STAFF MEMO To: From: Date: Subject:
i-GATE Development Corporation Board of Directors Brandon Cardwell April 9th, 2018 Switch Labs Biotech Program
Since its founding, i-GATE’s focus has been on identifying and reducing barriers to bringing new innovations to market. As a non-profit organization with a mission to support entrepreneurship in the Tri-Valley, i-GATE has a unique opportunity to focus on areas of need that the market is not addressing. Currently, one such barrier is the lack of affordable, scalable facilities appropriate for early-stage biotech startups. With industrial vacancy rates at record lows in the Tri-Valley, early stage startups face an uphill battle in their search for small amounts of affordable space where they can attempt to demonstrate the viability of their technologies. These companies often need less than 1,000 square feet of space with flexible lease terms, which are virtually impossible to obtain anywhere in the Tri-Valley. The dearth of flexible lab space combined with the need for expensive, specialized equipment often leaves Tri-Valley biotech entrepreneurs in the unenviable position of either taking substantial personal financial risk to secure necessary facilities, driving west to Berkeley or San Francisco where bio incubator space is more accessible, or simply abandoning their idea. These bleak options present an opportunity for i-GATE to expand its impact in the Tri-Valley by offering flexible lab space that significantly lowers the barrier to entry for new biotech startups to test and demonstrate technologies. i-GATE’s incubator, The Switch, includes a 9,000 square foot industrial basement space, which we have dubbed “Switch Labs.” This facility is already dedicated to serving “hard tech” entrepreneurs, including those spinning out from the national labs. The addition of a specialized biotech component provides a clear value proposition for a segment of the Tri-Valley startup community that is becoming increasingly important to the region. Biotech companies in the Tri-Valley have raised over $400 million in the past five years, with notable venture firms including Venrock, NEA, and 5am Ventures leading major rounds in local startups. While i-GATE has supported bio companies in the past (POC Medical Systems), the organization has avoided establishing a dedicated program for the industry primarily due to a lack of in-house expertise in setting up and operating a successful shared lab. So, why now? We were recently approached by an experienced biotech entrepreneur who was looking for a shared lab to start his next venture. He was strongly considering Bonneville Labs in Berkeley, but he did not want to endure the commute or pay the high rate ($5/foot). The entrepreneur offered to help i-GATE develop a shared lab concept and buy approximately $10,000 of equipment in exchange for rent forgiveness until the equipment is paid off. Under this arrangement, the rent-for-equipment exchange will be complete in November of 2018, but we can start monetizing the equipment to other biotech startups immediately. Safety Primary among the considerations in establishing a biotech program is the safety of our member companies, staff, and the community at large. With this in mind, we have been gathering information