Episode #128 | Biotools Can Beat Moonshots with Jim West

Everyone wants to fund the next miracle drug. Jim West thinks differently. In this episode, the Associate Director of BioTools Innovator makes the case that life-science tools and diagnostics are the better risk-adjusted venture bet than many therapeutics: you trade the 100X biotech moonshot for a 5-to-10X return with better odds, little regulatory risk, and a roughly five-year horizon. He backs it with the accelerator's own numbers: 95% of the companies through its six cohorts are still operating or acquired, out of roughly 2,800 applications — and explains why focus (not technology) is what most tool founders get wrong, what strategic acquirers actually pay for, and why private equity and family offices are reshaping how these companies get funded.

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Why Tools Can Beat Moonshots

SPEAKER_00 0:00

Hello there, welcome to the Lattice Podcast. I'm your host, Jenny Chen. My guest today, Jim West, has been on both sides of the table. He built a company that isolated and purified exosomes, sold it, and now runs BioTools Innovator, the accelerator that has seen nearly 3,000 life science tool startups through its doors. His argument is blonde. If you want a biotech moonshot, stay in biotech. If you want better odds, tools are the smarter bet. Let's get to it. Please listen to the disclaimer at the end of this podcast. Hello, hello. Welcome to the pod. We have a great guest today, Jim West. He is leading BioTools Innovator, which is a sister company to MedTech Innovator for those who are in the Med Tech industry. He played both the roles as an entrepreneur and also now as an investor. And so I really would like to have his perspectives on where the industry is in terms of biotools, but also want to dig into his journey and why he got to the point where he is today. So, Jim, welcome to the pod.

SPEAKER_02 1:05

Thanks, Jenny. It's a pleasure to be here. We had uh talking right before we start. We've had some scheduling challenges, but I'm really glad it was.

SPEAKER_00 1:12

As usual with the investors. That's not uncommon. So yeah, tell us how did you what how

Jim West’s Nonlinear Path To Startups

SPEAKER_00 1:18

did you become the lead at BioTools innovation?

SPEAKER_02 1:21

Yeah. Not traditionally, not in the traditional way by any means. It actually started for me when I was in grad school. I I was actually got my master's in biomedical product development. And I I knew I wanted to be an entrepreneur. I wanted to build new products and bring new things to market. But I didn't, you know, like a lot of scientists and engineers, I didn't really know how. I knew I wanted to, but I wasn't sure how. And then in the middle of my master's program of engineering, I got the opportunity to study at a university in Singapore that had a master's in entrepreneurship program at uh Nan Yang Technological University in T4. And so uh that that program gave me the opportunity to kind of learn the business side of business and entrepreneurship. And uh it really gave me, I think, the confidence, but also maybe more importantly, just like the the confidence in the vocabulary and kind of having that fundamentals of of business knowledge I could hold conversations on kind of both sides of the field. And I did that. It was a very fast-tracked program. I completed it in about nine months. And uh then I came back and I finished up my uh mechanical engineering master's program in biomedical product development, and then uh kind of went off into the world, right? And uh I knew I wanted to build businesses, but I also knew I needed experience. One other thing about me that makes me maybe different from other people is I was laid off five times before I was 21. Wow. And it was really like I was doing IT consulting and things like that right out of high school. And uh what I found was like each time I got laid off, I got a better job, but I still like I found that downtime very demoralizing and uh didn't really like where my career was going. So, you know, I knew I wanted to work in kind of small businesses and I wanted to be an entrepreneur, partly because I think I wanted to own my own sort of career and destiny, and I wanted to be in control. I didn't want other people being in control. And so uh yeah, so that kind of set me off. And I spent about 15 years developing medical products, working in small businesses. I worked in electrosurgical tooling, some uh measurement diagnostic tools. I did uh a cancer ablation therapy system, which used fibrocked cables to the breast, a tumor to basically uh cook a blade it. Uh, ended up being lead engineer on that company for a little while, and then got the opportunity to found Clara Biotech. And uh Clara was a company where the inventor was a professor at a university, had approached me to start this company with the technology they developed. I knew nothing about the industry or the field. I'd spent most of my time in medical devices, but it seemed like a really neat opportunity and a really impactful technology.

Clara Biotech And The Exosome Problem

SPEAKER_02 3:55

And so uh yeah, I kind of jumped in, we we founded the company, and then I was able to get some grants and kind of take it off from there. But uh the whole leading up to this, why we're talking about this, that company, Clara, went through the first year of BioTools Innovator back in 2021. So this I see the the group started the accelerator, and my company was in that first year of the accelerator, uh, where I was fortunate enough to be selected as one of their top three finalists who was pitching for a grand prize of $250,000, which would have been a huge amount of money and a big difference for us. We did not win it, we got second place, but we did win another competition they had, which was best video. So we made a one minute about us video, and that that brought home some prize money for me and the company. But the program was great, and uh it was really great to kind of meet the connections in the life science tool space and kind of get exposed to that outside of traditional biotech. And then uh yeah, a few years later we were able to exit the company and then kind of came on here after that.

SPEAKER_00 4:49

Well, this episode is obviously not about Clarobio, but what does it do actually? What kind of tool is this?

SPEAKER_02 4:55

Yeah, it's uh it's in the field of exosomes. So it was a specific uh capture-release technology for specific types of exosomes based on their surface marker proteins. An exosome is really simply uh an excretion of cells. It's little uh you know, we think they're signaling molecules, if you will. They got fragments of DNA, RNA, protein inside of them, but they're, you know, they're like 50 nanometers in diameter, so pretty small, but but maybe some profound impacts on health. And so people looking at these exosomes for diagnostic indications as a comparable to circulating tumor cells as a liquid biopsy, looking at the exosomes as a marker of disease. Uh, as well, they have some therapeutic benefit and some drug delivery benefits. So there's a big opportunity with exosomes, but it's a very emerging field. And so for us, we're trying to solve problems around sample preparation.

SPEAKER_00 5:47

And that is actually the real bottleneck to the industry rather than the science, is what I'm taking away here.

SPEAKER_02 5:54

It's a couple things. I think uh the science is very difficult because there's not a lot of good agreed-upon methods. So, in terms of like how do you isolate, how do you even quantify or qualify your samples and what's there, it's it's very difficult. Again, because there's not good standards, there's not agreed upon standards, and uh the sample prep is a very impactful part of the process with wide variability depending on what method you're using.

SPEAKER_00 6:20

Well, now that you have gone through the entire journey of funding a company and then an exit, you certainly have the credentials to mentor other companies of space, but based on your uh long journey in medtech and biotech, you're you're kind of a jack of all trades, if I can describe you as that. And why did you

Standards And Sample Prep Bottlenecks

SPEAKER_00 6:38

decide a bile tool is a particularly attractive sector for you to remain as an investor?

SPEAKER_02 6:43

Yeah, you know, it's uh it's funny. You you kind of are what you know. And uh I spent, you know, I spent five years really digging deep into the space, uh, the subspace that we were in, got very comfortable and deep within that. And so, you know, when I was kind of looking at what was next, I was really looking for an opportunity that would help me to sort of build upon and leverage uh the last five years of sort of developing this business and learning the players in the industry, the investor community, the strategic community, and um kind of building and growing that. So for me, the opportunity to join BioTools Innovator was a chance really to kind of double down on the foundation I put in place and really continue to build and grow that.

SPEAKER_00 7:20

And you've joined the group for how many years now?

SPEAKER_02 7:22

Uh three years now, yeah.

SPEAKER_00 7:24

And how many companies have you helped so far?

SPEAKER_02 7:27

We helped uh 30 companies a year.

SPEAKER_00 7:29

So Wow, so it's almost a hundred.

SPEAKER_02 7:31

Almost a hundred, yeah. We're uh we're in our third cohort of mine right now, six for the program, but for me, uh third. So yeah, we're up to 90, 90 companies.

SPEAKER_00 7:41

Yeah, but this is not the companies you actually came across because you're you also have to select out of a larger cohort. So do you have a ballpark number of how many you have encountered so far?

SPEAKER_02 7:52

Yeah. I mean, I know statistics for the program is uh we've had about 2,800 applications to our program over the six years. Can't exactly divide it in half because it is accelerating in in in in reach and marketability over years. But uh yeah, I mean, at least a thousand applications have come in. Wow. Probably a little more under under my time here. And of course, you know, to be honest, I don't read every single one

Inside BioTools Innovator’s Selection Engine

SPEAKER_02 8:15

of the applications. It's a community.

SPEAKER_00 8:16

I was thinking of I was like, how do you process, I mean, a thousand over three years time? That's almost one company per day.

SPEAKER_02 8:24

Maybe this is my chance to do a little marketing blurb, but you know, we're always looking for investors and subject matter experts who are in and around the field. And what we do is we actually recruit a community of people who have specific expertise and interest in the startup companies. And uh they'll, you know, we'll we have a lot of people review a small number of applications. And so we kind of our our goal is to get at least, you know, three to five reviewers per application. And then our job is then to go through that sort of that reviewed application process, and then we work to pick about the top 15% to take to our stage two selection. So for some context, last year in 2026 at the current year, we had more than 500 applications to the program last year. And uh of that, we invited 15%, about 85 companies, to our stage two selection, which is these in-person pitch events. We do one in Boston and San Diego. Really great events. The companies come in, they pitch to a small table of three to five experts, and then they get about 20 minutes at a table, and then we kind of switch the tables up and they get you do that about five times. And so they get these these these fast track five pitches, but to small tables. I love it because you know, if you've ever been in a big room, you get that one judge who's kind of like they sandbag the whole thing with maybe an off-topic question, or they just kind of dig into a point that's kind of annoying. And you know, when you do it five times to different groups, you know, you might get that once, but you know, the rest of them are pretty good. And people build great relationships. I've seen companies walk away with investments from our pitch process, don't even make it in the program. So it is it is pretty prestigious just to get invited to that that that pitch event. But then from those companies, we pick 30 at the end to sort of develop the program.

SPEAKER_00 10:03

That's incredible and rapid accumulation of data on your end as well, because not only do you see the pitches, but you also get feedbacks from the investors or advisor make comments. Like, I would love to be a fly on the wall to those pitches just just just to learn.

SPEAKER_02 10:21

Well, and that's the that's the invite. So if you're a subject matter expert or an investor in the field, uh we'd be happy to invite you to one of these events. We, you know, it's a great chance to meet the companies, the people, but also be a part of the conversation and hear hear some of that dialogue for sure.

SPEAKER_00 10:34

No, I'm totally volunteering. Now, after seeing these, all these information, do you form do you think you can formulate a pattern of what is probably going to be a winner in the next couple of years? In other words, do you have any, do you do you want specific kind of companies right now to show up on your dashboard?

SPEAKER_02 10:53

Right. So let me tell you, let me tell you a statistic and then I'll talk, talk, talk, try to answer that question. So in our programs history again, beyond me, but the six years we've been around, 95% of our businesses that have come through the accelerator are still in business or been acquired. So we've had five acquisitions. You can kind of do the math there. But you know, we we have a at least, you know, six years. There a lot are still in the running. So I think compared to other programs and accelerators, uh, you know, those numbers I think are are pretty compelling. And the question I ask myself is, well, why? Like how, why, why is it that number? How are we doing it that's different than what other people do? And I I will say probably the the best I've been able to synthesize it is an investor, you know, will look at a company and they'll say, you know, what are the pros? What are the cons? What's good, what's bad, what are the risks? And, you know, are we likely to get a return on our investment? At BioTools, we ask a slightly different set of questions. We say, you know, what are they doing well? What are they gonna struggle with or struggling with, and how can we help them? And if we can help them significantly and our community can help them, then that's that's the kind of people we're looking for. Oftentimes this is in uh the big problems, and companies don't always know these are the problems, but the big problems that we see companies struggling with, even if they don't know it, is focus. You know, you you got a lot of platform technologies, a lot of amazing technology out there, and they're like, well, it can do this, it can do that, it can, you know, it can go everywhere. But the real question is it's gotta go somewhere, somewhere specific that you can build your business off of. And so really focusing down to a specific application you can kind of go to market with. That's probably one of the biggest things we help companies with uh across the board. But you know, there's a lot of other stuff too. But I think that in terms of like, again, what are we looking for? We're looking for uh compelling technologies with really great coachable CEOs. We don't like a lot of ego. You know, if you know it all, if you're like here to like show off and you know show us how smart you are, that's not really gonna be a good fit. All we can really provide is coaching at the end of the day. So, you know, people who want to learn, wanna ask questions, want to get feedback. But those are the ones that we look for to help.

Focus And Coachability Define Winners

SPEAKER_02 12:55

Obviously, differential technology, the opportunity to make an impact in the market, solving a problem, or the ability to potentially solve a problem that could have big impact, those are all really attractive for us. So there's got to be some component of a foundationally interesting technology, but it has to be coupled with the opportunity for some business impact as well.

SPEAKER_00 13:11

Do you help them with operating challenges?

SPEAKER_02 13:13

We do in a variety of ways. So one of the big benefits our program offers as well is mentorship. And so we really work with the companies to find the right people for them at the stage they're at and what their kind of goals are. And so this could be maybe it's an investor who is there to sort of advise you on, okay, you're looking for your Series A milestones and you got that coming up, but what should those milestones be? What's what's reasonable for the amount you're asking for? Do you have the right traction to get that amount or should you split it into different rounds? So the strategy around fundraising is, you know, that that's one thing we can help people with.

SPEAKER_00 13:50

That's huge. Yeah.

SPEAKER_02 13:51

Obviously go to market strategy, customer, customer validation. We we we help a lot of people with fundraising and business strategy, I would say. But we also help people with, you know, we've had people with like, you know, I gotta fire my co-founder. We have people who, you know, have to pivot their business for one reason or another. And so sometimes it's, you know, sometimes it's me helping them directly with some advice or support. Sometimes it's me finding the right people who can help them with that feedback or support. We had one company that was like, hey, they're doing very well, but they're like, hey, you know, we got this one mentor and they're great, but we actually want a little more help here and here. Can you find anybody? So we were able to go out and uh help get them that. And and that was uh that was great. And they got kind of what they needed to get the support they were looking for.

SPEAKER_00 14:39

Yeah, one thing we haven't talked about is money. So I I I made the assumption that BioTools Innovator is very similar to MedTech Innovator, which does provide a significant uh capital uh for the winners. Do you guys also provide some kind of financial benefits?

SPEAKER_02 14:56

We do. Um so we are uh both programs, we're actually nonprofits. So we I would not say we're traditional investors in in the way a traditional investor would invest and take equity. But we do uh in our program, we pick for our we call it our capstone. And so for us, it's uh coming up on October 14th in San Diego this year, but we and we do kind of our demo day, but then our we pick four finalists. We call them the finalists. They're they're kind of selected to go to our grand stage at the end of the day, and they get to do a pitch off and uh in front of the whole audience. And uh it's audience voted, so they pitch, they answer some questions, and then the audience votes, and then we give away a $250,000 cash prize award. And it's uh again, we're not really an investor in that traditional sense, so it is like a it's it's more like a it's not even a grant, it's just an award. So it's like there's no equity exchange, which is that's kind of crazy. Yeah, yeah, well. We we have some smaller prizes too, but it helps, I think, you know, for us, it helps elevate the quality and the marketing of the program. Like people see that and it's a it's a it's an impactful number. It's it it does make an a meaningful difference to a company to win that award and uh to

Mentorship Plus Nonprofit Funding Levers

SPEAKER_02 16:05

sort of be represented above the pack. But yeah, it is a it is a great benefit to the community. And uh, you know, we're looking at other things in the future. Maybe we will take the opportunity to invest or set up some structures that allow us to do that. But right now, it's really just more of the grant awards. And I I would be remiss not to also mention we uh we have some grants set up with BARDA. So we're a BARTA tech hub. Both Mad Tech now and BioTools are are Barta Tech Hubs. And so we actually facilitate various grants on behalf of BARDA as well. And you don't necessarily have to be through the accelerator to qualify for these grants uh contracts as well.

SPEAKER_00 16:39

I'm still just wrapping my head around a 250,000 free money, no equity taken kind of free money deal. But I know, you know, there is some reason behind that, the availability of the capdo is because you have these nonprofit organizations are actually supported by various larger met tech, biotech companies, in you know, really incentivized to stimulate the field, but also potentially become acquire in the future. What is what is a perfect company to be acquired by some of these larger guys? I would assume Thermal Fisher, Roche will be very interested in some of your companies. Do the should the founders prepare themselves for those kind of exits?

SPEAKER_02 17:20

Absolutely. And in fact, you know, we get companies, some people are surprised. You know, we have companies that have raised $15, $20 million still coming into the program. You're like, well, you've raised, or or maybe you've got three to five million ARR, and you're like, well, I got three to five million AR. What's an accelerator going to do for me? But those are actually perfect companies for us because for those companies, you know, what they're looking for is they're looking for that next step. What is that Series C financing look like? Or maybe more importantly, what does the acquisition path, exit path look like? And that's where these strategics come in. And you know, we actually spend a lot of time talking to them. We do panels with these strategics, we we bring them in front of our companies to meet and talk because they're actively looking for and interested in these companies. And the, you know, we bring to them a qualified, curated set of validated companies. But what they don't want is they don't want unproven market technologies generally. So, you know, they want to see the commercial traction, they want to see, you know, growing, you know, again, every company is different, everybody has different stages. But, you know, if you're showing solid commercial traction growth, if they understand the space and it helps kind of, you know, fill out strategically their portfolio and what they're looking for, those are really good matches. The problem, I think, with a lot of companies is they're like, hey, you know, this company could really get my sales off the ground. I don't have any sales right now. And uh, so that's like a mismatch because the company's like, well, they can fix my problems. And the strategic's like, well, once you get the sales and prove that like the customer wants it, then I'll get really interested. So so I think, you know, there is like, it's definitely worth meeting your strategics early and getting introduced and keeping them abreast and finding out specifically what they are looking for because each one's different, each one has different timelines, each one has different sort of things that they're looking for. You know, they may require worldwide exclusive access. If you've got a university license or you did a deal earlier and you gave Africa away to some company for a deal, that could actually destroy your opportunity with certain strategics. So there's like a lot of things you need to know and think about going into it. But yeah, I think in a nutshell, you know, having your having your technology, having it protected, validated, all those things, but then showing commercial traction. Commercial traction is the sexiest thing to an investor, to a strategic, everybody wants to see it. Like, you know, you got a lot of questions about is

What Strategics Want Before They Buy

SPEAKER_02 19:32

this gonna work or not? When people start buying it, that's when people know it works.

SPEAKER_00 19:36

Almost feel like you should have this conversation at the beginning of the funding, funding the before you even fund the company to figure out an exit path. You know, obviously acquisition is a major exit path for BioTools, but we we have seen also IPOs as well, you know, companies like Illumina come in mind. Yeah.

SPEAKER_02 19:55

I've seen a few. I don't know if we've seen a lot.

SPEAKER_00 19:57

Very few. Yes.

SPEAKER_02 20:00

And I I think, you know, I would say for most of our companies, you know, I it seems like the the vast majority, like your exit strategy is going to be either probably to a strategic or maybe to private equity. I mean, very few, and I'm not saying no because there's definitely outliers. There's maybe some people who have a little bit of a therapeutic play to them where it could support a pure IPO, but but very few of the companies are going to IPO in a traditional sense. It's really going to be to your point, like it's an exit strategy, likely said either to a strategic or to a PE. And uh for the last three years, we've seen these very depressed numbers, which has really, I think, made the capital situation in the whole field very tough. So, you know, we've seen a little bit of movement this year. Uh I hope we continue to see it. And I think, you know, we're we're hopefully seeing more action. But that will hopefully unleash more capital and allow more capital to return to the space.

SPEAKER_00 20:52

Yeah, well, since we only have five minutes left and I'm very aware of your busy schedule, I I I gotta ask a tough question. So, you know, I'm an investor in the space. I invested in some bioprinting company and they're definitely in the bio tools category. Does it make sense for investors to invest in this category when you know that typically is acquisition? Would you still get a nice multiple in a nice timeline?

SPEAKER_02 21:15

I think the answer is it depends. And so I think if you're uh if you're familiar with the space, if you, you know, if you're if you have a working knowledge and vocabulary and you understand the field a little bit, I think it's definitely a great place to be because one, uh, you know, the companies really do need help. I mean, they do need help and they deserve help. And these companies have a hard time telling their story to people who aren't in the know. It's like, you know, what disease are you curing? Well, I'm not, you know, I'm I'm I'm I've got a new biomanufacturing process. What's biomanufacturing, right? So it's like it's it's very tough to communicate these stories. But the impact to human health, the actual like impact to medicine and like future, future biotech is all based off of these technologies and these companies. So I think that if you want to do the the therapeutic home run grand slam sort of investing where you have a five, three to five percent chance of getting a return on your capital, but you get one shot at plate, stay in biotech. The life science tools is not your place. If you want to have like a 5x, if a 5 to 10x return on capital is is good for you and you, you know, you have a five-year horizon and you like the better odds, you don't have the regulatory risk, you know, the I think the odds are much better in the life science tools space. So you kind of trade off some of that that home run return capital for more predictable returns, but I think they're more reliable. And so that's the that's the trade-off. So a pure biotech investor, probably not a great player in the space. And if you want those returns, then that's probably not your place. But if you know the space, you want to make an impact, and these really do have a big chance for impact, I think it's a great place to put your dollars because it is important. It's in hugely impactful to the future of both our economy but also our health. And uh the returns are there. It's just they're not, you know, they're not gonna be that hundred X most likely.

SPEAKER_00 23:11

Well, the hundred X also came after a hundred failures and tons of risks. So there there is a trade-off for sure. And now you mentioned a little bit that we were in a downturn for most of the last couple of years. And I think actually, since last year and this year's things are looking up for

Returns Outlook With PE And Family Offices

SPEAKER_00 23:28

biotech and medtech in general. What is your prediction looking into our crystal in terms of the private funding landscape for bio tools in the next three to five years, in your opinion?

SPEAKER_02 23:38

It's a really good question. And I think, you know, building off of the previous question, you know, like are the returns there? And I think for some investors they are, for others, they aren't. And so, you know, I think what we've seen and will continue to see is we've seen more private equity moving into the space. And so I think we'll continue to see private equity building, placing bets and building infrastructure in the tool space. The other thing I think we've seen and will see is family offices coming more into the space, which I think is really interesting because they have a very different time horizon, a very different capital return policy. Some of them don't want you to sell, they just want to make money for the next 50 years. Yes. So as an entrepreneur, uh, you know, you need to really gauge where your capital is coming from and what are their goals and expectations, and maybe even be a little adaptable towards it. But, you know, I think for a lot of entrepreneurs in their heart of hearts, if you told them, you know, we want you to build a sustainable long-term business that's gonna be here in 50 years, there are probably a fair number that would be very excited by that opportunity. But, you know, with venture capital, you don't have that luxury often. And so I'm kind of I'm kind of rambling on here, but I I do think that PE and family offices are gonna change and be more impactful in the field over the coming three to five years. And I'm kind of excited to see what that looks like.

SPEAKER_00 24:54

I love the rambling, except we're running out of time. And I sort of will invite you back for another episode talking about some of the tools I've been looking at and we can schedule those in. But thank you so much, Jim. This is a great conversation, despite lack of time. I think we got a lot out of it, and hopefully people can reach out to you uh directly on LinkedIn, or do you have a website or bio? Yeah, LinkedIn.

SPEAKER_02 25:14

I I can share my web, my email if you want to share it with your on your link here. But yeah, LinkedIn's a great way to get a hold of me, or biotoolsinnovator.org is our website.

SPEAKER_00 25:22

Yeah, that's that should be easy to remember. Well, thank you very much, Jim. Talk to you later.

SPEAKER_02 25:26

All right, thanks, Jenny. Bye-bye.

SPEAKER_00 25:28

This podcast is for educational and informational purposes only. The views expressed do not constitute medical or financial advice. The technologies and procedures discussed may not be commercially available or suitable for every case. Always consult with a licensed professional.