A week ago, a company calling itself General Inception emerged from stealth as a new concept, which they call an “Igniter company”, to promote the formation of new life sciences company. As described to me in a phone conversation with General Inception CEO Paul Conley, General Inception provides a range of science and business expertise and support to enable embryonic ideas to condense into functional startups.
The igniter metaphor Conley offered me is the spark plug of a car: it is required to start the engine and continues to provide a key part of the functioning whole. Conley extended this to say that General Inception plans to go for the ride, but let the scientific founders occupy the driver’s seat. But another ignition metaphor occurred to me, the skill of turning a tiny spark from flint and steel into a raging campfire. Without careful nurturing, most tiny sparks will never ignite a blaze; only with careful and staged addition of oxygen and fuel does this reliably occur.
General Inception is not a fund, Conley stressed, but structured as a corporation. The ultimate goal is to make systematic and reproducible the generally artisanal craft of discovering and nurturing new ideas – as well as sometimes terminating efforts early that do not appear successful.
So what does General Inception offer? First, some of the boring business functions such as quotidian finance functions such as paying bills. Also a wide range of expertise, from access to technical experts in a diverse set of biological disciplines to persons familiar with estimating markets and development paths. General Inception has lined up Contract Research Organizations and Contract Manufacturing Organizations, but not just as contract partners – General Inception has “meaningful” equity stakes and perhaps board seats in these companies. A key goal of General Inception is to identify key experiments which can be run quickly at these partners to test project concepts. This might be simply reproducing results from an academic lab or perhaps running a key experiment to de-risk the project. An example of a CRO partner is Triple Ring Technologies, which offers company incubator services and facilities both in the San Francisco Bay and Boston areas.
Interestingly, General Inception is casting a very wide net. Any life science concept is potentially a target: therapeutics, diagnostics, tool companies, agriculture, synthetic biology or whatever else is centered around biotechnology. Within the company there are defined practice areas: Tools & Diagnostics; Cell Engineering & Synthetic Biology; Therapeutics. But these are intended not to be siloed fiefdoms but rather foci which overlap each other and reinforce each other. After all, so many technologies are converging - a diagnostic may require synthetic biology or a therapeutic cell engineering. Conley believes human health will continue to grow – but non-health life sciences might grow even faster and overtake healthcare in terms of total economic value, so he is positioning the company to support company formation in all areas.
In terms of geography, not only are they scouring US labs but also in Europe. In the latter case, the companies that emerge might have R&D remaining in Europe but commercial operations headquartered in the US. Conley says the venture environment in Europe remains more conservative than the US, so General Inception can make a particularly large impact in Europe by helping ideas cross “the valley of death” to where a venture firm is comfortable investing in it.
Not only is General Inception stalking the halls of academia, but they are also talking to existing companies about dormant assets that might find new life in a startup. And General Inception hopes to form long-term relationships with innovators; having an idea fail early won’t be held as a demerit against the academic.
In terms of deal structures, General Inception looks to set themselves up as a founder, with founder’s common stock. Generally they would be funding companies at the seed or pre-see stage, perhaps taking the place of angel investors or “friends and family” investments. Venture capital firms often demand preferred stock, which gives them first rights to the financial carcass of failed ventures - General Inception will be taking the same risk as scientific founders of not getting anything from liquidated companies.
General Inception itself has raised $60M from a set of venture capital firms. Their goal is to reach a steady state in which around 25 companies are seeded and graduated annually. General Inception also sees itself as evolving to an information business – with a large experience base of startups they hope to glean new insights into predicting what ideas work and finding the best company structures to maximize the chance of success. Venture firms that invest in General Inception will have early access to companies incubated by the company. Conley has been piloting the company since February 2020, refining the approach and the set of expert resources which General Inception can draw on
In my career I’ve interacted with startups in a variety of contexts - as a potential employee or consultant, an actual employee or consultant and as a potential or actual partner. I’ve also daydreamed a rough business plan or two. I will be the first to proffer that this is hardly a comprehensive exposure to the variety of ways that companies are seeded. Thinking back on experiences such as Warp Drive, I can see the value of quick proof-of-concept experiments to either validate a company or simply nip off an idea that is unlikely to ever bear fruit – but I also know how complicated it can be to identify such experiments or assemble all the components to perform such an experiment. So I’m intrigued by General Inception and wish them well, though I reserve a certain amount of skepticism that starting new companies will ever be anything other than artisanal.