Divergence, Inc. Enabling Innovation Through Entrepreneurship – Divergence, Inc. and Start-ups in St. Louis James McCarter, M.D., Ph.D. Senior Entrepreneur in Residence, BioGenerator Adjunct Professor of Genetics, Washington University Washington University Monsanto Graduate Fellows Symposium, November 7, 2014
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Divergence, Inc.
Enabling Innovation Through Entrepreneurship –Divergence, Inc. and Start-ups in St. Louis
James McCarter, M.D., Ph.D.Senior Entrepreneur in Residence, BioGenerator
Adjunct Professor of Genetics, Washington University
Washington University Monsanto Graduate Fellows Symposium,
November 7, 2014
Divergence, Inc.
• Venture Café at Cambridge Innovation Center in CORTEX Every Thursday from 3-8pm –
Building a More Inclusive Innovation Economy –
www.vencafstl.org
• Quantified Self St. Louis – Self-Knowledge Through Numbers –
www.quantifiedstl.com
www.meetup.com/QS-STL
Entrepreneurship is a Contact Sport –Two Fun Ways to Dive Right In
Divergence, Inc.
• Accelerated innovation is needed to meet massive global challenges in health, food & environment.
• Entrepreneurship is uniquely positioned to drive innovation through creation of multidisciplinary teams with singular focus.
• The capital formation landscape is rapidly changing with the rise of angel investors, crowd sourcing & corporate venture.
• After a decade of capacity building, St. Louis’ entrepreneurial ecosystem is nearing critical mass.
• The mission & culture of WashU must expand from leading in knowledge creation to embrace innovation for societal impact.
• Students are leading WashU’s expansion into entrepreneurship.
Key Messages for Innovation & Entrepreneurship
Divergence, Inc.
ColleaguesDivergence: Derek Rapp, Jeremy Williams, Michelle Insco
Monsanto: Robb Fraley, Tom Adams, John HamerBioGenerator: Eric Gulve, Dan Broderick
Washington University: Jeff Milbrandt, Evan Kharasch
SlidesCortex Innovation District: Dennis Lower
St. Louis Regional Chamber: Jay DeLongBalsa and Idea Labs: Yinzi Liu, Avik Som
Be ready for everything to take longer than you expect.Just because others aren’t doing it doesn’t mean it’s notworth doing. Position yourself for exposure to smartexperienced people. Build a multidisciplinary and versatileteam. The best situation is being valued for products andplatform. Communicate fully with your team fora shared vision. Create incentives for your teamincluding ownership. Things change when you acceptinvestors’ money. Make every decision with an eyetoward the liquidity event. Do not obsess aboutvaluation. Find non-dilutive sources of funding. Leading astart-up company is an intensely personal experience.(Start-ups are risky but not starting is risky too.)
Paraphrasing a Dozen Start-up Lessons from Divergence CEO Derek Rapp
Forward-Looking StatementsCertain statements contained in this presentation are "forward-looking statements," such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits and the previously announced SEC investigation; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
Trademarks
Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners.
• Launched in 2012, Arch Grants is a non-profit creating a game-changing entrepreneurial culture and infrastructure to create jobs & attract talent to St. Louis
• Arch Grants funded companies are winners of an international start-up competition that has attracted 1,600 applications from 40 states and 20 countries
• 55 starts-up have been awarded $50K each in non-dilutive financing to launch in St. Louis
• With $3M in grant funding, companies have generated $50M in revenue & follow-on capital, 53 remain viable and St. Louis-based
Biotech Has Been Joined By a Thriving IT Start-up Scene That Boosted St. Louis Capital Raised in 2013 to $380 Million
Transform a 200-acre midtown industrial neighborhood into a vibrant, 24-7, live-work-play-learn innovation community
Transform a 200-acre midtown industrial neighborhood into a vibrant, 24-7, live-work-play-learn innovation community
• $2 billion development • 3.7 million square feet • 13,000 permanent jobs• 5 Innovation Centers • Green space & transit
• Launched in 2010• Consulting for Bioscience Companies• 200 Student Participants• 73 Consulting Projects for 37 clients• 28 WashU OTM Technologies• e.g. Business plans for start-ups
• Launched in 2013• Biomedical Engineering Innovations• 100 Student Participants• 14 Teams with inventions based on clinician-identified challenges• e.g. Cursor control for locked-in patients
Student Groups Are Creating a Culture of Entrepreneurship at Washington University
Divergence, Inc.
• Accelerated innovation is needed to meet massive global challenges in health, food & environment.
• Entrepreneurship is uniquely positioned to drive innovation through creation of multidisciplinary teams with singular focus.
• The capital formation landscape is rapidly changing with the rise of angel investors, crowd sourcing & corporate venture.
• After a decade of capacity building, St. Louis’ entrepreneurial ecosystem is nearing critical mass.
• The mission & culture of WashU must expand from leading in knowledge creation to embrace innovation for societal impact.
• Students are leading WashU’s expansion into entrepreneurship.
Key Messages for Innovation & Entrepreneurship
NEEDS: Successful exits for repeat investments &
serial entrepreneurs.
NEEDS: Leadership for an entrepreneurial culture
Thank you to Monsanto for support of St. Louis innovation & science education.
Appendix
Divergence, Inc.
Soybeans damaged by SCN
U.S. SCN distribution
Uptake of plant proteins into the SCN intestine
(B. Gao & M. Hresko, Divergence)
Soybean Cyst Nematode (SCN) is the Most Important Disease of U.S. Soybeans
• Over $1 billion in lost yield annually in U.S. alone• Yield losses of 30% without above ground symptoms• Neurotoxic pesticides out of favor with growers & regulators• Rapid breaking of genetic resistance in the field
Our Vision: Sustainable AgricultureA Strong Vision That Guides All We Do
• Producing More– We are committed to increasing yields to meet
the growing demand for food, fiber & fuel
• Conserving More– We are committed to reducing the amount
of land, water and energy needed to grow our crops
• Improving Lives– We are committed to improving lives around
the world
Monsanto’s Goal: Double Yields with 1/3 Less Inputs by 2030 versus the year 2000
Monsanto Company is a leading global provider of technology-based tools and agricultural products that improve farm productivity and food quality.
Monsanto is 100% Focused on Agriculture
“We succeed when farmers succeed.”-Hugh Grant, Monsanto CEO
Genetically Modified Crops Produce Food That is as Safe and Nutritious as Conventional
USED FOR GMO CROPS SINCE 1996
ACRES OF FARMLAND3.95 Billion
SUPPORT THAT GMO CROPS ARE JUST AS SAFE AS THOSE DEVELOPED THROUGH TRADITIONAL BREEDING
ACADEMICSTUDIES1000+
THAT GMO CROPS HAVE BEEN RESEARCHED AND DEVELOPED
YEARS30
ON AVERAGE TO DEVELOP AND TEST GM SEEDSBEFORE THEY’RE GROWN COMMERCIALLY IN THE U.S.
YEARS13
WHERE GM CROPS HAVE BEEN APPROVED FOR CULTIVATION OR IMPORT
COUNTRIES63
www.gmoanswers.com
Agriculture is at the Center of Global Changes
1990 20121980 2050TODAY
4.4B
7.1B9.6B+
1 ACREper person in
1961
less than1/3 ACRE
per person in
2050 DIETARY PERCENTAGE OF MEAT
9%in 1965
14%in 2030
CHANGING
CHANGINGRISING
DECLINING
Challenges
Source: The World Bank, Food and Agriculture Organization of the United Nations (FAO-STAT), Monsanto Internal Calculations
Innovation
BIOLOGICALS
INTEGRATED FARMINGSYSTEMSSM
CROP PROTECTION
AGRONOMIC PRACTICES
Monsanto’s R&D Pipeline Builds on a History of Innovation in Agriculture
2000s1990s1980s
BIOTECHNOLOGY
BREEDING
General Farm Planning
Weed Control Program
Row Spacing
Variety/HybridSelection
Refuge Options
Plant Population
Seed Treatment
Soil Insecticides
Pre-Plant Irrigation
Fertility Program
pH Management
Burn-Down Program
Tillage Level
Primary Tillage Program
Seed Depth
Planting SpeedThrough the Field
Other Planting Operation Decisions
Plant Population
Starter Fertilizer
Herbicide Application
Soil Insecticides
Fungicide Application –In-Furrow
Variety/HybridSelection In-Field
Keep Stand or Re-Plant
Post-Emergent Herbicide Application
Foliar Insect Control
Fertility Program
Foliar Disease Control
Irrigation Application In-Season
Equipment
Timing
Storage
Post-HarvestAssessment
PLANTING IN-SEASONPRE-PLANTING HARVESTPLANNING
Grower Decisions Over the Year –Farming in the Future Will Be Increasingly Information-Driven
• Innovation requires a scientifically literate public & talented young scientists from diverse backgrounds• YSP was launched in 1991 to promote science literacy and attract high school students from disadvantaged backgrounds into scientific careers through hands-on research and contact with active scientists• Each year more than 100 graduate student volunteers reach 1000 students in local public schools• More than 250 high school juniors have completed research internships at WashU – the majority major in science in college and 1/3rd complete a graduate degree• YSP is supported by the Endowment for Science Literacy at WashU
And One Last Message … The Importance of Science Literacy