Biotech Bytes: Conversations with Biotechnology / Pharmaceutical IT Leaders

How to Launch a Biotech Startup in 2025 | Real Talk with Richard Bendis

• Steve Swan • Episode 34

Share episode

How to Launch a Biotech Startup in 2025 | Real Talk with Richard Bendis #richardbendis #healthtech #entrepreneurship

What does it really take to build a successful biotech startup in today’s tough investment climate? Please visit our website to get more information: https://swangroup.net/ 

In this episode, I sit down with Richard Bendis, the powerhouse behind BioHealth Innovation, to unpack the raw reality of starting a life sciences company in 2025. From navigating non-dilutive funding and government partnerships to leveraging EIR programs and tech transfer strategies, we dive into the entrepreneurial ecosystem that’s shaping the future of biotech. 

Richard’s insights span decades of innovation policy, investment, and commercialization strategy - exactly what founders and future founders need right now. If you're looking to launch a biotech company or you're struggling with funding, this conversation is packed with practical knowledge.

Links from this episode:

✅ Get to know more about Richard Bendis:  https://www.linkedin.com/in/richbendis  
✅ Learn more about BioHealth Innovation: https://www.biohealthinnovation.org

🔔𝐃𝐨𝐧'𝐭 𝐟𝐨𝐫𝐠𝐞𝐭 𝐭𝐨 𝐬𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐨𝐮𝐫 𝐜𝐡𝐚𝐧𝐧𝐞𝐥 𝐟𝐨𝐫 𝐦𝐨𝐫𝐞 𝐮𝐩𝐝𝐚𝐭𝐞𝐬.

https://www.youtube.com/@Biotech_Bytes/?sub_confirmation=1 

🔗 Stay Connected With Us.

LinkedIn: https://www.linkedin.com/company/the-swan-group/ 

Website:  https://swangroup.net/   

=============================

🎬Suggested videos for you:

▶️ https://www.youtube.com/watch?v=yF7iwNZiIis 

▶️ https://www.youtube.com/watch?v=ZWXIIe66-kI 

▶️ https://www.youtube.com/watch?v=T6EzJ1F_6pg 

▶️ https://www.youtube.com/watch?v=be8szNVFrNk 

▶️ https://www.youtube.com/watch?v=_Be6WEEy2JM 

=================================

🔎 Related Phrases:

How to Launch a Biotech Startup in 2025, Real Talk with Richard Bendis, How To Start A Biotech Company In 2025, Biotech Startup Funding Strategies, Non-Dilutive Funding For Life Sciences, Biotech Investment Trends 2025, BioHealth Innovation Richard Bendis, Early Stage Biotech Challenges, Government Funding Biotech Startups, Commercializing Biotech Research, EIR Programs In Biotech

#biotech #startups #biotechstartup #fundraising #lifesciences #biotechfunding

Steve Swan [00:00:00]:
Join me for a great conversation with Rich Bendis, president, founder, CEO of Biohealth Innovations from Rockville, Maryland, where we discuss AI biotech investment and the government's obligation in early stage biotech research. Hope you join us. Thank you. Welcome to Biotech Bytes. I'm your host, Steve Swan. And today I have the pleasure of being joined by Rich Bendis, the founder, president and CEO of Biohealth Innovation in Rockville, Maryland. Rockville, Maryland. I got that right, right, Rich?

Richard Bendis [00:00:34]:
You got it right. Rockville, Maryland, Montgomery County.

Steve Swan [00:00:37]:
Cool. Very cool. Thank you. You know, usually, like I mentioned a minute ago, usually I start with asking my guests to introduce themselves and how they got to where they are. But I think it would be a little more relevant, I guess, you know, to have you sort of introduce your organization and what your organization is and what you do and then back into you. Right. And how you got to there and what you did to get there. So give us a little background on, on, you know, biohealth innovation.

Richard Bendis [00:01:05]:
Great. Thank you, Steve. Pleasure to be here with you today. Biohealth Innovation was created around 2011 and I am the founder and CEO, as you mentioned, of Biohealth Innovation, which is a 501c3 nonprofit organization. And I actually came into Montgomery County, Maryland basically as a consultant almost 15 years ago now. And the reason for that was, is they basically said, we have all of these assets like the National Institute of Health, the Food and Drug Administration, we had at that time Human Genome Sciences, MetaMune, which were two of the big biotechnology stocks 15 years ago, and companies that were really emerging. Plus you had some really strong research universities like Johns Hopkins University System of Maryland and others. And basically everything was really government driven or academic driven.

Richard Bendis [00:02:04]:
It wasn't industry driven. So they said, how do we get a greater return on all of the assets that we have in this region and find a way to get industry more connected. So I came in as a consultant and basically interviewed about 90 people, 55 organizations over a six month period. Basically said there's a challenge. The challenge is, you know, we have the federal government, we have state government, we have local government, everybody's engaged, we have academic institutions, but there is really no direct connectivity to industry. And we had a lot of industry players that were established. United Therapeutics, Emergent Biosolutions, GSK Metamune, Human Genome Sciences. But really they were not engaged in the biotech ecosystem at that particular point in time.

Richard Bendis [00:02:58]:
So I said, what you really need to do is to create a nonprofit organization that's market and industry driven. Not dependent on government funding or academic funding, and that the industry is a true partner to it and it needs to be focused on working with emerging life science companies to provide the go to market strategies and commercialization assistance to them. Not as much the R and D, because a lot of them are researchers and scientists that understand R and D, but they really didn't have a great deal of business experience. So in floating this to an advisory board back then, they all agreed it needed to be done. But I said, if you're going to create a nonprofit, you really need to create people who have industry entrepreneurial investment experience running an organization like this. It also doesn't need to compete with other nonprofit organizations, tech councils, trade associations in the region, and really needs to carve out a space to provide services that are not being provided to these types of people within this area. So everyone agreed. I said, you need to have people step up to the table, provide three years worth of funding so that the, the management team doesn't have to be out there with their hands out looking for money all the time and can focus on the programs to support the ecosystem.

Richard Bendis [00:04:24]:
So the other thing is, back then, 15 years ago, everybody was referring to everything as biotechnology. And you remember everybody wanted to have a biotechnology cluster in the United States, whether it's a city, a county, a state, and they wanted to compete with the leading biotechnology centers. And we said, really there's a lot of things changing in that dynamic. And it's not biotechnology, it's not just life sciences. So we created a new term called bio health. And the reason for the bio health was the bio industry, pharma industry, medical device industry, but it was converging with the technology industries. And you look at AI, machine learning, quantum computing, digital health, all of those elements really were being incorporated into healthcare delivery. And also the pharma bio companies, medical device, vaccine companies, needed to embrace technology more.

Richard Bendis [00:05:20]:
So we really created the biohealth term, trademarked it, and really created biohealth innovation to focus on the biohealth industry, which was broader than just focusing on biotechnology companies. The other thing is we basically wanted to create programs that nobody else was providing at that time. And so the initial programs, when we were talking to the National Institute of Health and their tech transfer office, they had a great deal of licensing managers, but they had no people that had market, industry or business experience out of that 65 person office. And I said, well, you need an EIR and that's an entrepreneur in residence. And they said, well, what is that and what do they do And I said, well, it's an experienced person that comes from industry. They have been a successful entrepreneur, they've run a business, but they understand what needs to be connected with good technology and how do you connect it to commercialization partners or develop a go to market strategy. So that was one of the things that was missing in the region. And we created the first entrepreneur in residence program with the NIH back in around 2012.

Richard Bendis [00:06:32]:
And I know you were getting ready to answer, ask me a question, but I, you know, if you just let me roll, Steve, I'm just going to keep rolling on some of the other things and you'll learn that, you know, there's not a shortage of wind with Rich Bendis here.

Steve Swan [00:06:45]:
It's okay. I love it, I love it. What I was going to ask, I was going back was you mentioned real early on to provide services to these companies. What, what are some of those services? Just to give the audience an idea.

Richard Bendis [00:06:58]:
Basically when we're talking about services, one of the first things was we're in the center of the, of the headquarters for all of the non dilutive funding, non equity based funding with the NIH who basically, you know, up until now had about a over 40 million billion dollar budget, you know, approach 47 billion today. And they had the SBIR program which is, you know, a billion, 3 billion, 4, which is the largest seed capital program for life sciences in America. But our region was not a great recipient in being competitive with Boston and San Francisco going after non dilutive funds. So the entrepreneurs who are running and building life science companies were doing it with their own resources, angel investors and really didn't compete effectively. So we created a program to assist in pre proposal assistance to help people get ready to apply for non diluted funding. And we still do that today. We've helped over 200 companies have about a 50% success rate. And that's something that's really still needed because all of the equity players would like to see as much non dilutive funding coming into their companies.

Richard Bendis [00:08:11]:
The EIR or Executive and residence or Entrepreneur in residence program program, the services provided there would be not bench research, but if you need help with your regulatory strategy, your clinical plan, reimbursement, intellectual property protection, how do you put your pitch deck and your business plan together for what the investor client is looking for? How do you connect the strategic partners or key opinion leaders that you can add to your advisory board? All of those things that really a lot of emerging life science companies don't know how to get access to and can't afford. And basically something that Biohealth Innovation created as part of its service portfolio to assist emerging life science companies. Actually, it's not even just the life science companies. It was the tech transfer offices at universities, large pharma and bio companies that wanted to spin out companies but didn't know much about the startup world. So it was really not just working with emerging entrepreneurs and researchers, it's working with the tech transfer offices, working with established companies that wanted to do spin ads as well. So. And that's really become the cornerstone program for bhi. Fifteen years later we have a cadre and we'll get into this more Steve.

Richard Bendis [00:09:31]:
Of about 33 entrepreneurs and residents that work for us. Some full, mostly part time people and they're located around the United States. And what's unique about them is we have a bench strength that our team can provide knowledge and access to resources. And every one of those things I've talked about because each one of them doesn't know everything about that is necessary within the life science world. But we basically have complimentary people who can basically provide whatever knowledge network introductions are needed in almost any element when you're trying to build your biohealth company.

Steve Swan [00:10:11]:
That's great. And do they, do they have. Again, thinking about my, my audience, the IT world, right. Or do some of them come to you looking for fractional or part time or IT assistance or technology?

Richard Bendis [00:10:25]:
Yeah, basically when you look at your world and fractional, one of the strengths of our EIR team is a lot of them will go in and because you know they can't afford full time C level people, right. They'll go in as a fractional cbo, coo, cto, cso, cio, cfo, everything that you can, even CEO. So we've had people go in to work with the researchers and scientists and they'll go in on a fractional basis, an hourly basis, a consulting basis, based on what the needs are and what can be afforded at that time. And you know, one thing that's also unique about our people is that most of our people are not sitting on a bench at a venture capital firm or their university looking for their next job. They all have gigs that they are working on today. They use what they do for BHI to supplement their incomes. It's not as much primary income and they do it on a part time, hourly or project basis. And like you say, you're in the IT world.

Richard Bendis [00:11:29]:
So basically we have people that have the digital health, the AI experience, the machine learning experience and a lot of that Sometimes is supplementary to the core business where it might not be an IT company, but they still need access to the IT resources that they have in trying to grow their business today.

Steve Swan [00:11:49]:
Right. And I. So we'll get, we'll get, we'll have conversations with companies where, you know, they'll have their foundational folks in there, right, Doing their desktops and their phones and stuff like that. But then like you said, they can't afford the high level, I don't know, make it up. Somebody that can do their cyber security or somebody that can do commercial systems, if they're getting close to that, or somebody for ERP or whatever, their research systems. So they'll look for a fractional hourly. Maybe they only need them six hours a week, maybe they need them for two months, for 10 hours a week, whatever the number is, you know, I don't know. But they, yeah, they talk to us and they say, hey, listen, do you know somebody? And we know a lot of different leaders, right, that, that do that kind of work.

Steve Swan [00:12:28]:
And I wasn't sure if that's something that you get involved with, but it is, it sounds like.

Richard Bendis [00:12:31]:
Yeah, I mean, basically you, what you do would be complimentary because I wouldn't say that our sweet spot is the IT world, even though we have access to IT professionals.

Steve Swan [00:12:42]:
Right.

Richard Bendis [00:12:42]:
Our sweet spot really is the, you know, the pharma, the bio, the medical device, the vaccine worlds. And what you're seeing is all of the companies today and entrepreneurs need IT services. And if you look at where AI is being used today, whether it's with a clinical research organization, whether it's look for pipeline development, right. You know, looking for market research, competitive analysis and all of those things. You know, the IT world and IT experts and people who understand AI and how to use IT today is becoming critical to almost any type of a life science business today.

Steve Swan [00:13:19]:
Oh, it is. And it's even a lot of the boards and a lot of the heads of these companies because we're not talking huge companies, right. There's not a ton of people inside them. So the heads of the, you know, the board of directors or whatever, they want to know, you know, what's my exposure.

Richard Bendis [00:13:33]:
Right.

Steve Swan [00:13:34]:
With the AI and such. So the governance, the security, the data protection, all that stuff. And there's folks that handle that as well. Right. And that they do fall on the IT side as well.

Richard Bendis [00:13:43]:
Yeah, they fall on the IT side and you know, basically. So when those needs are identified, if we don't have the bench strength to address it, then we'll Try to find other partners we can work with who have that expertise to, to bring into the company. So our goal is to be in total control of everything that's going on with that. That company is to find the right resources to help them progress what they're trying to do with their business, protect their intellectual property and have the security that they need as well as basically look at sort of the IP protection that's necessary.

Steve Swan [00:14:18]:
Sure. To make them as successful as they can be and prop them up as best you can based on your expertise. Which brings me to you, your expertise. How did you get this started and what, what's your background like to, to, to, to launch something like this?

Richard Bendis [00:14:33]:
Well, you know, Steve, your listeners probably can't see me, but I'm old and, and, and you know, I guess with age comes experience and a lot of different things. But I started my career many, many, many years ago in large corporations. Started with Quaker Roads, Polaroid, Texas Instruments, Marion Laboratories, Kimberly Services, which was a national nursing service firm. I took a healthcare IT company public on Nasdaq, which is directly in your world. And we had about 150 people. We had a dedicated turnkey pharmacy system for hospitals, materials management system for hospitals. We sort of specialized in small hospitals. And you know, and I had a whole bunch of installation people, development people, IT people, and I don't have a technical background.

Steve Swan [00:15:25]:
Right.

Richard Bendis [00:15:26]:
I have a business background. So. And basically we were able to take that public on nasdaq, sold it. And after we sold it, I created my own little. I called the, I called it a venture capital firm, but in Kansas City I was just an angel investor and was making investments in technology and life science companies. Then I got, you know, asked by the governor of Kansas to be in the Kansas Technology Enterprise Corporation Board, which is a technology based economic development firm for the state of Kansas that invested in early stage companies. I became the chairman and later became the president of K Tech and then ultimately moved on to Philadelphia, became the founder and CEO of Innovation Philadelphia, which was focused on regional economic development around technology and life sciences. Through all of this, Steve, I ended up speaking and consulting with a number of states, ecosystems and countries around the world and sort of fell into this Maryland gig.

Richard Bendis [00:16:35]:
I was speaking at the National Academy of Sciences on what it takes to build the vibrant life science or bio cluster in your region. And somebody from Johns Hopkins heard me and said, we've been trying to do this in Maryland for many years. Come down and talk to us and see what we can do. And then that's sort of I came in as a consultant when we created Biohealth Innovation. I said, I'll help you find a president. And I had no desire to move to Rockville, Maryland or take on another gig at this stage of my life. But what I found was more assets in that region that were underutilized than almost any other place I'd been in the world. When you have the NIH and the FDA in your background and you have CMS and HHS and you have all of these companies and academic institutions.

Richard Bendis [00:17:24]:
So here I am 15 years later, see, still a CEO of Biohealth Innovation. Only because we still haven't reached our full potential yet and I'm still motivated to do what I do on a daily basis. And more importantly, I have a team of 40 full and part time people across the country that makes my job very easy because they're all professional and they are top notch at what they do.

Steve Swan [00:17:47]:
Very cool. That's awesome. I like that. And so you've been doing your thing there for 15 years, right? So you've seen companies come, companies go, companies merge, companies sell, so on and so forth, right? Throughout all that time?

Richard Bendis [00:18:02]:
Yeah, basically. The other thing as a nonprofit, and this is something that I've done over the last 30 years in all of the nonprofit organizations I've been involved with, is we have a for profit subsidiary that's BHI Management Inc. And we provide sweat, you know, sweat equity services with fractional people or spin outs or startups. And we don't have a venture fund, but we've been able to obtain a sweat equity in about 27 companies in our for profit subsidiary. We've had six exits which one of them was a seven figure exit, which is very nice for a nonprofit organization. And so BHI functions basically almost as an independent nonprofit consulting firm like you would see with Booz Allen or McKinsey or Deloitte or other firms that are out there and on a fee for service basis. So we don't have the luxury of getting a lot of grants to operate bhi. We have to make our way by actually providing revenue to support our team that we have and the services we're providing.

Richard Bendis [00:19:14]:
And we've been very fortunate to be able to generate significant revenues over time. And we have some very nice contracts now with NIH and ARPA H some universities that utilize our team, pay for our team to be engaged with them and it provides us a nice margin to be successful and sustainable today.

Steve Swan [00:19:37]:
That's great. That's awesome. When I was in college 150 years ago I had no idea what biotechs were and I took a, a job because I wanted to pay. I had a $300 credit card bill which was just killing me. Right. So I had to get rid of that before I graduated. So I joined a, I was in Boston and I joined, I, I, I, I, I took an odd job with this ice company and you know, I don't mind getting up early. Any college kid doesn't want to get up early.

Steve Swan [00:20:09]:
So I'm, I'm at work at three in the morning and I work from three to six driving around Cambridge, Mass. Delivering dry ice to all these labs, the schools and the biotechs and stuff like that. It was pretty cool, it was fun. And I had no idea again what a biotech was then, you know what, you know, I've come and here you.

Richard Bendis [00:20:27]:
Are today doing biobites.

Steve Swan [00:20:28]:
That's it. Yeah, you know.

Richard Bendis [00:20:30]:
Yeah. So I mean you're not a trained PhD either, just like I'm not, right?

Steve Swan [00:20:34]:
Right. Yeah, no, I'm way far from it. That's my wife, you know, so.

Richard Bendis [00:20:39]:
Yeah.

Steve Swan [00:20:40]:
So now from an industry perspective, what do you see, you know, right now? Meaning what's, what's kind of what are the trends? It's just sort of, I just, you know, because you see a lot of different things, right? I know they're geographic, but I think they're probably also a representative of the industry as a whole. Right. So what are you seeing as, as the trends? You know, because I hear from some investors and I hear from some people that you know, the opportunities are still out there for small companies if investors want to get in and such. It's just this whole downturn that we just went through when interest rates spiked, kind of smoked out some of the, some of the ones that weren't going to make it anyway eventually. Right. So some of these investors are starting to say to me, well valuations are going up because there's fewer opportunities, but we all still have money. Are you seeing in here and that, tell me what your read is on all that.

Richard Bendis [00:21:34]:
Well, I'm just going to say in my over 50 year history working the last 3 months have been the most challenging in my life and it has to do a lot with what's going on that we have no control over. And basically what's going on with this current administration where nobody can plan long term, where the priorities change day to day and at this particular point in time it is just unbelievably challenging to be an emerging early stage life science or bio Health entrepreneur. Because what's going on in the investment community is the VCs and private equity firms, family offices would like to see some returns on their investment right now. If you invest in an early stage bio, of course, you know, it's going to take 10 to 15 years before they might be able to get a product in the market and a lot of money and some of them have a lot of things in their portfolio right now that need follow on capital. So there's not as much investment going into early stage or pre seed or pre series A life science companies as there were before because they need clinical stage assets to invest in that are phase one, phase two clinical trials, which are closer to getting to commercialization or being attractive to the larger firms to acquire. And you know, the IPO market's very slow right now, the early stage investor markets very slow. I just saw some statistics from the PitchBook and NBCA the first quarter, this is probably good for you. 77% of the dollars invested went into AI deals.

Richard Bendis [00:23:20]:
77%, you know, in 66% of that happened in San Francisco. And then, then you look at the Boston and New York. And so if you're outside of those three primary markets and you're not doing anything in AI or AI related in the first quarter, you were sort of on the outside looking in. You know, it's sort of the same kind of money. I saw like $5 billion being invested. But when you have 77% of the dollars going into AI related deals, you know, that basically says that you've got a life science company that's involved in large or small molecules that doesn't need AI or machine learning or quantum computing computing right now. And you're not at phase one clinical trials. You're, you're struggling to get money right now.

Richard Bendis [00:24:08]:
The other ripple effect is, you know, public money. If you look at what's going on with SBIR grants and you look at what's going on with some of like the ARPA H investments, when you talk about potentially an NIH budget which is proposed and it's not approved and there'll be significant date going from 47 billion to $27 billion, reducing 27 NIH institutes down to eight institutes and you have, you know, a director of HHS who has his own opinion of what should priority should be in. Like he just said, well, we'd like to come up with a cure for autism by September, but doesn't believe significantly in vaccines. So you know, if you're in the vaccine business right now, you're saying, what the hell do I do? So, and that's for investors as well. It's for. But then take a look at that NIH money that is going to academic institutions, that 95% of the companies that have gotten things commercialized in the pharmaceutical world over the last 10 years receive some public money. Okay. And a lot of that did research at nih, joint research or with an academic institution.

Richard Bendis [00:25:30]:
So if the overall budget is going to go down, academic institutions are going to redo, receive less money for early stage research. There's going to be potentially less money for sbirs, there's going to be less money in overall investment through the life science world through nih, which is the largest life science investor in the world and has been for many years. It's really challenging right now to say where do I place my bets? And if I'm an early stage company, what am I going to do to leverage other resources to survive through this little period? It might be three and a half years, I don't know how long it's going to be. And you know, how do we find a way to navigate? Because I've heard major clusters that, you know, it's beautiful to be in Silicon valley and Route 128 up in Boston. But if you have all of these pre series A and pre clinical companies all looking for money at the same time and the investors have to take care of their existing portfolio and that their people in their existing portfolio need funded, that means that's where the priority is going to be rather than taking a lot of new investments. So that's why I'm saying right now the, the, the challenge over the last three months from an investor standpoint, I think and for early stage life science companies has been one of the most challenging times that I've gone through in my career.

Steve Swan [00:26:57]:
Well, yeah, and I mean it's, it's obviously it's tough all the way around. It's tough in our industry too. You know, when you talk about AI, just to circle back to that, you know, I think you said 80% of the, of the, you know, funds are.

Richard Bendis [00:27:09]:
87% of the investments in the first quarter of 2025 went into AI related deal.

Steve Swan [00:27:16]:
Right. And what I've read is, I've read two different things. 80%, somewhere between 70 and 80% of AI projects today fail. So you know, I think that a lot of folks, well, they don't know what they don't know. Right. And lots of it, most of it, when I talk to my CIOs and I have folks on my podcast. It comes down to the data, right? You know, if your data is not ready to be consumed by AI or be used by AI, you're just, it's going to fall flat in its face. It's not going to get there.

Richard Bendis [00:27:44]:
Yeah, but at 78% failing is no different than typically what happens with most entrepreneurs. Correct. You know, so I mean, to be able to get that survival rate past five years of existence, you know, is you're talking a very small percentage to be able to survive in early stage high risk technology or life science projects. So. Yeah, and the other thing is, I think what we're going through, if you remember, we had the nanotechnology era. Yeah, we had the big semiconductor era with, you know, big, big computers. We had biotechnology era, which isn't over. But you know, everybody, everybody wanted to be in nanotechnology.

Richard Bendis [00:28:23]:
Everybody wanted to be in a semiconductor business. Everyone wanted to be in the biotechnology business. Now everybody wants to be in the artificial intelligence.

Steve Swan [00:28:29]:
Correct.

Richard Bendis [00:28:30]:
Okay. So I look at AI and all of those other things we just talked about as enabling technologies should be, should be. They should be enabling. But at the end of the day, how many of the AI, machine learning or quantum companies have their own products that they can market and sell? Okay. Rather than providing services to other people or being integrated into other people's operations. And that's the big challenge right now is I think investors and companies, unless you have a pathway with your technology to come up with proprietary end user products that you can sell, then you become an enabling technology and it becomes a little bit more challenging to understand how to use it. Okay, so, and that's where I think everybody's confused right now. You know, most CEOs are not technology oriented or IT oriented.

Richard Bendis [00:29:29]:
They're dependent on their IT teams to advise them on what to do.

Steve Swan [00:29:33]:
That's why I mentioned those boards of directors and those CEOs are worried about their downside, the governance, the what's my downside of this AI thing? What's it going to expose me to?

Richard Bendis [00:29:42]:
Sure.

Steve Swan [00:29:42]:
About the upside. I read about the upside. My buddies are talking about it on the golf course. But what's my downside? How do I, how do I protect against my downside?

Richard Bendis [00:29:50]:
You know, sure, it's the greed and the fear. Sure, it's the greed of how do we, how do we maximize getting profits or cash or returns out of this thing, but also it's the fear of losing out.

Steve Swan [00:30:01]:
Those are two things that run Wall street, right? I mean, Warren Buffett Always said, you know. Right.

Richard Bendis [00:30:05]:
So, yeah, I mean, that's why Buffett may get into IA 10 years from now. He might not get into it today.

Steve Swan [00:30:10]:
Right.

Richard Bendis [00:30:11]:
It took him a long time to get into Google and Amazon and the technology stocks. He didn't do it when they were just emerging.

Steve Swan [00:30:18]:
No, no. Now is there, as we're talking about this, and maybe I'm, maybe I'm completely off the wall, but are there any proposals or any thoughts or any articles or anything about the government getting involved, having an equity stake in some of this stuff and participating in the upside? Or is that, is that completely crazy? Am I just, Should I be shot right now?

Richard Bendis [00:30:41]:
No, I think, you know, to be honest with you, there's nothing wrong with the government getting a return on investment for what they invest in. And you know, if I was running the SBIR program 40 or 50 years ago, I would have found some way to get a return on the investment. Don't want to control the investment that is made in these early stage companies. I just want to be a passive investor. But if it's successful, how do we generate royalties and licenses? And you know, NIH has done some of that with royalties and licenses.

Steve Swan [00:31:15]:
Well, they have. Okay, okay.

Richard Bendis [00:31:16]:
Oh, they have, yeah, they've gotten some returns, but they could have generated significantly greater returns. Just like universities. It took them a long time for universities to take equity in companies or spin outs that they were creating because they were generally in the royalty and the license game.

Steve Swan [00:31:32]:
Right.

Richard Bendis [00:31:33]:
And one of the things we did back 30 years ago at Kansas Technology Enterprise Corporation, we had a royalty portfolio of 150 companies and then we converted it to taking equity in companies.

Steve Swan [00:31:46]:
Oh, really?

Richard Bendis [00:31:47]:
We were really one of the early economic development state programs to take equity.

Steve Swan [00:31:51]:
Very cool.

Richard Bendis [00:31:52]:
And so that was something that in everything that I have done from a non profit perspective, we've always had a for profit component related to it, just like we have at BHI or Innovation Philadelphia or K Tech in those days and took equity. And the equity is there to supplement the income and operating capital needed for nonprofit organizations.

Steve Swan [00:32:18]:
Nonprofit. So that's where the money comes. Okay.

Richard Bendis [00:32:20]:
So the key is, although the federal government primarily is like a nonprofit entity, and one of the things I'm hearing from this administration is there might be a way to look at generating some equity returns on the investments that they may make in the future on some of these programs. And I don't see anything wrong with that.

Steve Swan [00:32:42]:
No, I mean, listen, especially if people are looking at this saying we're spending all this money, we're not getting anything back. We're the first ones in, so to speak. Right. To get these things going. Why not? You know. And how many are going to make money? 2 out of a hundred? You know.

Richard Bendis [00:32:58]:
Very few. Yeah, I mean, basically, you know, look at the traditional portfolio of a venture capitalist and you got, you know, very few grand slams. You have a few home runs, mostly you have singles. But at the end of the day, 50% of what you invest in is not going to show anything at all.

Steve Swan [00:33:13]:
Right.

Richard Bendis [00:33:14]:
So if you get your money back, you're going to be very happy if you break even.

Steve Swan [00:33:17]:
Right.

Richard Bendis [00:33:18]:
And actually venture capitalists, you know, today, they still like to get their long multiples of 10 x's, but getting 1 and 2 and 3 x's today is not a bad deal for people who are doing high risk investments.

Steve Swan [00:33:30]:
But you're going to get a lot of people saying, is the government supposed to be in that kind of.

Richard Bendis [00:33:33]:
Yes. Would the government be in that? Well, the key is if they're going to take some of the highest risk by making some of the early investments in placing some of the earliest bets that people in the private equity of the venture capital world aren't willing to take at this particular point in time, then why shouldn't they share in the rewards?

Steve Swan [00:33:52]:
Sure. Okay.

Richard Bendis [00:33:53]:
But the government should not be in control of these businesses. No, they possibly. They shouldn't be on the boards of directors, they shouldn't help direct these businesses. But there's nothing wrong with them being a passive investor to get a return.

Steve Swan [00:34:05]:
On investment and participate in the upside fully understanding that this can go to zero and it is what it is and it's part of the investment landscape. Right?

Richard Bendis [00:34:14]:
Yeah. So I would look at it as incremental returns, not something that, you know, you are planned. But there's no reason for them not to be able to share in some of the successes. But you know, the, the federal government isn't going to be like a true venture capitalist. But there's nothing wrong with them to find some way to generate some type of return.

Steve Swan [00:34:36]:
I almost view that like again, I'm being crazy as flood insurance. The government does flood insurance. Right. They're the only ones that'll underwrite it. An insurance company is not going to underwrite it because the only people that want it are the people that need it. So they're going to take a hit on that. But they got to hold up the bottom, meaning the folks that are getting flooded out. Right.

Steve Swan [00:34:52]:
So they gotta, they gotta backstop that. And that's kind of what the government would do with these investments is backstop the ones that nobody else is going to invest in anyway. And if they, like you said, at fiscal years, they break even. We're good, we're good, you know?

Richard Bendis [00:35:05]:
Yeah. I mean, basically at the end of the day, if you have a $47 billion portfolio at NIH, we're not saying that all $47 billion of that is generating a return.

Steve Swan [00:35:15]:
Right.

Richard Bendis [00:35:16]:
Because their mission at NIH is to improve the quality of health for people around the United States. At the end of the day, when you're trying to improve that health, everything doesn't mean that is going to become commercial. So a lot of the bets they're placing there and they have a very stringent review system to decide what they invest in at the university level in this very early stage research with their review panels that they have. Basically a certain amount of this will never ever see the light of day in the commercial market. But at the end of the day, we need to continue to do this high risk research, especially in diseases that what you'd classify orphan drugs that might have a small population of people who are sick or may die from a certain disease. Does that mean we should ignore them? No. But you're not going to see GlaxoSmithKline or Novartis or Pfizer investing a lot of money in something where there's only a thousand people in the United States that are going to die from a certain disease because they can't generate a return from it. But should we ignore those people? No.

Richard Bendis [00:36:20]:
But I mean, is there a role for government there? Yeah, there is.

Steve Swan [00:36:23]:
Yeah. Again, and that's what I mean by backstopping and helping these people out doing a public good, but you know, with their investments, you know. So now back to your organization. I think you have some events coming up, right. Don't you have some things coming soon?

Richard Bendis [00:36:38]:
As I mentioned before, we're a nonprofit, in essence, a non profit consulting firm. So we don't really want to compete with tech councils or trade associations that have members. And a lot of their revenue comes from putting events on for their members. So since we're not a member organization, I have a 25 member board. And that 25 member board is primarily made up of people from industry who all make a contribution to bhi. But the contribution we get from our board members is, represents 10 to 15% of our overall budget. It's very small. So what we have put on, and this will be our 11th year, is something called the Biohealth Capital Region Forum.

Richard Bendis [00:37:21]:
And by the way, the Biohealth Capital Region was a term that didn't exist eight years ago. But we had a number of our board members who were with large pharma companies like AstraZeneca who said we don't really, you know, we have the, the DMV, the, you know, dare, Delaware, Maryland, Virginia, which everybody calls the Washington D.C. area. But we really don't have a brand that's accepted around the biohealth industry. So we brought about 50 people together to meet for six months again and we came up with a brand. And you know, it was hard to get away from Biohealth because everybody liked the term of the convergence capital. We have a double work meeting there with capital. We have DC as the capital and we also have a need for capital.

Richard Bendis [00:38:06]:
And we wanted to do something that was regional because really you have the Potomac river, you have bridges, you have state lines, county lines, city lines. And there wasn't a great deal of cooperation between Maryland, D.C. and Virginia. So we created the Biohealth Capital Region about eight years ago. And BHI was asked to be sort of the intermediary to help nurture that brand for the region. Okay. So we created 11 years ago the Biohealth Capital Region Forum to bring people together. We originally did it at AstraZeneca and we did it there until Covid hit.

Richard Bendis [00:38:44]:
And then AstraZeneca didn't want large groups on their campus and we understand that. And then we did it virtually for two years and then we had a hybrid version about three years ago, half virtual and half in person. But the last three years we've been in in person at US Pharmacopoeia, which is based in Rockville, Maryland, and they have a nice amphitheater. They do work really around standards on over the counter medicinals in about 152 countries around the world. They're on our board of directors and they have opened up their space. So we're going to have the 11th form September 23rd through 25th. We average between 700 to 11 people over a three day period. We don't charge anybody to come to register for the event, which is also unique, which we have the ability to do because every year I have to hold my hand out to raise about $200,000 in sponsorship, Steve, to fund it so everybody can attend for free.

Richard Bendis [00:39:49]:
So we have a day and a half thought leader conference. On the 23rd and 24th, we have a Shark Tank competition which we call Crab Trap because of the Maryland crabs. And we do that on the second day on the 24th, we'll have five companies who are selected out of 50 to 60 applicants. They get 10 minutes of fame to pitch in front of JP Morgan and Tedco. Virginia bio.

Steve Swan [00:40:15]:
Well, that's exciting.

Richard Bendis [00:40:16]:
Wilson Signsini some of the major firms that are the judges. And this year we're going to add a new component. We're going to have five international companies as well because we have a lot more people internationally that are interested in our region. So we had Israel, South Africa, uk, France, Sweden. There's a whole delegation from Scandinavia coming this year. So we're going to have five competitors in the crab trap competition on the second day internationally. And then on the third day we have an investor conference with 100 companies that are invited and 50 investors. They do one on one meetings.

Richard Bendis [00:40:52]:
There's no charge to the investors, no charge to the companies and companies looking for money and investors who have money. So September 23rd through 25th, Rockville, Maryland, Biohealth Capital Region. Free to attend. We'll have more information on our website, which is biohealth innovation.org for people to get information. Registration is not open right now, but the theme this year you're going to love, it's called the Biohealth Capital Region where artificial and human intelligence converge.

Steve Swan [00:41:24]:
Nice.

Richard Bendis [00:41:25]:
So it's, it's basically AI is big this year. Human intelligence, AI doesn't work without humans behind it. The AI world is something that's in the sweet spot of what you do, Steve, with your organization. So it's where human, where artificial and human intelligence converge. And we think it converges very well in the Maryland, D.C. and Virginia area.

Steve Swan [00:41:50]:
Awesome. That's great. And so when will registration be open?

Richard Bendis [00:41:54]:
I'm going to have to ask Andy, who's not on this with me, but I think probably in the next 30 days it'll be open.

Steve Swan [00:42:00]:
Okay.

Richard Bendis [00:42:00]:
And we're still soliciting sponsors. So anybody that would like to be a sponsor for this event, we'll generally have about 40 to 50 sponsors who are sponsoring it. All of them get very, very good visibility. We also have a VIP dinner on the September 23rd on a Tuesday night at Ruth Chris for 100 people by invitation only. And it's really, you know, sort of a thought leader, sponsor, speaker and sort of shaker and mover dinner that we have once a year, which is very vibrant.

Steve Swan [00:42:31]:
I wish I could make that.

Richard Bendis [00:42:34]:
Well, I know you told me you're going to be over in Munich, Germany at a. At.

Steve Swan [00:42:41]:
Yeah, big extended family trip, so.

Richard Bendis [00:42:44]:
Well, I don't know. We'll have next. Well, I don't know. If you continue to go back to Munich, you might miss us every year, but.

Steve Swan [00:42:49]:
No, I'm not. I've been. I'm not. I don't need to go out. I will see, but I don't think.

Richard Bendis [00:42:53]:
Well, send somebody from your firm. That would be fine.

Steve Swan [00:42:56]:
I could do that, too. Yeah. Yeah, absolutely. Well, cool. That's great stuff. Well, thank you very much. Anything else you want to cover? Because I have one last question I always ask of all my guests, but.

Richard Bendis [00:43:06]:
Okay. Well, I think we sort of covered the gamut. I think the key is there's no easy answer right now. I think we all have to be persistent and patient with what we're doing, recognizing, you know, it's a very fluid environment that we're dealing with. The biggest challenge and why it's been challenging for me over the last three months is how do we protect our people when we don't have control of our own destinies and our people don't have control of their destinies because of that? It's been very challenging. So that's where I'm saying is we're learning to become a little more patient. We have to be extremely diligent and persistent with what we're doing with our businesses. Now.

Richard Bendis [00:43:48]:
We may not agree with everything that's going on around us, but we need to focus on those things that we have control of and find ways to support the entrepreneurs, the emerging businesses that are going through all of the challenges just like we are, and find ways to assist them right now.

Steve Swan [00:44:04]:
The current environment, to me, I was. I was making this analogy to somebody the other day where it reminded me a lot of when Covid first started. And. And I'm. I'm going to make the same analogy I used to then. Where part of what we do is when we're. We, we, we, we in our journey to help somebody find a new career opportunity. Right.

Steve Swan [00:44:23]:
We walk down a path with them and we're. We're logical, both of us, the whole way down the path, and we make sure everything's working each step of the way. But if we. But if fundamentally the path that we're walking on now, we can't even trust it, we don't know what that pass. If my next step's going to actually be supported by that path, you know, all bets are off. All bets are off. You know, that's what happened during COVID and that's what's happening right now.

Richard Bendis [00:44:49]:
Yeah. And, you know, we came out of COVID too.

Steve Swan [00:44:51]:
We did.

Richard Bendis [00:44:51]:
I mean, the key is we, you know, America and the United States is very resilient. The people are very entrepreneurial and resilient. So there's always going to be peaks and valleys in our lives and in our businesses and our careers. And we know that we're going to come out of it. We just have to find a way to be patient, persistent, and protect as many people as we can.

Steve Swan [00:45:12]:
And animal spirits will take over eventually. Greed and fear, right? Greed and fear. We're in a fear cycle. We're in, in fear.

Richard Bendis [00:45:18]:
Yeah. Well, I mean, it's a. Greed and fear because right now you have to be careful because there's a lot of greedy people that are going to take advantage of this, this window of opportunity right now. So you want to make certain you pick the strategic and the right partners to be with during this period.

Steve Swan [00:45:32]:
Yeah.

Richard Bendis [00:45:32]:
People are going to stick with you when you are done. You need good partners, investors, board members that are going to stick with you right now even though you might have a down cycle.

Steve Swan [00:45:41]:
Correct. You do. You do.

Richard Bendis [00:45:43]:
Yep.

Steve Swan [00:45:44]:
And that, that's what again, I, I'm going to go back to Warren. That's what Warren would say. You know, get, get greedy when others are fearful and get fearful when others are greedy. You know, so. But you, to your point, you got to pick the right folks, the right partners to make sure that you're, you're going to continue down that right path.

Richard Bendis [00:45:59]:
So what's the last question you ask everybody?

Steve Swan [00:46:01]:
So I love live music. I go and see bands. I go and see live music. My question to my guests is, what would you say if you've, if you've seen live music? I haven't found anybody yet that hasn't.

Richard Bendis [00:46:15]:
Sure.

Steve Swan [00:46:16]:
But what would you say has been your favorite live performance by an artist at any point in your life?

Richard Bendis [00:46:23]:
Well, it's easy. I'm a Neil diamond fan. And if they say, what music would you play 24 hours a day? I'd play Sweet Caroline because I love it. I saw the show basically a Beautiful Noise on Broadway, which is Neil Diamond's Life. I seen him live. Funny thing is, we were over in Dublin, Ireland. He had a concert over there. But we.

Richard Bendis [00:46:47]:
I was over there with my wife on a little vacation. We're staying at the Holden Hotel. And guess who's sitting at the next table?

Steve Swan [00:46:53]:
Seriously?

Richard Bendis [00:46:54]:
Just seriously. So.

Steve Swan [00:46:55]:
Wow.

Richard Bendis [00:46:56]:
I was just like a groupie. I said, you're beside yourself. I told my wife, I said, you know, this is ridiculous, but I'm going to go Say hi.

Steve Swan [00:47:04]:
I'm about to make a fool of both of us. So pay the bill, get ready to get.

Richard Bendis [00:47:07]:
And I did it. And I. I don't have any regrets whatsoever of being able to say hello to somebody that I've admired in his music for.

Steve Swan [00:47:15]:
That's awesome. Have you ever been to Fenway to see the Red Sox play?

Richard Bendis [00:47:19]:
I've been to Fenway in the seventh inning where they do Sweet Caroline.

Steve Swan [00:47:23]:
We were there last Saturday. My daughter ran the marathon last week in Boston, and we went to a Red Sox game.

Richard Bendis [00:47:28]:
Right.

Steve Swan [00:47:28]:
Crazy.

Richard Bendis [00:47:29]:
Yeah, it's fantastic. But basically my family knows it. There's a restaurant here at the Jersey Shore where I go to the. The guy who performs there knows I'm a Neil diamond fan. And before we leave that night, he has to play Sweet Caroline.

Steve Swan [00:47:42]:
That's awesome. Yeah, that's awesome. That's great. Yeah, you got to that pretty quick. Some folks hem and haw they think about it? No, thinking you were.

Richard Bendis [00:47:49]:
Oh, no, no, no, no, no. That. That. That's no question about it.

Steve Swan [00:47:53]:
That's an easy one for you. Well, Rich, thank you very much. If something happens with my plans and they change, I'll make your event. You know.

Richard Bendis [00:48:01]:
No, I hope you go to Munich. Even though we're going to have beer and wine and libations for people at our dinner and the receptions that we have, I think your environment will be a little more festive.

Steve Swan [00:48:14]:
Fingers crossed, right?

Richard Bendis [00:48:15]:
Yeah, fingers crossed.

Steve Swan [00:48:17]:
Well, Rich, thank you very much for your time. For anybody checking us out, go out to Spotify, YouTube, Apple, you know, follow us, rate us, listen to the podcast. Thank you very much. Thanks, Rich.