Nurturing Founder-Driven Ventures in Oxford with Peter Crane

[00:00:00] Susannah de Jager:

Welcome to Oxford+, the podcast series that takes you deep into the myths and truths of the Oxford investing landscape. I'm your host, Susannah de Jager and I've spent over 15 years in UK asset management. My guest today is Peter Crane. Peter is the co founder and CEO of Caeruleus Genomics, an Oxford University life sciences spin out founded in early 2023. The company is supported by influential local angels and international pre-seed funds. Peter has a background in venture capital, and I'm excited to hear his perspective as a founder and an investor in Oxford and beyond.

Peter, thank you so much for joining today. I am really excited to have you here because you have the perspective of both a founder and an investor.

Starting off, I really want to understand with those perspectives and your wealth of experience both here and of the US, why did you come back to Oxford where you studied to found a business?

[00:01:05] Peter Crane: Well, I mean, I've always lived in Oxford. So it was quite an easy decision to be based here, I suppose, for me, what are the ingredients that you need to start sort of a deep tech life sciences company, one of those is really great research and I think that's something that Oxford has in sort of spades. So for me, I sort of went away for a bit of time. I was an investor, I was early employed in a number of companies, coming back to Oxford, I was really surprised by how much incredible science that was here, how little of that was actually being looked at, with sort of critical eyes and actually being quite a small city, how easy it was to engage or how open Oxford was to engage with sort of people like me. So, for me, it was really about those critical inputs into a company and a key input for a life sciences tech company being, sort of great science and great sort of academic founding talent.

[00:01:52] Susannah de Jager: So you have a DPhil in chemistry, how important do you think that scientific background is when evaluating the science?

[00:02:02] Peter Crane: I think it's massively overplayed. I mean, so one of the main things I learned from my DPhil is I didn't want to be an academic, actually. It was a great forcing function to realize I didn't want to be a career researcher. So it actually pushed me to do a number of sort of things outside the lab, starting entrepreneurial initiatives, working with a number of founders, even back then, ten years ago, the actual DPhil in chemistry, I think, the main thing I learned was like sort of a love for reading and learning new types of science, less so than the pure chemistry itself. I do think you're, you are aware if you've done a scientific degree, how little you know, which I think is useful. So certainly for me, I do use my scientific training. Do I use what I learned in my DPhil and organic chemistry and chemical biology? Probably very little. That sort of love of science, love of reading, ability to critically evaluate science, and the ability to talk to academics, talk to scientists I use almost every day. So it's the sort of the soft skills you learn from a DPhil, I think are much more important than sort of the hard skills of, are you technical?

I do think there's something, that's sort of happened in kind of the last couple of years, maybe in venture capital where, deep technology frontier tech, it's become a much more important investment thesis. A lot of funds have looked to bulk up their sort of their technical capabilities, and that's maybe how I got my start in VC. I was one of those guys, you can put me on a slide deck and say, I've got a PhD. So everyone assumes you can look at technical stuff, but I do think it's overplayed quite a lot and I think actually what's much more useful is sort of the operational experience after DPhil of actually how you translate science or technology into a real world application.

[00:03:27] Susannah de Jager: That's really interesting and actually it resonates with something we've already heard that it's the skills that you get from it rather than the, you don't have depth in all areas evidently.

[00:03:38] Peter Crane: And just on that, I mean, right. I think there's a great track record of people that have, during their DPhils, PhDs, master's degrees, MBAs, whatever it might be, have come to, sort of top universities and have probably spent more time not doing their course and doing other things, founding, entrepreneurial initiatives, running societies, starting small businesses and actually the university environment is a very safe space to start a company or start an initiative, you get a lot of leeway to do what you kinda want, you get to learn those skills, hiring, firing, growing, pitching and actually, I think if you look at sort of the, some of the alumni from some of these entrepreneurial initiatives in Oxford, a lot of them have gone on found, multi-billion dollar companies. So I think it's actually even now as a venture perspective, I always look at those people that are doing those, sort of alternative things outside of their studies and really ask, are these the, next generation of, unicorn or big company founders?

[00:04:31] Susannah de Jager: Yeah, it made me smile in your kind of blurb that you sent me across, the China UK engagement and speaking, and this is quite niche, at the Paralympics in Brazil, at the UK government showcase. That really made me smile, A, because knowing you a little bit, I thought, of course he did that's just so natural, but you obviously were engaged in these initiatives right from the off, and what are the skills that you think it's helped you evolve that you're now applying day to day?

[00:05:00] Peter Crane: So I think the main one is a mentality, right? It's like a hustle and a grit, like of a lot of founding companies and, working with founders, it's just getting punched in the face every day and just getting up and sort of just keeping to do that. So it was really about that mindset and it was really about sort of that ability to sort of push yourself outside your comfort zone and every day just get rejection and just keep going. So actually, I don't think in terms of hard skills, I think a lot of this is like overrated, whether it's pitching or, but it's the mindset of like continuously iterating, continuously getting rejected and continuously just continue to push forward and I think that's why university is a great safe space to learn those skills is because you don't really have to worry about paying your bills. So you've got like an opportunity, a couple of years whilst you're getting a degree from an elite university to learn those skills, to learn how you do the basics, how you hire people, how you fire people, how you raise little bits of money, how you build relationships, and that's all very much soft skills.

[00:05:53] Susannah de Jager: I really agree. Funny enough, and this is taking it in a direction I didn't expect to, but as I hear you describe that and I agree with everything you've just said, clearly that tenacity, that ability to take knocks is brilliant.

Do you think that it leads to a personality bias in terms of those that will success? But furthermore, do you think it's represented in the gender bias of people that succeed in raising money and founding businesses? Because that characteristic as a huge sweeping generalisation, I would say is a stronger one in men than it often is in women who take knocks again, generalising more to heart.

[00:06:30] Peter Crane: So for me, that's, I suppose, an interesting observation is a lot of the people I worked with in these organisations were women and a number of them have gone on to found incredible companies, or become incredible venture capitalists, actually one of the two routes that people seem to take. So I'm sure that bias does exist. I've not seen it in my own personal data set, I've actually, probably seen more of the inverse, women who are striving and want to compete and win and that for me, that's again, it's really positive.

[00:07:00] Susannah de Jager: Wonderful. Another thing that came out when you were preparing for this podcast was you put a huge amount of import, understandably, on the investor base that you've taken on as a founder of your own business now, but obviously from your experience before.

What are the most important characteristics for you when you're building your cap table? What are you looking for? What are the additional skills that you absolutely want to see from those people you bring in?

[00:07:25] Peter Crane: So the company I founded were a pre-seed life sciences company, so we were very early, we raised about a million dollars just to prove out a couple of, early milestones about sort of overfunding the company. So as a early stage business, what am I looking for my investors? Well, I think the first thing I'm looking for is do no evil, and don't do, looking for investors that are not going to do things that might harm the company. So for us, we believe that the best people to be running a company at the founders, the founding team, when we're looking for investors that can support us across all the different challenges that we're going to experience.

So, some of our investors were super supportive in terms of the spin out process. Other ones have like very orthogonal networks, some into more of a UK investment community, some into the US investment community, some into more life sciences, some into more technology. So we have like a broad sort of coverage of different networks in the investor base. But yeah, the crucial thing at the pre-seed. is looking for investors that really understand that we're founders trying to build a big company here. Their job is not to tell us what to do, their job is to really to act as a sounding board, to sort of steer us and sort of give us an idea of what's happening in the market, but you know, really to back us as people and support us in that process.

So for us, we wanted investors that were very orthogonal, were very supportive, we're very aligned with our mission of building a really big, impactful company out of Oxford, and we've sort of found that, we actually found that in a sort of a kind of a mix of kind of pre-seed kind of angel groups, a UK spin out VC fund called Creative Fund, McFarlane, and then like sort of this range of like sort of super angels, people from Cambridge Angels, ex-partners from OSE, a number of individuals who are sort of very impactful people, and again, very supportive of backing founder driven companies.

[00:09:00] Susannah de Jager: You speak there about not replacing the team and clearly that is something that happens. How kind of dangerous a threat do you see that as a founder and how much does that drive your decision making around this?

[00:09:13] Peter Crane: It doesn't really factor in on a day to day basis at all. We're an early stage company, companies die for lots of reasons, our job is to stay alive and hopefully build, something that's big and impactful here, especially for patients. But I do think it comes down to sort of a mentality in the investor base and in this way, I think some life sciences investors have a lot to learn from tech investors, where technology investing is certainly a power law driven industry, a lot of the power law driven outcomes are driven by founders. I'd argue even in Oxford, whether it's Oxford Instruments or Exscientia or, I mean, you might even argue Nanopore, Gordon's been in there from the very beginning, as a founder driven company. If you're looking for people to execute quick flips, if you're looking for people to execute a known playbook, I think having an experienced management team absolutely makes sense. When you're trying to build a company with a much longer term scale, with much more ambitious vision, where maybe the playbooks are not so well established, I think that's where the founder really comes in and having people that want to back founders, I think is so important, because at the end of the day, it's founders that build impactful companies, the multi billion dollar generational companies, the Apples, the Abcams of this world and it's the founders that then build the ecosystems, they return wealth, they support people and they mentor the next generation of entrepreneurs to do that.

[00:10:28] Susannah de Jager: Really interesting that you bring up that mentorship point at the end there because it's something that I've heard from multiple sources is quite difficult within the UK because so often our great companies stay here, do a bit of scaling here and then they end up moving across to America either to list or because their investors become increasingly the West Coast Americans and they get encouraged to move over or indeed East Coast American investors. It is something that the UK has a bit of a quandary of how do you recycle the domestic talent back in so that the next generation can learn from them. As a founder in Oxford, do you see yourself able to stay here and be part of that virtuous cycle, or do you think it's almost inevitable at some point that you do have to move?

[00:11:13] Peter Crane: Well I mean, the first point is I think a lot of the founder driven companies are still in the UK. So, it's the Abcam and I think what Jonathan's been trying to do to stop that acquisition, I think, is incredible, which just shows the founder mentality never really leaves, whether it's Nanopore, still based in Oxford, Exscientia, still based just outside Oxford, came down from Dundee, these are all founder driven or...

[00:11:31] Susannah de Jager: You've totally disproven my question!

[00:11:33] Peter Crane: But I mean, I think the larger problem here is like, when you bring in a kind of hired management for a cookie cutter, factory production line way of building companies, rather than sort of the more power law, stochastic way of just letting great people build stuff, I mean you're always going to get the mentality of how do I get the quick flip? How do I hit the kind of both the stage and the geographical inflection point so I can get a...

[00:11:54] Susannah de Jager: That's really interesting that you're identifying that actually that model is almost adding to the want to head across and list on the NASDAQ and get that quick flip at a valuation that's more beneficial, but that actually backing the founders will have that more virtuous UK focused outcome.

[00:12:11] Peter Crane: Well, I think the problem is just what I mean great companies, enduring companies take a long time to build, right? So, when was Nanopore founded? 2009? 2005? Something like that? Years ago. Excientia started off as a consulting company that had moved into becoming like the number one AI discovery company globally, probably. I mean, these companies take a long time to build and, for that, I think that you need financing journeys where you really sort of raise more capital efficient rate, you've raised the rate amount for each round. You know, if your investor base is whacking 10, 20, 30, 40 million dollars, sometimes in the U.S even more into a series A or in some cases a seed round, of course people want to see a return on their capital. They put a lot more in there, execute the playbook, get on the market, go do NASDAQ for that, get on the market quickly and then, get capital return, I mean, it's a playbook and in the last couple of years, it's made a lot of people some funds. Sometimes they do it very well, there's a couple in London that do it very well, a couple in the U.S that do it very well. It's made them a lot of money, and it's like all credit to them.

I just think, in Oxford, there needs to be other voices and other ways of building those enduring, founder driven, long term businesses that then recycle wealth and anchor those ecosystems and I think for me as a founder, trying to build that founder driven company in Oxford, it is challenging, right? I mean, Oxford is a challenging place to build a company. I mean, we lack a diversity of early stage funds. We lack late stage funds that will then sort of come in a cap table and say, no, I want you to stay here, not sort of ceding to us funds, which should have mandate maybe a flip. It's hard to hire people here, I mean the ecosystem's just at that beginning point where we haven't quite got the density of, we've got a number of success stories in terms of amount of capital raised in terms of some of the early exits we've seen in some of these businesses, but we haven't had a company that employs a thousand people, two thousand people, we haven't had that sort of...

[00:13:51] Susannah de Jager: Recycling of talent.

[00:13:52] Peter Crane: Recycling of talent that's really sort of important. So hiring is hard here, convincing people to come, from London to Oxford is a hard sell when the transport doesn't work.

[00:14:01] Susannah de Jager: But it's a really nice place to live!

[00:14:02] Peter Crane: But it's a really nice place to live, and so it is hard, right? I mean, but I also think there's an opportunity here, which is I always think, what is Oxford's sort of like, real strength, right? And Oxford is a global talent aggregator. I think if you look at, sort of, the kind of the anti-portfolio from people that started their companies in Oxford and left, or had the idea in Oxford and moved to London or San Francisco and raised funding and started their companies there or left for six months and then founded their company, I think the anti-portfolio dwarfs the official story here and actually just giving landing space for people to start here would help solve those issues as well.

[00:14:34] Susannah de Jager: It's really interesting. I love this phrase, I've heard you use it before about the anti-portfolio and I'd love to actually be able to get some shape around what it looks like, what the scale of it is and really to interview some of them, why didn't they do it here? What were the problems? Because clearly that's the list of things that we should be looking to evolve, fix, make sure we supplement.

[00:14:52] Peter Crane: And I do think there's two stories to that. So one, for some of these companies, there's a clear thing around it. If your commercial market is the U.S., maybe there is a good reason if you're maybe a health tech company that you do need to, you need to be more U.S. centric earlier. I do think there is advantages here. The R&D costs are much lower than the U.S. So I think you can kind of arbitrage it between the U.S. and the U.K. markets, which is fine. I also think other ecosystems in the U.K. have been much better at retaining local companies at pre-seed series A and beyond and so I mean, I know there's always this argument that the U.S. Is pulling everyone out Oxford and out the UK, but actually I think we have to look at other ecosystems and how they've retained talent companies, capital in those ecosystems, and maybe asking what's the missing gap here in this ecosystem.

[00:15:33] Susannah de Jager: So what's the missing gap?

[00:15:34] Peter Crane: I don't know, it's rhetorical question.

[00:15:36] Susannah de Jager: Okay.

[00:15:37] Peter Crane: But I think if I was to offer maybe an opinion on it, I think it's maybe if you want to have large companies excluding like, the founder and all this sort of stuff, and I'd assume we've got that, we've got a global talent pool and assume we have lab space and if we had a WeWork, WeWork's gone bankrupt now, so maybe not a WeWork, whatever the next version of that business model is, sort of more co working spaces and spaces for companies to grow, assuming we have all that, what we need at the top of the funnel is maybe more shots on goal. So, I see these things where people are like, we're going to spin out 20 companies a year or build 15 companies a year and I think in Oxford, there's a little bit of a complacency. Let's add a zero, to those numbers. Let's say go to 100, let's go to 200. Let's get that pre-seed kind of first check funnel really firing. Once you've got that firing, you can worry about like the growth funding and the capital to make companies stay here. But I think, to get that hit that power law, you have to have more shots on goal and so Oxford spinning out 15 companies last year, whatever it was, I mean, 20 companies is really not, it's just for an academic institute of that size, it's just not good enough and I think we need to be more aggressive, let's get more at the top of the funnel and let's get more capital at the bottom of the funnel to help get those companies to stay here.

[00:16:47] Susannah de Jager: And going back to something you said earlier about the investors and the scaling capital, this is a podcast that we're aiming as an invitation to invest, how can we draw these people in perhaps that don't know enough about Oxford to feel comfortable, don't think there's a natural point of entry, want to understand more, dipping their toe. If you were speaking directly to those investors, who are the people that you would like to see more of here? And literally call them out, who are they?

[00:17:13] Peter Crane: Yeah, I mean, firstly, the point that you raise about there being no sort of entry point, I think, is really important. I think a lot of the kind of official entry points may be no longer, sort of serving the purpose that they maybe should have. So, when I talk to funds, I usually tell them, I mean, the first message is Oxford is open for business, right? And there is nothing stopping you from reaching out directly to academics, directly to people in the ecosystem that you want to talk to. There's no like magical fire around Oxford, the academic community will be delighted to talk to you, many of them are starved. There's not enough money coming in and they haven't got very good ideas and many have got great graduate students postdocs that want to move into those companies and stuff but in terms of like some of the groups that I think are really are doing God's work within this sort of respect, I think on sort of maybe more of the startup, sort of more early stage stuff. I think what the guys at Nuclear are doing is really good. They've got a, it's a kind of a more PhD postdoc centric network. They've got access to money in the top labs in Oxford, the postdocs that would have gone other routes are now thinking about building their own companies, founder driven companies. I think what's important there is they have access to, sort of an incredible U.S. investor base to the top 20, 30 biotech life sciences funds, or supporters of that group. I'd also point out groups like Welby London, who I think are fantastic. So this is a mentoring and educational organisation, which then also builds and invests in companies. So they do courses for postdocs and PhDs and really helping them to learn what it takes to be a scientific founder and again, have done Oxford deals as well, so strongly recommend them.

In terms of like, sort of other groups, I mean, I think there's like a range of investors, that all... whenever you talk to investors, whether it's late stage or early stage investors, I think the narrative is always the same, we think Oxford science is incredible, we'd love to get more involved, how do we do that? So I do think there's some organisations where I really have a lot of excitement about their models, organisations like Curie.Bio in the US, which is a kind of a seed stage investor where they want to put the founder in control. So it's the Eden Rock Ventures team. Let's put the founder in control and let's surround them with a network of CROs, drug hunters, incredible elite level mentorship to help them grow and build those incredible companies. So it's organisations like that offer different voices, which I think is really important and I don't think this is a case of like, saying that existing things shouldn't exist. I think it's that diversity of voice. It's that diversity of different models and it's that competition between different models that actually eventually drives, both performance and the investors also returns for LPs and for shareholders.

[00:19:39] Susannah de Jager: Peter, you've got a wealth of experience sitting across both founder and VC investing space. Can you explain for those listening and for the purposes of these different groups of investors also, what the distinct phases of company growing are as you see them and what type of investor, but also potentially the name of that investor would be going through those stages? You obviously said your pre seed, you've got angel investors. What's the next one? What's the one after that? And how do you see that cap table evolving?

[00:20:09] Peter Crane: Yes, so kind of the first stage is what I call like a pre-inception round or a precede round. Often this is around, forming the core team. This is maybe about proving out some of the core hypothesis behind the business. This could be entrepreneurs, there's a USVC that actually has this, I think this phrase that, entrepreneurs are risk killers, not risk takers. It was identifying those kind of two or three core risks to your business, normally team and execution risk usually something around where the business is going to be focused so in a tech company you might call this sort of starting to get some level of concept market fit before you get product market fit but identifying that the problem is real or if you're a life sciences company maybe determining your disease area or if you don't have one you're more platform technology or showing some early data if you do. Once you've got that, you're then into a seed round, which is more, we now have the team, we have the right sort of focus, now it's on getting that early data that validates that sort of hypothesis for the company. So this is sort of scales of evidence and whether you're, if you're a software company, if you're a tech company, this is all very much around killing the major risk, which is usually commercial traction, the moat's much smaller. If you're a life sciences company, this is all around technical risk, you're assuming there's no market risk in those companies, although there often now is and if you're a health tech company, it's kind of a bit of the two. So for a seed round, you're often looking at like, how do I kill, sort of that major technical risk, instead of more of a control environment, you might be looking for some level of it kind of external validation. It could be like a pharma partnership or your life sciences company, a platform company. If you're an asset company, it's clearly going to be just purely focused on the science and, running to like the highest level of kind of technical validation, maybe, towards, towards getting into the clinic or, some level of animal data.

So that's called seed and then Series A is really a case of right now we've put the money in, we've kind of got those validations in kind of in a safe environment. Now let's put the capital in and really start like testing out and proving that out in the real world environment. So for Series A in life sciences, that might be you're thinking about initiating a clinical trial for a tech company that's normally around what they call go to market and really showing out that you've got that kind of product go to market fit for your company and for a health tech company that may be more sort of a, getting through the FDA approval process and then, starting to think about launching, maybe have KOL interviews and kind of KOL engagement happening. So the Series A and the Series B is really about more of the same. So it's just high levels of proof, so scaling revenue. If you're a tech company or a deep tech company, or, just scaling through those different scales of clinical proof, if you're a therapeutics company.

[00:22:27] Susannah de Jager: We spoke earlier about the shots on goal and starting companies here. How do you think that the university here could improve those numbers? I mean, on a really basic level, how do we get from 20 to 40?

[00:22:41] Peter Crane: Well, to start, I think if you set the ambition of going from 20 to 40, you're always going to end up with 20. So you have to set the ambition of going for a hundred and then maybe you get 60. Yeah, you aim to fail, right? You add a zero, right? As someone, I think it's a phrase I've also nicked from somewhere in the valley, add a zero to everything, right? How does this materially...?

[00:22:58] Susannah de Jager: I always said you can only assume 10%, which is exactly the same metric, yeah.

[00:23:01] Peter Crane: So you really have to go for it. I think one of the major problems here in Oxford is this kind of mantra of like it's a top down command and control ecosystem versus having lots of voices trying different things. I think if the university wants that to happen, you have to let go a little bit. You have to bring in lots of different people trying to do lots of different things and between the aggregation of all those initiatives, you might get 100, you might get 60, but you get vastly more than you have today. If it's just one organisation, unfortunately, an underfunded TTO, which I think is a very bad thing, trying to do all of this, you're never going to have that result, you're just going to have more of the same. So I think opening it up, more voices. Let's do it like the U.S. where the university is really responsible for patenting, and everything else is just a plethora of different organisations, all competing, all a little bit kind of frenemies, all trying to sort of push this through. I think that sort of ecosystem is what drives that hundred companies per year and actually, I do think there's this like little bit of this obsession here with just like the word spin out. I do think this is broader than spin outs, right? I mean, I don't think this just has to be companies that are based purely on academic IP. I think every discussion in Oxford always ends up just being a kind of a proxy discussion about life sciences, what's far bigger than life sciences? There's a lot of stuff happening around deep tech, a lot of stuff happening in pure technology investing, which Oxford should be having a stake in and all of that stuff helps enrich the other core academic disciplines, whether it's machine learning and bleeding that into different disciplines like life sciences or health tech or deep tech or any of those areas. So I think a more holistic view and then like open it up is what needs to happen.

[00:24:32] Susannah de Jager: Yeah, that makes a lot of sense. And then taking it from the other perspective, if somebody is coming into Oxford and they say, I want to invest, you spoke earlier about speak directly to the academics, speak to these people. Obviously that is there to be done, but it's going to be a slow process and if you are a time poor family office or potential angel investor, my fear is that somebody hearing that's going to go, God, that sounds super laborious. What would be the way to expedite that given your experience or what is it that we as a community need to be building so that we build the temple and they will come?

[00:25:12] Peter Crane: Yeah, it's a big problem and it's a problem that we had on my own spin out as well where I sort of naively thought that being a former VC and done spin outs and startups before and, this would be a fast and quick process when actually took about five months to get out of Oxford. So I think for us having supportive investors was really important for that process. I think there's a couple of things that can be done. So one is go and speak to other CEOs or other founders that have spun out companies recently. I think you'll find there's an incredibly supportive network of people that have all been through the same experience and many of those would be able to provide tips, tricks, sort of precedents that you can use to sort of expedite some level of your negotiation. I think another part of the problem is actually on the investor side. I mean, I think there's a real messaging problem in this ecosystem, which is they've created a message, which is Oxford's hard to work with and it's not good enough just to sort of sit there and keep saying that we're the best, at some point you have to show some humility and say, why are people having these views? And let's try and create playbooks. Let's try and create ways for people to work a little bit more easily with us. Let's be more responsive to the market, and I think that's the... unfortunately there's no easy way here, right? It's on finding inquiries and academics, encouraging them to go out and do this work, and then hoping that you can push it through, and I wish there was a expedited route, but I just don't...

[00:26:30] Susannah de Jager: No, and listen, it's a fair answer and it's a truthful one. It's something we've got in the blurb of Oxford+ actually is dispelling the myths and truths about the Oxford investing landscape and I think that this is a bit both. It's a myth and a truth. It's something that probably gets more airtime than is fair because there's a couple of headliners that maybe have said something negative in the past.

I think that there's also a kernel of truth, as there always is in these things and we as a community need to focus on that, listen to people, maybe reach out to people that haven't invested in the last five years and say, what would you need to see? What was it that made you pull away from the ecosystem and how can we improve?

[00:27:11] Peter Crane: I think the myth that people sort of put out there, I mean, Oxford's always portrayed this as sort of, I mean, depends on which publication you read, but in some ways it's like, the best, in other words, it's the worst, it's the global boogeyman when it comes to spin outs. Actually, once you get through the spin out process and the people you're negotiating with are nice people. I mean, this is not the bad people, this is just, they have rules and procedures and it's like a bureaucratic beast that you're negotiating with. Once you've actually spun out, pretty harmless and actually quite supportive. So I think there's a lot of stuff there that's really positive. It's just let's make the metric that we measure this not by what's the average funding or how many companies come at you. Let's look at the Net Promoter Score of what those founders of that experience they have. Let's focus on a Better founder experience and a faster founder experience and actually let's move this ecosystem from one that's focused on command and control, top down metrics to keep the narrative going and let's focus on like how we improve founder experience, so it's focus on founder service and I think, just a little bit of that mind shift and cultural shift away from, what can we take to, how do we support founders? How do we provide incredible service? I think would go a long way to change and that's not a massively difficult change. It's just a small cultural change that's going to happen. If you can get that in, that mindset and there is some people that already have that within the TTOs. It's just bringing them to the fore and letting them really drive things, which I think is important.

[00:28:24] Susannah de Jager: It would be great to hear a bit more about your experience of founding Caeruleus Genomics, about what you're doing, how you fit into Oxford more generally, and just your experience so far.

[00:28:35] Peter Crane: Yes, so Caeruleus Genomics was founded out of Andor, which is one of the larger medical sciences divisions in Oxford by myself and a team of three incredible academics, two of which have moved into the business with me to really help drive the company. It was based around sort of an annoyance with certain types of genomic methods. So what we call single cell sequencing and long read sequencing. So Nanopore on the long read side, 10x Genomics and others on the single cell side, but it was based on some frustrations with those methods and the frustration was really born out of a need to look at biology in a new way.

So, my academic team, supported by a few others in the Oxford ecosystem, have been spent a couple of years really working out how you could design new omics methods to answer tougher biological questions and initially these questions were in diseases like myeloma, where you need sort of this long read ability to look at sort of large traces of DNA or RNA and so, what was really interesting for us was we have a platform technology, we have a number of patents we're bringing out of Oxford, we have probably one of the best teams globally in this space, but what is this? Where do you apply this? And this is always the challenge for a platform company or a platform technology company is, what is the right business model to pair with that technology that we're sort of, we're developing? And so for us, we actually raised money to answer that question so we spent a bit of time really thinking through like tools, diagnostics, therapeutics and actually, we really felt that we could build a kind of exceptional therapeutics company. We felt that it was an opportunity to build something that identifies and de-risks new biology and for us, that was around RNA. So that's become the company globally that's able to de-risk, identify, and validate new RNA biology so we're now a target discovery company, we're a therapeutics company focusing in areas where we... you know, high unmet needs. So initially, some rare cancers. We've got a proprietary technology stack, and we're half machine learning and half wet labs. So we're kind of what you might call a tech bio company, but I just call ourselves a kind of computer enabled therapeutics company. We're supported by incredible, an incredible SAP board, incredible investors, being very capital efficient. And yeah, it's been going really well and we're going to think about raising more money at some point in the next 12 months. Yeah. So it's...

[00:30:42] Susannah de Jager: How exciting!

[00:30:43] Peter Crane: And yeah, no, it's really good, and look it's tough right? But I think again, to my point around the job of an entrepreneur is to work out which risks to kill in which order, right? For us, we sort of sat down and mapped out all the risks to this company. You know, what are the risks about going down this route? What's the risk about choosing the different models? We felt the diagnostics route was just way too, the reimbursement of those products is just way too unclear, but actually the bigger opportunity really is unlocking a lot of the therapeutic opportunities that we think we can get access to and again, it's nice to see the stories resonating and I think, there's always this sort of thing where, you know, as an entrepreneur, if you're building a company, which I remember when we first started looking at this, everyone was like, long read single cell, that won't work! Why does that matter? It now feels like people are starting to realize that this is a huge market opportunity and I always sort of say to, I say this to founders, right?, if you're building a company where you know, in your first pitch, when you've only got a team and a little bit of IP, everyone's going, yeah, this is great. If you're having a really easy time fundraising, you're probably doing the wrong thing because VCs are lagging indicators, not leading in terms of where they look. And again to my point, VCs are building companies, they're retrospectively building against trends. They're not, it takes founders who are a bit braver, who maybe know the science a lot better to say, right, we're going to build something a bit braver here and let's try and move into a new area, which no one's thought of, which is...

[00:32:00] Susannah de Jager: Yeah, that's an interesting point. You spoke earlier about your academic colleagues and them joining you full time. It's something I've heard, but not experienced directly myself, that it can be quite hard to go part time, that the academic contracts that people are on with universities can be quite restrictive, and therefore the sort of founder entrepreneurial academic balance, it's quite binary. You've got to flip one way or the other. What was your colleague's experience and do you think that's something that could be improved upon?

[00:32:32] Peter Crane: Yes, so one moved full time, one moved part time, one still in the university full time as a consultant for us. , I think the key message here is the academics have power. We have to go through like a large conflict of interest process, which is fine. But I do think there's benefits, right? I mean, I think companies, certainly in the UK funding environment, you can do much braver science at a much larger scale within a company than you can do in an academic environment. I mean in many places you can't pay your postdocs enough now in Oxford to retain them. So if you want to do science that's got a large computational component, if you want to do science that's using like the latest omics technologies, I don't think academia is the right place to be doing them in the UK anymore. Maybe, the Sanger in Cambridge, but apart from that, very hard. And actually for me, it was just then about how we work with the departments to support them and I think this is something that really actually made me very cross in the spin out process was, we'd gone through this whole thing and brought people out of the department or put some people on consultancy, we'd reduced other people's hours and I was kind of expecting kind of, I suppose, naively, like a fanfare from the departments like, well done, like you spun a company out. It wasn't really kind of like that. And actually when you begin to realise why it's, what are they seeing back from this? What do they get from it? They want to have money and capabilities to support research in their departments and I do think there was an issue where a lot of these departments aren't seeing, some of them are getting to see return from SBNLs now, but they're not seeing return on day zero or any level, and for us, we set out with that mentality of like, let's think about how we can soft support here and it helps us as well. So access to equipment, we pay for it in one of the Oxford departments where my co-founders came out of, right, and we pay a commercial rate and it helps fund their core facilities. We try and break grants with departments, which again, help fund some of their people and again bench cost and other capabilities. It's easy to work with University of Oxford if you show you can align to how they think about stuff and you can give them something that helps their focus, which is enabling academic excellence again, my view is always you can't, the academic rights are enshrined, so I don't have the ability to block publications. But my founding team are in the company, so we have a discussion about it, about when we're going to publish stuff that's on the academic side that touches on the work that we've done in the company or touches on some of the IP that we've licensed from Oxford in the company. Again, it's about the relationship.

[00:34:39] Susannah de Jager: Yeah.

[00:34:40] Peter Crane: That'd be much harder, though, if I'd just built a company and my founding team were on an advisory board. We met once a quarter to discuss about what we're doing or once a month. It's not like that on the Slack channel. We talk about stuff every day. It's back and forth, back and forth. It's a much easier discussion. Again, because they're not academic founders. They're founders.

[00:34:53] Susannah de Jager: Yeah.

[00:34:54] Peter Crane: This is really important, they're founders of the company, they're involved in the company, they're not just inception and step back.

[00:35:00] Susannah de Jager: No, it's fascinating, the distinction you're drawing and if I try and articulate it, what I'm hearing is you really need to work as a partnership. It has to be mutually beneficial. You need to understand and you speak about yourself being naive. They're not necessarily going to be 100 percent aligned with your objectives, or isn't it great to have a spin out and that you need to really probably just ask, what can we do for you? How can we make it the quid pro quo work for everyone? Because ultimately it is bureaucratic and these departments have their own goals and targets and...

[00:35:28] Peter Crane: And those goals and targets are very different from the TTO and the university as a whole, and like yeah, that conversation of what, yeah, to your point, what can we do to enable academic excellence within your department, I think is really important.

[00:35:38] Susannah de Jager: That's exceptionally useful to hear from you actually, I haven't heard that so clearly articulated before.

[00:35:43] Peter Crane: And look, this is, we're a small company, right? We're like a million dollars raised in a tiny, you know? Imagine what this place would be like if we had ten top ten pharma companies here with that mentality.

[00:35:55] Susannah de Jager: Yeah.

[00:35:55] Peter Crane: How can we enable academic excellence in chemistry? How can we sponsor 20 PhDs here to do research in that department? Still do publications still do patents, but it's fund... And that's why the positive ecosystem, that's how a rich, robust ecosystem positively affects academic research, is because industry can fund stuff.

[00:36:11] Susannah de Jager: Yeah, absolutely.

[00:36:12] Peter Crane: And can support and that's what the scarcity of the UK in money for academic research, especially brave academic research and industry can fund it. It's just much easier to do that if the industry is in your city.

[00:36:20] Susannah de Jager: I think that's such a positive note to end on actually. Thank you, Peter. I feel like you brought it to a brilliant natural point. It is mutually beneficial, we do want more people here, it will benefit everyone, and I have a favorite saying, which is sort of pie makers versus pie eaters, and the pie makers just want it all to be bigger because it'll benefit everyone, and the pie eaters are worried about their little corner and I think that it's natural for everyone to be worried about their corner, it's human nature, and it's quite frankly true in some cases, but if we can lift everyone into a view where they're looking and they've got to build a mentality, how can we make it bigger to the benefit of everyone? That's what I would love this podcast to slightly encourage. Thank you so much.

Thanks for listening to this episode of Oxford+, presented by me, Susannah de Jager.

If you want to stay up to date with all things Oxford+, please visit our website, oxfordplus.co.uk, and sign up to our newsletter so you never miss an update.

Oxford+ was made in partnership with Mishcon de Reya and is produced and edited by Story Ninety Four.