How to Finance Your Life Sciences Company Through the Valley of Death

Greg Ammon: Welcome to Witham Sounding Board, a podcast sharing powerful business tips, insights and trends for those seeking to become a rock star in their industry.

Kati Thomas: Hello and welcome back to witham's C Suite podcast series. I'm your host Kati Thomas. I am part of Withems outsourced accounting and fractional CFO service line. We support the offices of controllers and CFOs. If you'd like to know more about what we do and how we support our clients, please go to witham.com Oasis and that's spelled O A S Y S. I have the utmost pleasure of welcoming Greg Ammon today as uh, a guest on our podcast. Greg is a serial entrepreneur touched tech medical device biotech companies. He has uh, started six companies from scratch and sold four and the last company in Paramed was one of his first bootstrap company. He is currently a lecturer at Harvard Medical School and he lectures innovation and entrepreneurship. The goal of our podcast today is going to talk about playbook for getting funded and scaling through the artist stage of life science. Greg, welcome. How are you?

Greg Ammon: I'm doing great Cuddy, thanks for having me.

Kati Thomas: Happy to be here, of course. Is there anything that I'm missing?

Greg Ammon: Not really. I'm a pretty uh, eclectic guy. I've got I think 13 part time jobs. I think I need another full time job. I also done some lecturing at the Harvard Business School. I spend more of my time mentoring biotechs. So I take on five biotechs a year through different organizations. MassBio, MassChallenge, Nucleate, the American Cancer Society, Bright Age Program and Harvard Ilab. And I've been doing that since 2010. So I've seen a fairly large number of biotech companies in the startup ecosystem that I've tried to help as best I can. I'm also an active angel investor with Mass Medical Angels. We're the only angel group that's dedicated to healthcare in the northeast. And last year 60% of our deals were pre clinical biotech which is rare. So we have uh, a very large deal flow of uh, biotech companies and medical device companies. And I sit on the therapeutic screening committee and try to do the best I can to sort out the winners from the losers. And we as a collective group are pretty active. We do about 16 investments a year. Those are sorts of things I'm working on. Plus I'm working on starting a couple companies as well. So we'll see what happens.

Kati Thomas: Very good, very good. And then just to emphasize on that you've done multi stage, multi entities throughout this time as you specifically mentioned. So what are the main inflection point? Right, the most uh, repeatable drivers of scale, the things that consistently move you from early traction to real growth?

Greg Ammon: Yeah, that's a great question. So the early stage biotechs I mentor have a completely different set of inflection points and milestones than for example the customers we served when I was running in Pyramid, before we sold it, Pyramid supported late stage pharma companies and biotech companies, late stage assets, I should say, within pharma and biotech companies. So we did a lot of phase three and phase four trials and it, it was, it was fascinating to me as an early stage guy to get that sort of experience on how late stage clinical assets are, go through the clinical trial process, how you de risk the clinical trial process and the registration and post market support for, for drugs, uh, that go through expedited review and a variety of other things. So I think I've seen a lot of different stages in companies and I guess I would summarize the framework as early stage companies are really all about IP inflection points. So looking for ways to create IP that's meaningful. So not just having journal publications, but also having claims in the patents that actually map well to the unmet needs in the market and the clinical challenges that providers are facing. So when I was eir at ah, Mass General Brigham, back then it was called Partners, I worked on a few hundred academic research projects and very few, even at such a prestigious institution as Mass General Brigham, actually had uh, scientific claims that mapped well to the top needs of the providers and caregivers in the field, whether it be the doctors or the patients or the payers. So if you look at those stakeholders and look at what their uh, requirements are, only about 1 or 2% of the academic research actually maps well to those sorts of requirements. And that's because what success in a scientific publication, in a journal article is very different than success in a venture that's going to solve real problems for patients. So, so, so there you're looking at meaningful IP that creates a strong barrier to competitive entry. And within intellectual property, you know, it's much better to have a composition, a matter patent than a formulation patent, which is better than a method of use patent. So the quality of the patent, the stage of the patent and how well it maps to the real world market needs for the target indications you're pursuing is the primary inflection point when you're applying for an sbir, when you're raising your seed round of Venture capital. The venture capitalists are primarily driven by IP inflection points. They look at the science first, but then they do a lot of work vetting out the, the market factors as you move farther on. When I was in the tech business way back in the 90s, the investors, you know, M.O. those companies barely had IP. The IP was, was rarely patents. It was more frequently, you know, first, first mover advantage or a alliance or partnership with big OEM or a big customer that was, would give you some sort of barrier to competitive entry or differentiation. So there the investors are looking for revenue inflection points. So with later stage VCs or in the biotech market, the growth stage VCs or the growth equity VCs they're looking for revenue potential and revenue inflection. How is this company going to de risk? De risk their phase three, get to market and quickly get adoption from customers and grow the revenue base. And if it's a revenue stage or clinical asset already in production, then it's what's the business model, what's the reimbursement and how quickly can this company grow? So the growth equity investors are looking for revenue as a milestone for, for, for growth and inflection. And then when you get to private equity, you know, they're looking at margins and operating history and productivity and they're looking for a way, they're looking, in my opinion, for profit or margin or ebitda, uh, inflection points. So they're looking for ways to create more margin from the revenue that's coming in. Yes, how to grow the revenue, how to build the bigger business, but also how to generate more margin off of it. So the private equity guys are all focused on EBITDA and growth of EBITDA and margin. So that's the way I look at it. I look at it as IP inflection first, revenue inflection second and margin inflection third. And there's a different class of investors for each. In the IP inflection category, those are the early stage seed stage VCs. In the revenue inflection category, you've got the growth equity VCs. And once you get to, you know, uh, you have operating history and margin deflection, that's when you're talking about private equity.

Kati Thomas: Yeah. And, and is there a difference though when you factor in the type of companies a uh, biotech or life science company as compared to all tech company?

Greg Ammon: Oh, absolutely.

Kati Thomas: Which one, which, which metrics the uh, private equity or VC would sort of focus on?

Greg Ammon: Right, right. So there's two different dimensions. There's the investor dimension, along the lines that I just talked about, but then there's the industry segmentation, which is completely orthogonal and independent and has a different set of characteristics. So I'm not, I haven't been in tech for, you know, over 20 years. I did tech in the 90s, medical devices in the 2000s, and I've been doing biotech ever since 2010. So some of my information on devices and tech companies may be D. But, you know, in the tech industry, it was all about revenue growth and how quickly can you own the market. And that makes sense because you're, you get to market fast and you don't really have the defensible barriers to competitive entry through ip. You have it more through your contracts and your partnerships. So it makes sense that the quicker you can get traction there, the more you're going to be growing and the higher your valuation when you look at medical device. So let me take biotech next then, because medical device, in my opinion, is sort of a hybrid.

Kati Thomas: Okay.

Greg Ammon: If you look at, if you look at biotech, it's all about the intellectual property and the science. It's all about the target, the novelty of the target, the degree to which people think the target is going to be viable in terms of, by, by inhibiting it or, or activating it, curing disease. And it's about the mechanism of action and the drug and the IP that protects the drug. So there, there's a heavy diligence on the intellectual property and on the chemical compound and how it works and what it's targeting. And then looking at those markets and seeing what the level of interest by big pharma is in those markets. You know, there are certain areas that are hot right now, ophthalmology, inflammatory, autoimmune. And there are certain areas where it's much more of a struggle, like neurodegenerative disease because of prior failures and because the animal models aren't as predictive in the clinic as other therapeutic areas. So for all those reasons, pharma is not as heavily into it and therefore the VCs don't chase it because they know the exits are less likely to be there. So in biotech, I think you're looking for IP science, acceptance of the science, and which spaces are, is the pharma industry pursuing. And you got to kind of think ahead. You don't aim for the puck, you aim for where it's going to be. But you know, where we think the pharma industry will be moving where they're going to create their sales channels because they want to leverage those sales channels through synergy by acquiring other assets. Those are sort of the metrics you'll look at in biotech. So in device, it's sort of a hybrid with device you do have IP as a big consideration because there is, there is a mechanism of action and there is a target and it is heavily science oriented. However, you are talking about a machine or a product, a material tangible good that has a real cost of goods, which you don't have it uh, nearly as much in biotech. And so there's more concern about margin and some of the things that relate back to technology. I mean it is technology, it's just hardware instead of software, but it obviously will have a software component these days. So there you're looking at things like you're looking at still are, uh, the device companies interested in the space. So you're looking at whether the big device companies, Medtronic, Boston Scientific, et cetera, are investing in the category and in the application. But you're also looking at, you know, what is the cost of the, of, of the device going to be, how profitable is it going to be, how easy is it going to be to, to get adoption? How easy? What is the sales cycle? There's a lot of emphasis in medical device on the sales cycle as there was in tech. There's very little emphasis on the sales cycle in, in biotech. I mean there's some, but it's, it's not nearly as significant because it's not as onerous and you're not, and you're not shipping the same thing. So I think medical device is a little bit more of a hybrid. But I would say the metrics to answer your question are 1. IP is still a critical consideration, but to how are you going to get adoption? How quickly can you scale the revenue? Typically the regulatory path is much shorter. So if it's a 510k, there's very little clinical trial that's needed, you know, maybe some, some sort of small study to satisfy that you're equivalent to the predicate device or that you're safe if there's some novelty to it. Even if you have to go through the clinical trial process, it's just the safety study and a pivotal study and it's nothing in terms of expense or duration as the three, three or four phases you have to go through with a drug. So you're going to get to market quicker. And therefore what the revenue outlook is for a medical device company is Much more important because revenue is going to be closer to, went to the investment than in biotech where revenue is so far away.

Kati Thomas: Yeah, so far.

Greg Ammon: Except for licensing.

Kati Thomas: Very good.

Greg Ammon: So, uh, those are the metrics I think we look at.

Kati Thomas: Let me ask you from a leader's perspective, so how should they balance Runway versus dilution versus momentum? Obviously you're going to ask for, you're going to go out and raise funds and what, what happens with that is you're going to be diluted in some, some form. Even if you, you raise a convertible debt or a safe, you know, eventually it's going to be converted to equity and that's going to create some dilution. From a leader's perspective, how do they balance that? You know, Runway dilution, momentum, when they are trying to grow through what we call a value of death.

Greg Ammon: Yeah, so, so when you say leader you mean like the co founder, Perspective and manager.

Kati Thomas: Founders and management.

Greg Ammon: Right, right. So, so I look at financing as the dilution is going to be between 20 and 50% per round of financing and you're going to do three or four rounds of financing. Typically it's about a third. So it can't, it's unlikely it's going to be less than 20% because if you have new, and assuming in each round of investment you have new investors coming in, it's unlikely to be less than 20% because that's not enough to move the needle for the investor unless it's just some, you know, crazy big thing like Anthropic or you know, SpaceX. But you know, for the normal companies the investor is going to want at least 20%, uh, as a syndicate in order to move the needle. And it's unlikely you're going to give away More than 50% of your company in any given round. So that's why I think there's sort of constraints on either end, 20 to 50. And I find the average is about a third. So if you're going to, if you're going to have a third dilution for each round of financing and you have three rounds of financing, that's what, two thirds times two thirds times two thirds, which is two, four, eight ninths. So you know, basically you're talking about having 10% of the, the, your, whatever share you had at the beginning, you're going to have basically 10% of that left at the end. You're going to have, you're going to suffer quite a bit of dilution. So there has to be a real need. And the need is, do you need the money to grow and achieve the objectives to build a big company. So if, if there's no growth, if there's no big market opportunity, then I wouldn't raise venture capital. So in of the six companies I built, three of them were VC backed and three of them weren't. Four of them were had exits and two of them failed. So of the four that had exits, so of the three that weren't VC backed, one was bootstrapped and the other two were incubated as part of an incubator. Well, one of the, the other two was incubated. The other one I just never started because I just didn't think it was going to be viable. Sort of didn't pass my due diligence. I had the team together, I actually had a term sheet from a venture venture capital fund but at the end of the day I decided not to go forward with it. So. So my bootstrap company, which was Impyramid, which was decentralized clinical trials, when I started that company in 2011 I did not think it was VC fundable because I did not think we were going to be able to grow rapidly. Our sales cycles were basically CRO sales cycles. What we were doing is trying to generate data to empower patients to make more informed healthcare decisions. But as we started working with the market and understanding where the unmet needs were, what we learned was the big opportunity was to create a patient self reported data capture system for purposes of doing long term follow up studies that are FDA mandated for drugs that get expedited approval. So these post market drug studies are very long and that's where we saw a niche. So that's what we pursued. We closed a bunch of um, them. We did other studies for reimbursement and her purposes post market and then we moved into phase three registration trials. So that was the business. But, but even though we had a tech enabled platform and we were completely automating and clinical trials and disrupting the CROs, we still had a CRO like sales cycle which is slow and ugly and as a result I just didn't think it would grow that fast. So I never raised any capital. So we bootstrapped. The good news about that, you know, so we had slow growth but we are profitable.

Kati Thomas: Right.

Greg Ammon: And it was a well run company and when I sold it then there was a good return for, for, for most people because there was no invested capital in the company so we didn't have to worry about liquidation preferences or any of those things. So that's why I Didn't raise capital. Now what happened where I, I called that wrong was around 2015 and 16. I didn't account for the fact that Silicon Valley is not at all, you, uh, know, is willing to take on a huge amount of risk. And similar companies to ours went to the Silicon Valley VCs and raised a whole bunch of money. And those companies were very successful. During COVID when there was, there was a high degree of adoption for sightless clinical trials. But those companies have for the most part failed. And I mean you can look at Science 37 as example. Their SPAC was three and a half billion dollars and they sold for 50 or 60 million dollars. So that's like a perfect example. So that's what happens when you raise capital in a. Um, that's an actual great case study on why you don't want to raise capital in a business that fundamentally doesn't have a lot of growth. And I would submit all of these clinical trials applications don't have a lot of growth because, because they have these CRO like sales cycles. The data service companies are different. There are niches within clinical trials that I think have great opportunity and have high growth. But if you're just automating clinical trials and doing the clinical trials like a lot of these other companies do, the growth isn't there. And I don't think you should raise capital. If, on the other hand, you see a big market opportunity and you've done your due diligence and you've got customers who want to buy and you know, you just have to build it to penetrate the market, or you have pharma licensing partners who are very interested in licensing and you've sort of validated. There's enough of them that you can get deals done if only you can get through the human proof of concept or get through even the IND enabling studies or whatever, whatever stage you're at, then you want to raise the capital to grow fast, to execute fast and to seize the opportunity.

Kati Thomas: Yeah.

Greg Ammon: So I think it's all about what is the opportunity and how quickly is it coming and what is the opportunity cost of not having capital and not pursuing it and then having a very clear use of proceeds that explain exactly how you're going to use the capital in order to achieve those objectives and, and, and have that growth.

Kati Thomas: Yeah, thank you. That's, that's, that's, this is a good point. I'm uh, just going to add to that. Is this mainly because it was more process optimization from a CIO perspective in terms of clinical trials rather than having an actual product.

Greg Ammon: Well, the fact that. So the CRO sales cycle is very slow because it's very complicated and requires, uh, a whole bunch of approvals. There's a study, um, protocol that could take months to develop and get approved by all the different groups within the sponsoring pharmaceutical company, like the compliance department, medical affairs department, pharmacovigilance, etc. So it's just a lot. I mean, we don't have time to get into why the CRO sales cycle is so long and arduous, but it is. And, and unfortunately technology hasn't changed that. And I don't think we'll change that. It'll only change when the FDA changes, which may happen, but at the moment is not. In any event, you know, I think, I think the biotech industry has other challenges. So on the late stage, yes, doing clinical trials efficiently is like the number one. Well, the number two thing. The number one thing is patient recruitment. So the biggest challenge in late stage clinical trials is recruiting the right patients and recruiting them rapidly. And that's why you see so many companies going to foreign countries to do clinical trials, because it's much easier and quicker and in some cases the FDA will accept the data. The problem on the early stage side of the equation is the biotech valley of death. And that's something we've been living with since 2021. So you know, we went through this massive growth phase of um, investment in biotech from when the first biotech company was formed in 1976 to about 2021. I mean, it was a long ride of heavy investment and growth within the biotech industry. The challenge was so much money was spent on these companies that you have a lot of clinical stage asset companies still in business who haven't exited and have too much money to go bankrupt, but don't have the traction to go public or to be acquired for a variety of reasons. So because you have all these clinical stage companies, the pre clinical companies, which is the types of companies I work with, are having a really hard time and have since 2021 had a really hard, are having a really hard time raising capital. Because if you're an investor, a lot of these clinical stage companies are doing down rounds and are raising for a lot less than they expected. Their valuations are much lower. So let's just say a clinical stage asset is 50% more than what a, uh, traditional pre clinical company is looking for when they're raising venture capital. But if you look at the risk profile, the risk of failure from when You've identified a drug candidate to human proof of concept is double the risk of failure from human proof of concept to drug approval. So I actually have the statistics, it's in a couple of my decks that I do over at Harvard. But the, the interesting thing is it's something like 88% of all the drug candidates fail between when they're identified to the phase 2 clinical trial, which is the human proof concept usually. And about 46% fail from phase two human proof of concept to drug approval. So if you're an investor and you're a rational investor, why would you invest in a preclinical company? Assuming everything else is similar, why would you invest in a preclinical company with twice the risk, whereas you have another company with half the risk and only 50% more than valuation. So for 50% more cost, 50% more price, you can cut the risk in half. So you know, the numbers could be all over the place. But that's just an illustration of why we are in the state we're in with this biotech valley of death and why so few early stage preclinical companies can raise financing. So the, well the, the good news is it's just a matter of time before all these clinical stage assets go away. They're eventually either going to go public, get acquired or go bankrupt. The money can only last so long and we're living in the overhang of the excesses up until 2021. But eventually that's going to peter out and once it does now the investors have nowhere else to go. If you're a uh, company that invests in private companies and you have a charter to do pre revenue, you're not a private equity company, you're a venture capital fund that's focused on, on assets that are clinical or pre, clinical, but pre revenue, if all the clinical stage assets are gone, the only place left to go is preclinical and the VCs still have a lot of money. So I think there will be a, ah, renaissance in investment in preclinical biotech. But I don't know when that is because it's a matter of how long it's going to take to get rid of all the clinical stage assets. And I, I don't know if it's two years, five years or 10 years. I think if I had to guess it's between two and five years, but I have no idea and nobody knows and hopefully it'll be sooner than that.

Kati Thomas: I'd love to, I'd love for it to be between 2 to 5.

Greg Ammon: Yep. I hope it, um, I hope it's this year. I'm, I, I want 20, 26, but yeah, we'll see what happens.

Kati Thomas: Oh yeah, yeah, we'll see. That's good. So let's talk about scaling a company. There's a couple questions here for you. In a private life science company is trying to scale. So what functions must be owned internally, outsourced. That's one. And then two, when is the right time for fractional leadership? It could be fractional cfo, fractional CRO, fractional ctl, you know, and what, what's, what's the risk of waiting too long? We, we all see that many, many times. Like, okay, well, we have to wait maybe, maybe not now, maybe next year. But what are the risk? You know, it's uh, it's a balance in earth. Right. Skill to, to, to when to bring them, um, on and when to not bring them on.

Greg Ammon: Yeah. So, you know, fractional leadership is, is a variant of outsourcing. So I think the question is, when do you insource? When do you outsource? And if you basically think of hiring a full time employee as a human resource insourcing and hiring fractional or contractors or consultants as outsourcing, then we could put both of your questions into one, which is outsource versus insource. I've gone through this so many times and it's a cost benefit analysis and it's highly dependent the circumstances and the situation. But you can, you can create general rules, right? Uh, or you can, you can infer things that tend to be, tend to cut across all the different examples. So I, I think the first thing is the more strategic it is, the more it creates competitive barrier of entry, the more likely you would insource. And second, the more on the flip side, the more commodity it is, the more concentration of suppliers there are that's bringing down the cost so that you could do it more cheaply by outsourcing it, the more likely to outsource. So if we then look at specific examples. So when you're doing a, uh, clinical trial, I don't know anyone that insources that. Everybody outsources that to the CROs. That's part of the problem. The CROs are quite frankly fat, dumb and happy. And that's where I think there's opportunity for disruption and why there was such active investment in decentralized clinical trials in the 2010s, but unfortunately it didn't materialize because it's a hard intractable problem to Solve. And in the defense of the CROs, there's actually a lot of, there's a lot of domain expertise that they offer that can't be replicated by a tech company or brought in house. So I think there's real value there. But that's one example of outsourcing. You know, manufacturing is difficult early on. You definitely want to outsource. I mean when you're a young company and you have limited cash or no cash, I think you outsource everything and that's one of the general assumptions you could draw. And as you, as you get bigger and, and grow, you start to insource more and more. So a general rule of thumb is the, the, the smaller you are, the more you outsource, the larger you are, the more you insource. I, I have, you know, I mean I'm mentoring four biotechs right now and you know, one of them only has one employee and the other three, I would say 90% of what they do is outsourced. So in drug discovery you can outsource to the academic labs, you could do responsive research agreements. A lot of biotech companies are started based on research that's done in the lab and then an IP license is executed and it's brought out. That's all outsourcing. So I think, you know, most of the preclinical biotech industry is outsourced, I would say most of it. But then as you get bigger, you know, you're not going to, you're not going to subcontract the plant and the, the, all of the, all of those related services to a cdmo. You know, eventually you're gonna, as you grow and as you get more capital and as you get to GMP and production grade product, you're going to slowly start to insource that more and more until, until you, until you're, you're approved. I think it's similar with labor. So I think, you know, if I think back to my companies, the people that were inside were the people who generated the value, the scientists and the BD people. So it's basically the only people I wanted to hire were, you know, the chief science officer, the chief medical officer and when we were ready for ahead of business development. So it's the people that are gener that are doing deals, licensing deals, revenue deals, people who are discovering the drugs people are developing the drugs people are, all of that's in house and then big parts of that can be outsourced to CDMOs and then all the accounting and all the finance and all the hr, I outsourced. So those were always outsourced. I think every one of my companies I outsourced all of that up until, up until we had so much accounting work. In the case of a couple of my companies, you know, we had 150 employees and so much accounting work and labor activity that we had to uh, bring people inside. So I would also add legal to that. So accounting, finance, hr, legal. I would outsource until you get to at least 100 employees or 200 employees. And then at that point I wouldn't bring all of it in, but you bring it, you have one head of hr, you would bring it, you would have a cfo and I would still outsource, for example accounting and I would still outsource the. You're going to always outsource payroll service. You know, you're not going to bring payroll in house completely. You're going to use ADP or paychecks or whatever for a very long time. And I would still, you know, I don't even think you need an in house lawyer maybe at that point, but you're still going to have a variety of law firms that you use on the outside. You know, I don't think it's until you're uh, at 500 to 1,000 employees that you really have full staff for all these things.

Kati Thomas: Yeah, yeah. It's fascinating though. It's, it's really on the things that leadership think that's more important to do. Right. I mean we've had companies that are uh, large enough and it outsourced essentially the entire department. Right. We have companies that are ah, not as large but they, they have people internally. All right, so I, on this, this set of questions are going to be a uh, light and round. So it will be like a uh, quickly. One metric you track weekly from day one.

Greg Ammon: Well, it depends on what our, it depends on what I promised the investors. So I'm, I'm pretty good about you know, the goals and objectives and expectations. So I always, whenever we do a round of investment, I make sure I meet with each VC that's involved and I identify what their expectations are for success. You know, what does success look like in two years when the money runs out? And then I build the metrics around that. So you know, if it's um, most of the companies I work with who are early stage biotech companies, I think it's, it's have they the metrics are what is the indication that's compelling and exciting? How well does the IP map to that indication. Is the IP going to be issued? You know, are the patents going to be issued? What do we got to do to shore up the IP to get the patents issued? How good is the evidence, the scientific evidence supporting the claims that we want to make? I mean that's, that would be my area of focus. It's around product market fit, it's around the indication, the application. Is it compelling? If not pivot to something else. That is. Most of the companies I work with have go through three or four pivots in the course of one to two years before they land on the opportunity. I'm on the board of the Blavatnik Fellowship at Harvard. I was talking to one of the fellows from last year about this and he said every single one of the fellows from last year have pivoted to a completely different business plan. In general, I've never seen a business plan end how it starts ever, including my own companies. So you got to be nimble. And I think, I think, I think starting with do you have the right lead indication? What is that compelling indication that is going to be a home run and then do you have the science to support it? So all the metrics are built around that.

Kati Thomas: Got it. And the rest of the ones you've already answered like the high end mistake I went down. But uh, I just couple more that I think we'll need your insight on. One non negotiable in board investor communication and then what best advice for founders pitching through uncertainty that you will you want to share?

Greg Ammon: Well, as far as the board goes. So I was just talking to someone who's raising around the capital now and we were talking about board structure. So first of all you want to have a neutral board, either 3, 5 or 7 depending on how much money you're raising with an even number from preferred and an even number from common with a. An industry independent that's, that's jointly appointed. And I think it's really critical that the board is open. Think of it as safe space. I know that's weird to think of the board as a safe space, but I think it should be.

Kati Thomas: Should it?

Greg Ammon: I think it's got to be. It should be open and transparent. I'm very. Listen, I, I could sell snow to Eskimos, but when it comes to the board and my stakeholders, I'm as transparent and balanced as you can be. Because you have to be.

Kati Thomas: And have to be. Yeah.

Greg Ammon: And I think it's really important to emphasize the positives and the accomplishments, but also balance that with the realities and the risks. So nothing is risk free and there's got to be clear and transparent communication. I also personally try to meet one on one with each board member between the board meetings. I don't believe in frequent meetings, but I believe that the meetings need to be high quality. So, you know, I think once a quarter is a good cadence for board meetings, even in an early stage company. I mean, some investors will require monthly and that's fine. But I, then I like to do once a quarter, but they're long and transparent and I have everybody in the management team present and we have open discussion and I try to convey that to the management team, but then I try to meet one on one with each board member between each meeting and, um, really understand how they feel about how the company's doing. So I just think, to answer your question, the metric is transparency and openness as far as dealing with uncertainty. Uh, I mean, if I knew how to deal with uncertainty, then people wouldn't hire me to do stuff. Nobody knows really how to deal with uncertainty. Well, in my opinion. But I think the, you know, part of it is what I tell my kids. You got to have a lot of grit and you got to grin and bear it. So, so part of it is just sort of. It's like when I'm playing tennis and I make a huge mistake. I can't dwell on that mistake in the next point. I've got to move on, gotta move on. And uh, and what I do in between my tennis points, I do three things which I think is relevant. Learn, reset, and prepare. So what is the one thing I can learn from the screw up? I just did register that in my brain. How do I reset myself? Meaning pause, take a deep breath. And then how do I prepare for the next point? And what do I got to be thinking of for the next point? And I think it's the same thing in business. I think in my mind, you know, mistakes are going to happen. You've got to acknowledge them. You got to have someone sign up to take blame for it. You've got to figure out how to effectively contain the issue. You got to put a mitigation plan in place to prevent it from happening again. And then you got to move on. And so I think that's how you deal with uncertainty. There's going to be all kinds of challenges thrown at us. And that's why being free to pivot is so important. I mean, uh, every company I've run, we've pivoted multiple times. And the ones that were the most successful and had the biggest exits were the best pivots. The ones that didn't have the most successful exits were the worst, were bad pivots. Got it. So sometimes you get it right and sometimes you don't. But you gotta be very open and flexible and willing to do that. It's harder when you're in the clinical phase because you've committed to the clinical trial process. You've already, you know, you've already got buy off from the FDA on a pro on, on a clinical plan. So it's really hard to change that. So that's why so much has to be done up front in the preclinical phase to, to measure twice and cut once.

Kati Thomas: Got it. It actually goes back to being transparent when you're talking to the boarder. So that's, that's really all the question we have. Just, uh, quick recap. We touched on crossing the value of death about milestone de risk business and not just raising money. Scale smarter by choosing what to build in house and what to outsource so you stay lean and invest already. Anything else you'd like to add?

Greg Ammon: No. We covered a lot in a short amount of time. Thank you very much, Cudi, for hosting this. And I, I will put in one plug for Witham. I've been using you guys for years. I mean, I've used your. Some of your personnel since 19, I hate to say it speaks to how old I am since 1996. I go back with some of your legacy people are no longer with your firm, but people who have been with firms that have been acquired by Witham. And I think it's a great fractional CFO accounting tax firm. M the tax partner I use. Lenny is amazing. I respect him to death. And all the people I've worked with in the past on the fractional CFO side and accounting side have been fantastic. They've saved me a lot of money and they've helped me enormously and I think are very reasonable and flexible in how they, how they work with clients. So I'll put in that plug. You didn't. I want to go on the record saying you never asked me for the plug, but I offered it to you in an unsolicited fashion.

Kati Thomas: Well, I appreciate that. I'm sure Jack Malley and Lenny Smith will be very, very, very happy to hear that. We're always here to help. I wanted to thank Greg for spending some time with me today. Again, I'm your host, Cuddy Thomas, and we provide back office accounting support for levels ranging from staff accountant to CFOs. We support the offices of control, AS and CFO. If you'd like to know more about what we do and how we support our clients, please go to witham.com Oasis and that's spelled OASYS. Thank you again, Greg. It was a pleasure.

Greg Ammon: Thank you. Good luck. Thanks for joining us. Be sure to subscribe to our podcast so you'll be first in line to

Kati Thomas: hear what's coming next.

Greg Ammon: Uh, don't want to wait for our next episode? Check us out@witham.com that's w I t h u um m dot com.