Educational guide
Executives-for-hire help biotech startups get off the ground
Kendall Squared brings you dispatches from the world’s epicenter for biotechnology and drug discovery. In a sun-filled conference room in Cambridge, Mass., on a recent day, Dr. Rosemary Mazanet held court at a meeting with the new drug team of the immunotherap
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Kendall Squared brings you dispatches from the world’s epicenter for biotechnology and drug discovery. In a sun-filled conference room in Cambridge, Mass., on a recent day, Dr. Rosemary Mazanet held court at a meeting with the new drug team of the immunotherapy company Enumeral. In quick succession, the scientists updated her with reports ranging from their tissue sample supply to where animal studies stood. “Will they tell us in real time how the mice are doing?” she asked, moving through agenda items matter-of-factly and jotting notes on a packet of pages in front of her. Indeed, Enumeral would be getting live responses. “That’s excellent,” Mazanet replied. Soon after the meeting, Mazanet switched gears: She jumped on a call with a California-based company focused on cancer vaccines. Then, that afternoon, she ran a meeting with a biotechnology company looking at gene control, advising it on its research and clinical development plans. A direct employee of none of those companies, Mazanet instead is an executive-for-hire. Other biotech veterans have gone the same route, serving as a C-level executive for a few months at a time or on a part-time basis, often for several startups at once. “They need someone who’s experienced, but they can’t really afford it,” Mazanet said. “And people who are very experienced usually don’t want to just do one thing.” In other words, “You don’t hire a CMO, you hire half of a CMO, or a third of a CMO,” Mazanet said, referring to chief medical officers. Mazanet, who has been doing this work for about four years, juggles between multiple email accounts and various stacks of business cards with ease. She prefers not to take formal titles with the companies she works with, but others accumulate titles of chief financial officer, chief operating officer, and even CEO, packing their LinkedIn profiles with an array of corner-office positions that in this case are more often performed from home offices. It’s not clear how many people do this type of rent-an-executive work in the biotech world, but interviews with more than a dozen executives, companies, and observers show it is becoming more common, and more accepted. The trend reflects shifts in the pharmaceutical and biotechnology industries and possibly the larger labor force. Corporate behemoths no longer dominate drug discovery, instead depending on smaller companies for innovative ideas. That has propelled the rise of “virtual” startups , those with one or two key employees who plug the gaps with contractors and consultants. And across industries, more workers are forgoing long-term employment and setting out on their own. “It’s not like when your grandfather worked for IBM for 30 years,” said Matt Marx, a professor at the MIT Sloan School of Management. “You’re more loyal to your craft than your company.” Partners from venture capital firms have for years taken on positions at companies their firms help start. But the newer fleet of interim and part-time executives tend to be free agents. Executives and companies say the arrangement amounts to a win-win. For startup companies looking to pinch pennies or being started by scientists without business experience, they can access people with decades of expertise and pay them just for the work that needs to get done “To be capital-efficient, we don’t have to hire these people full time, we don’t have to put them on our payroll,” said Sena Biswas, a managing director at VIMAC Ventures who tapped Mazanet to work with a Montreal-based company, Angiochem, in which VIMAC invested. As a company grows, it can then bring on full-time executives, often looking first to those who filled the interim role. “Many startup companies, they may not need a CFO from day one,” said John Hallinan, chief business officer of the Massachusetts Biotechnology Council. The part-time execs say there are various perks of their peculiar kind of work. It gives them the chance to work in the buzzing world of startups without subjecting them to the slog of getting one off the ground or the risk of failure. “With what I do, there’s never a dull moment,” said Ramani Varanasi, who consults and is chief business officer at two companies. Although they are like consultants, the part-time executives say the work differs because they enact plans, not just offer guidance. “I don’t just sit on the sidelines and watch as someone drags their feet,” said Arthur Hiller, who serves as interim CEO of a new company called Antyllus Therapeutics and does traditional consulting. “I can actually drive it forward.” Recognizing the opportunity, traditional consulting firms have started staffing C-suite roles for clients. Red Sky Partners, a Cambridge company that started almost a decade ago, has focused more on providing what it calls “virtual operating management” in recent years, said Pauline Jen Ryan, a partner there. And Danforth Advisors, based in Southborough, Mass., was launched four years ago specifically to fill interim executive positions at startup companies. Bouncing between roles does, of course, pose some challenges. A part-time exec indisposed with pitching to investors for one company won’t be on hand to respond to a PR crisis at a second company. Potential conflicts of interest and questions about proprietary information loom. The executives say they sign nondisclosure agreements and won’t take on jobs at competing companies. The model can also lead to some funny circumstances. Mazanet once had a meeting with the Food and Drug Administration on behalf of one company, and had another meeting with the FDA not long after. The FDA officials recognized her, but this time she was representing a different company.