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GreenlightBiosciencesPresentationfromAndrew.pptxAndrew Ramirez
Overview
Zarur and Cobb
Greenlight Bioscience
Vision
Impact investment
Four tenets of impact investing
First problem
SWOT
Choices
Recommendation
conclusion
Andrey J. Zarur Ph.D. CO-FOUNDER, PRESIDENT, & CEO
Born and raised in Mexico
Gained his Ph. D. at MIT
started his second company in 2002 BioProcessors Inc.
Became the managing director of Kodiak Ventures life sciences investment portfolio for 10 years
Founded Greenlight Biosciences in 2009 but wouldn’t leave Kodiak until 2012
Carole Cobb CHIEF OPERATING OFFICER
Carole Cobb has a masters in business administration in finance
She also has B.S. degrees chemical engineering, biochemistry and cell and molecular biology
Was the SVP of global supply at Genencor international and continued when acquired by Danisco
Joined Greenlight Biosciences in 2015 even though she meant to retire a few months earlier
Greenlight Biosciences
Founded in 2009
The concept was to take the “life” component out of cells but maintain the mechanics of the cell.
Over the initial 5 – 6 years and $24 dollars later the company would refine a process to develop “zombie cells”
The platform was complete but there was no application
Syngenta approached greenlight and wanted to use the platform to produce RNAi for agricultural use
As of 2016 Greenlight had proof of concept for the agricultural RNAi project and would need 1.5 – 2 years to finalize the process and another round of financing
Zarur’s Vision
Due to the utility of RNAi and Greenlights ability to produce the RNAi at a significantly lower cost than normal Zarur wanted to use the technology for life changing applications
After talking to a Princess Mabel Van Orenje, Zarur was convinced to try and use the technology to address malaria
On top of attempting to address malaria Zarur wanted to use the Technology for pesticide purposes in order to improve global food security
Impact investment
Mabel Van Orenje introduced impact investment to Zarur, a relatively new investment type that may allow Greenlight to acquire funding without sacrificing Zarur’s Vision
Impact investing constitutes investments that are intended to make positive and measurable social and environmental impact along with financial returns (GIIN, 2021)
Estimated to have over $110 Billion in assets under management in 2016 over double from the previous year
https://knowledge.insead.edu/strategy/maximising-outcomes-in-impact-investing-13636
Four tenets of impact investing
Intentionality – the investors intention must be to have a positive social or environmental impact
Investment return – the investment is expected to make a return on capital or at the very least a return of capital
Range of return expectations and asset classes – return expectations could be below market, risk adjusted market rates and could be across market classes
Impact Measurement – reporting of investments, financial as well as social and environmental performance, to show a measurable impact
Initial Problem
Projections showed that Greenlight would run out of financing in six months
Zarur wanted to utilize the technology to combat malaria and other pests that plague rural farms
If Zarur and Cobb wen the traditional VC investor route they knew they would not be able to pursue the malaria/pest issue
Impact investing showed promise as an opportunity for Zarur and Cobb to gain financing and still go after this vision
SWOT
Strengths
Proof of concept for the RNAi pesticide
Significantly lower production cost
Strong leadership under Cobb and Zarur
Innovative proprietary platform of zombie cells
High impact vision (now)
weakness
Reluctance of board to seek impact investment
Constantly changing vision (early on)
Early-stage company
Currently not profitable
No fully developed product
Opportunities
Venture Capital Investments
Cobb and Zarur have plenty of experience dealing with VC investors
Would set Greenlight on a more profitable path
Larger amounts of funds available to solicit to
Impact investments
Could provide investments without affecting the overall vision of Zarur
Impacts the world while still allowing for financial return
A lot of opportunities available through the Princes Mabel Van Orenje
Pursuing impact investment
Zarur and Cobb were connected to many potential impact investors through the Mabel Van Orenje
Met wit the Innovative Vector Control Consortium and developed a very comprehensive outline of Greenlight and their capabilities
Zarur and Cobb met with two major Foundations that dealt with impact investments
Foundation “A” showed interest in Greenlights capabilities but overall did not feel that the company was far enough along to invest into. “too much risk and in a vision stage”
Foundation “B” agricultural investment head had little to no background in agriculture and said they only invest in “tried and true” methods (not really impact investing in my opinion) so she rejected them
After four months of searching for funds via impact investments Zarur and Cobb had nothing
Threat
After four months Cobb and Zarur have nothing to show for their efforts and only have two months left to secure funds
Cobb and Zarur risk losing the company to Agilent if they can't secure funding in time
VC investments would most likely push Zarur’s vision to the wayside in favor of more profitable applications
The Big Problem
Greenlight is running out of money
They have been rejected by two major foundations but on the other side of the coin they have gained even more connections through the foundations
After four months of trying to get funding through impact investing, they still have nothing
Choices – What funding should they pursue now?
Impact investment
Continue pursuing impact investments over the next two months
Haven't received any funding so far
Have made many network connections and had a lot of support
Venture Capital Investment
Cobb and Zarur have a lot of experience in this arena
Would set the company on a profit driven path (initially)
Zarur’s Vision would be pushed back significantly
Impact investing route
Low chance of success based on the previous four months
Greenlight holds to much risk and not enough maturity as well as not having an actual product for impact investors to want to throw their hat in
Run the risk of not making raising enough capital and this could end in Agilent acquiring Greenlight
If it works out though Zarur will be able to carry out his vision of malaria eradication
Venture Capital Route
Cobb and Zarur have a lot of experience with VC investors and have an extensive network to tap into
VC investors are willing to accept more risk if the reward is large enough
This would point Greenlight toward less impactful but more profitable targets
More than 80% of venture capital investments goes into adolescent stage companies according to the Harvard Business review
Zarur would not be able to combat malaria for a long time
Recommendation
Venture Capital route
The success chance of securing financing in this route for Zarur and Cobb is pretty good
It would allow for Greenlight to continue and become profitable
They would have the Support of the Board and management
Does not completely eliminate the possibility of Zarur eventually being able to combat malaria
Would help focus the company on a goal (the most profitable pest)
Conclusion
Greenlight Biosciences developed an innovative “Zombie Cell” platform to create biological products cheaper
Zarur’s Vision was to use the platform to create RNAi products to combat malaria
The company was running out of money so Zarur and Cobb needed to secure funds they tried to get impact investments
Failing to receive any funds via impact investments Zarur and Cobb had to make a choice on whether to continue their path or return to VC investors for funds
I recommend returning to VC investors to keep the company going and to pursue the malaria products later
References
GIIN. (2021). WHAT YOU NEED TO KNOW ABOUT IMPACT INVESTING. Retrieved from Global Impact Investing Network: https://thegiin.org/impact-investing/need-to-know/
Greenlight Biosciences. (2021). About Us`. Retrieved from Greenlight Biosciences: https://www.greenlightbiosciences.com/about-us/
Greenlight Biosciences. (2021). Andrey J. Zarur, Ph.D. Retrieved from Greenlight Biosciences: https://www.greenlightbiosciences.com/team/andrey-j-zarur/
Marshall, M. P. (2020, June 11). 15 MINUTES WITH… ANDREY ZARUR OF GREENLIGHT BIOSCIENCES. Retrieved from Global AgInvesting: https://www.globalaginvesting.com/15-minutes-andrey-zarur-greenlight-biosciences/
Michael Chu, A. L. (2018). Greenlight BioSciences: in search of Impact Investment. Harvard: Harvard Business School.
Singh, J. (2020, March 26). Maximising Outcomes in impact investing. Retrieved from Insead knowledge: https://knowledge.insead.edu/strategy/maximising-outcomes-in-impact-investing-13636
Synbiobeta. (2021). Carole Cobb. Retrieved from Synbiobeta: https://2018.synbiobeta.com/carole-cobb/
Zider, B. (1998, November). How Venture Capital Works. Retrieved from Harvard Business Review: https://hbr.org/1998/11/how-venture-capital-works
