the vision of a few individuals who believed in the potential of innovation in entrepreneurship; it is the business angels who created the venture capital (not the reverse). This vision comes from a typical American optimism and also more prosaically from the fact that these first business angels had made money by betting on innovation.

The Swiss money is less adventurous and above all – this is often said to me – from a capital creation of more traditional and maybe less innovative economic value. It is also transmitted by inheritance. As it is more hard-won, the fear is stronger of losing it and the confidence lower to make it grow again. Risk taking and lack of stigma associated with failure are typical features of American entrepreneurship, this is well known. We can better understand the (good) reasons for this larger Swiss (and European) conservatism.

Worse: because the financial capital travels easily and many Swiss start-up entrepreneurs look for their investors in London, Boston and San Francisco, this cultural capital is lacking in Switzerland. I do not speak of the quality of the executives in the large companies and SMEs, who perfectly manage their businesses and rarely leave them (rightfully maybe!) to create their businesses. I speak of the non-existence of men and women who have succeeded in the world of startups. One could become tired of always refering to Daniel Borel as the “role model” of Swiss high-tech entrepreneur. Silicon Valley has created in the same period thousands of millionaires in technology, wealthy individuals who systematically reinvest their money, and their time most importantly, in new adventures.

I had found the quote a little unfair, when I first heard it, because I had misunderstood it and at worst easy to fix if it referred to a lack of financial capital. I realize it refers to an even more serious situation as it takes time if we want to change a culture.

[1] Le Matin (May 2012):
[2] Bilan (June 2014)

PS: the following table was not in the article but I had included in my book to explain the “cultural” differences between American and European venture capital.

Cruttenden VC US  Europe 2006

My top 10 (must-read) (business) books

January 22nd, 2015

After reading a couple of top 10 and must-read list of books, here is an exercise I had never done. I went through my past readings and quickly built my own top 10 / must-read – business books. If you want an exhaustive list you could have a look at all the Must Watch or Read articles on this blog. here is my ranking:

#1: The Four Steps to the Epiphany by Steve Blank,
(subtitled Successful Strategies for Products that Win)


Although it is rather painful to read because of the density of advice and check-list, it is the must read book for any entrepreneur who must understand the complex relations between building a product and service and selling to customers. Here is my post, dated November 2013.

#2: The Hard Thing about Hard Things by Ben Horowitz.
(Building a Business When There Are No Easy Answers)


A honest and toughest account about what entrepreneurship means. As the great Bill DAvidow was saying, “Being an entrepreneur is not for the faint of heart”. More about my account dated May 2014.

#3: Regional Advantage by AnnaLee Saxenian.
(Culture and Competition in Silicon Valley and Route 128)

Not a book about entrepreneurship but about high-tech clusters. Saxenian explained (already) in 1994 why Silicon Valley had won. It is the book to read to understand what start-ups really are and why they are important. A short indirect account dated October 2011.

#4: The Black Swan by Nassem Nicholas Taleb.
(The Impact of the Highly Improbable)

It is not directly related to innovation and entrepreneurship, but successful start-ups are highly improbable events with huge impact. A fascinating book I first talked about in July 2012 but I mention the concept and author so many times you could also check the tags Black Swan and Taleb.

#5: The Man Behind the Microchip by Leslie Berlin.
(Robert Noyce and the Invention of Silicon Valley)

The Man Behind the Microchip

The best (in fact nearly the only!) biography of an entrepreneur I read so far. It’s great, moving and full of information. You can read my short account dated February 2008 but you could also read more in The Tinkerings of Robert Noyce dated August 2012.

#6: Founders at Work by Jessica Livingston
(Stories of Startups’ Early Days)


Great interviews of start-up founders with an account dated June 2008. I had read before and I read since many other books built with such interviews. No doubt this is the best one.

#7: I’M Feeling Lucky by Douglas Edwards
(Falling On My Feet in Silicon Valley)

I could not have a top 10 list without a book about Google! This is my favorite one (but close to #8). When a marketing expert is hired by two crazy founders and learns he does not kwow so much about marketing and many other things. And in addition, it is the funniest business book I have ever read. My account is dated December 2012.

#8: How Google Works by Eric Schmidt & Jonathan Rosenberg, with Alan Eagle.
(The rules for success in the Internet Century)


I initially thought a book written by the chairman and former CEO of Google would not be very enlightening. I was totally wrong. great lessons. great advice. A recent account dated November 2014.

#9: The Art of Start by Guy Kawasaki.
(The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything)


The best book about what you need to say with a powerpoint pitch or write in a business plan. A simple, direct to the point about launching any venture. One of my oldest (and shortest) posts, dated March 2008

#10: Against Intellectual Monopoly by Michele Boldrin and David K. Levine.


An important analysis of the crisis of intellectual property: “It is common to argue that intellectual property in the form of copyright and patent is necessary for the innovation and creation of ideas and inventions such as machines, drugs, computer software, books, music, literature and movies. In fact intellectual property is a government grant of a costly and dangerous private monopoly over ideas. We show through theory and example that intellectual monopoly is not necessary for innovation and as a practical matter is damaging to growth, prosperity and liberty.” I wrote many posts about it, the latest being dated May 2013.

#11: Something Ventured

It is so difficult to build such lists, I cheat twice! First with the greatest ever video document about Silicon Valley. You must watch and listen to Sandy Lerner, the co-founder of Cisco. And it is freely available on youtube, so no excuse not to watch this fascinating movie. My account is dated February 2012.

#12: The Unfinished Debate about the Individual and the State between Peter Thiel and Mariano Mazzucato


My second extension to the top 10 is made of two books! Peter Thiel is the author of Zero to One (notes on start-ups or how to to build the future). Mariana Mazzucato wrote The Entrepreneurial State (debunking public vs. private sector myths). But again, I produced so many posts on the topics they address you can also check the tags Mazzucato and Thiel. After the terrible events “Je Suis Charlie” which happened in Paris in early January 2015, these two books remind us about the complexity of analyzing how individuals and groups (societies, institutions, states) interact (with some tension) to create and innovate.

The Dark Net by Jamie Bartlett

January 16th, 2015

I did not think when I bought this intriguing book about the hidden faces of the Internet that I would relate it to my three previous posts. The world is dangerous, the physical world is dangerous as we all know and as it was confirmed in Paris last week (A tribute on Jan. 8, We are all sad on Jan. 7). It is also known that the online world may be dangerous as illustrated by Jamie Bartlett in The Dark Net. I am not sure that the authors of How The Web Was Born (Dec. 2) had envisioned such possibilities.


Bartlett is not really pessimistic about the web. In his conclusion, he states: Technology is often described as “neutral”. But it could be more accurately described as power and freedom. […] The dark net is a world of power and freedom: of expression, of creativity, of information, of ideas. Power and freedom endow our creative and our destructive faculties. The dark net magnifies both, making it easier to explore every desire, to act on every dark impulse, to indulge every neurosis.[…] Each individual responds differently to the power and freedom that technology creates. It might make it easier to do bad things but it’s still a choice.

In his book Bartlett talks about the trolls (you may also want to read the recent MIT Tech Review article – The Troll Hunters), the lone wolves (such as Berwick), about Tor Hidden Services, about Bitcoin, about illegal sites selling drugs such as Silk Road, about online pornography and paedophilia, about self-harm and finally about transhumanists against anarcho-primitivists. Written this way, I am not sure I am doing a good marketing for the book, but the truth is that with the exception of terrorism, the author addresses many dark sides of the internet. It is a fair and good description of what the Internet hides (“close to its surface” [Page 238]).

These are important topics about freedom, about the evolution of our world, and I can only quote a famous French thinker: on France Culture, earlier this week, coming back about the Paris terrorist attacks, Regis Debray explained that the Western world is the primacy of the individual over the group. The Eastern world it is the reverse.” And I am not sure I understood if there was a value judgment or not, he added: “And the West today represents modernity.” I strongly believe in these values and I understand the risks linked to them, but I do not think we have much choice. You may want to read The Dark Net if these topics are of interest for you…

A tribute

January 8th, 2015


We are all sad…

January 7th, 2015


How the Web was Born

December 2nd, 2014

How the Web was Born is a book I bought recently while visiting CERN in Geneva. It was written by James Gillies and Robert Cailliau and published in 2000. If you like history, you will appreciate this detailed account of more than forty years of technology developments. I am not yet finished, but there were a couple of things I wanted to mention here.


– Public funding, mostly through (D)ARPA has been critical for the emergence of the Internet.
– Xerox PARC with its freedom to explore in the 70s has also been instrumental even if it did not directly benefit from its innovations. I did not know key people were coming from ARPA (again).
– When in 1987, CERN needed equipment that could guarantee and secure data transfer, it used he a small 3-year old company… Cisco.
– They were similar experiments to ARPANET in the UK and France, but with different dynamics… [In France] “this apparent success is tempered by the fact that CII had been selling its products at a loss, despite billions of francs of state investment, and the resulting company, again called Bull, is but a small player on the world stage. American success stories like DEC and Apple were launched for the equivalent of less than a single day’s funding of the French Plan Calcul and that from private funds. The lesson to be learnt is that state investment alone isn’t the answer. France’s Délégation à l’Informatique included not a single computer scientist, and was motivated by national pride rather than economic viability, noted a 1997 French government report. Partly because of this, ‘the failure of CII was written in its genes’, one former director of Bull was moved to say. The American approach, on the other hand, most strongly expressed through ARPA, had been to support good ideas coming from the ground up rather than trying to impose something from the top down.” [Page 58]

Indeed the TCP/IP protocol won because it worked but not because it was planned… The Internet is an amazing innovation which does not belong to anyone but is the result of collective endeavors. Again, the role of the state is shown as a friendly enabler more than a direct actor. Interesting lessons (or at least useful reminders)…

Celebrating a (too rare) Swiss IPO: Molecular Partners

November 21st, 2014

I could have said: Celebrating a (too rare) European IPO. Molecular Partners is a spin-off from the University of Zurich, founded by Professeur Andreas Plückthun, Christian Zahnd, Michael Stumpp, Patrik Forrer, Kaspar Binz and Martin Kawe in 2004. It was funded by private investors: a first round of CHF18.5M in 2007 and a second round of CHF38M in 2009. Molecular has also signed a number of agreements with pharmaceutical companies, which explains the high income for a biotech start-up. The University of Zurich is also a shareholder thanks to a license agreement signed in 2004, through which it also receives royalties.

click image to enlarge

I think it is interesting to illustrate the evolution of its ownership trhough the financing rounds, including the IPO that has brought about a hundred million to Molecular.

click image to enlarge

I also like to mention the age of the founders. The IPO document provides data and I “guesses” the others from the academic career (based on a age of 18 at university entrance…) It gives an average of 33 with a range of 20 years between the extremes. I know that money is a taboo; Europeans do not like to disclose their wealth, which remains highly theoretical, because one does not sell shares in a biotech as easyly as a Facebook employee… But it seems to me important to celebrate the success of founders and their investors … Congratulations to all!


Something rotten in the Google republic?

November 20th, 2014

I should have added a point of disagreement or discomfort in the analysis made by the authors of How Google Works. On page 125, there is a short section called Disproportionate rewards:

“Once you get your smart creatives on board, you need to pay them. Exceptional people deserve exceptional pay. Here again you can look to the sports for guidance: Outstanding athletes get paid outstanding amounts. […] Yes they are worth it (when they perform up to expectations) because they possess rare skills that are tremendously leverageable. When they do well, they have disproporationate impact. […]

You can attract smart creatives with factors beyond money: the great things they can do, the people they’ll work with, the responsability and the opportunities they’ll be given, the inspiring company culture and values, and yes, maybe even free food and happy dogs sitting desk-side. […] But when those smart creatives become employees and start performing, pay them appropriately. The bigger the impact, the bigger the comp. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.”


I am in fact coming back to Capitalism in Silicon Valley following my contribution on France Culture. My French culture naturally favors the collective rather than the individual, while America has a reverse culture. However, the excellent exchange between Xavier Niel and Edgar Morin (l’école de la vie) shows that the borders or at least the analysis are moving. “What can a young French do if he wants to get rich, which is not to be despised? Not much. So he/she leaves. If a young suburban, if excluded from the school system, he/she only has small jobs or illegal dealing. And it is tragic. […] The problem is that the state has no money. No money, no reform. There is no more vision and courage to face corporatism.” And there’s the problem of Republican elite which is out of breath. “The social elevator is not working anymroe. We have the worst grade among the OECD countries in this area. The elites are very little renewed. What hope can have a growing number of young people who will find it difficult to benefit from a system monopolized by a few self-proclaimed castes and other great public servants of the state, which management has also been poor?”

In California, Google also stirs controversy. The exclusivity and exception create exclusion. How to correct it? Picketty and others respond with tax. But Google and others do not pay (enough) taxes … And Eric Schmidt does not addresses the issue of the collective and Google uses the law to optimize taxation. The “exceptional” and “outrageously” can become outrageous…

My discomfort is amplified by the notion of merit. In the field of science, one “grows up on the shoulder of other giants” and many have been forgotten. Albert Einstein. Didn’t he owe anything to Mileva? These exceptional individuals. Don’t they owe nothing to the surrounding environment, which may have helped? I’m much more sensitive to the other argument the authors use: “fight for the Divas” (page 48). I believe that in science, we have not listened enough to the exceptional behaviors such as Perelman and Grothendieck, two mathematicians who have withdrawn from the world.

I do not have answers and just intuitions. Between the elite, the exceptions, the rare individuals, and the collective, society, people, there must be a better balance. Between the negative taxes that the multinational corporations pay and the higher-than-the-annual-income taxes of some wealthy entrepreneurs, there must be a wise mid-point, which should help solve some issues of Silicon Valley on one side and Europe on the other side…

My coming out – in the world of start-ups

November 20th, 2014

No it is not a true coming out à la Tim Cook, but a much less spectacular message… I woke up early this morning very disturbed. As you can see below, the ecosystem to support entrepreneurs at EPFL (finance, coaching, exposure and office space) is rich and complex. Yet our results are average not to say mediocre… all this is in fact useless without the ambition and risk-taking of enthusiastic and passionate individuals.

I’m not talking about people, but the system. A few days ago, I said to colleagues I was a matchmaker. I encourage meetings and I put the oil in the wheels. Then I smiled, thinking – I’m usually not too vulgar – that I offered vaseline for introducing investors. Fifteen years ago, an entrepreneur who had enjoyed a chat told me that I made him think of a prostitute but hidden behind me, there were nasty pimps…

Two days ago, I was lucky to listen at EPFL to a Nobel Prize in economics who explained that the Western world is in decline, that the crisis can be explained in part by a weak innovation. Corporatism and financiarization are some reasons of this. Then there was a shocking message from another speaker. Switzerland would be fine because it is hard-working while its neighbor would go wrong because its workers start their weekend on Wednesday at noon. Who can believe that unemployment and bankruptcy in Detroit would come from the laziness of the automobile workers and the success of Silicon Valley because of workaholic nerds. Things are much more complex! Just see in particular the recent analysis of Thomas Picketty or the related MIT Technology Review Technology and Inequality.

Four days ago, I listened to the US ambassador to Switzerland and Liechtenstein. Suzi Levine knows the world of start-ups. She is therefore interested in the situation in Switzerland. I noticed two of her messages:
– First “you have a lot of money but little capital”, I leave you to think about the message that was given to her at EPFL I think, “you have a lot of money but little capital”.
– Second, the weakness of the female presence in this entrepreneurial world. She therefore particularly appreciated that the Prix Musy be created this year. But our efforts will be useless, if we do not encourage and allow the emergence of passionate and adventurous entrepreneurs that create wealth and value… it’s not just about women, but diversity in general which should not be hindered by corporatism and financiarization.


More on the EPFL support to entrepreneurs