On December 10, 2019, Joe Faber led a discussion around critical financing, licensing, and transactional challenges facing biotech start-ups as part of LabShares Newton’s “Lunch@LabShares” speaker series.
LabShares Newton is a turnkey, state-of-the-art lab and office space for life-science startups, located in Newton, Massachusetts. Fully permitted and professionally maintained, this innovative program offers a variety of support services and amenities to early-stage research companies at an affordable cost. Initially launching in October 2018, the highly coveted space opened at near capacity before recently expanding to accommodate up to 30 companies.
Among the numerous amenities and resources they provide, LabShares also organizes a monthly Lunch@LabShares speaker series where leading industry professionals lead discussions with the tenants about issues facing entrepreneurs, start-up companies, and the drug development industry. As explained by Jeff Behrens, Co-founder and Chief Executive Officer of LabShares, the series is meant to “provide members with a forum for information exchange and to learn about industry best practices.”
“As a unique law firm focused on providing corporate and transactional counsel to clients in the life sciences, we’re regularly working with pre-venture and venture-backed companies,” said Faber, “and we try hard to provide counsel that embraces the special circumstances of start-ups.” He noted that most of the firm’s lawyers have experience working in these companies, as in-house counsel, business development professionals, and/or as COOs and CEOs, and, now as lawyers in private practice, relish opportunities to sit with entrepreneurs and help them solve problems standing in the way of value creation.
“The tenant companies at LabShares are incredible dynamic, and their founders are finding extraordinary ways to apply biological and chemical science to try to solve unmet medical needs. But many have less experience leading start-up biotech companies through to acquisition or IPO, and many are still particularly resource-constrained and need to be ‘scrappy,’” added Faber. “Our lunch discussion not only allowed me to share general approaches to pursuing transactions that advance their growth, but also to hear what they’re experiencing when seeking financing, access to IP, collaboration, and vendor support.”
Faber’s discussion covered early-stage financing options, including simple loans, government grants, foundation grants, equity and pre-sale equity (i.e., convertible notes). He talked generally about potential dangers involved in early-stage financing, such as securities and tax laws, foreign investment regulations and the importance of structuring financing transaction in ways that maximize alignment between investor interests and founders’ interests. Faber also reviewed common forms of contractual arrangements that start-up companies may pursue to accelerate their scientific and business plans, and the roles and responsibilities of transactional lawyers.
Faber Daeufer & Itrato has been involved with LabShares since its inception, co-sponsoring its first Launch@LabShares Competition that awarded a year of free office and lab space for a life-science startup, and committing to sponsor the 2020 Competition. Faber added, “we are very excited about the community that Jeff and his team have created at LabShares, and being involved in the conversations and work that are happening there.”