NewHavenBIZ

14 n e w h a v e n B I Z | A u g u s t 2 0 2 1 | n e w h a v e n b i z . c o m A bove the conference table at Elm Street Ventures hang a series of images of scientists at work — the literal "poster children" for this venture-capital firm's success. At center is Arvinas, the growing biotech firm with a market capitalization of $3.3 billion that promises to double its New Haven workforce in the next five years. At le is P2 Science, the Woodbridge green chemistry company that is drawing interest from beauty giants worldwide and operates a manufacturing site in Naugatuck. But the wall at Elm Street's office would have to be much longer to take in the accomplishments of the firm, which has been instrumental in bringing hundreds of jobs and hundreds of millions in investments to New Haven. "ere are a lot of much larger venture companies out there, but there are few that are boutique, more retail, willing to spend the time in building those deep relationships with the local community," said Arvinas founder Craig Crews. "I view Elm Street playing a very critical role in the local biotech ecosystem." Crews' own path to starting Arvinas highlights Elm Street's role as a catalyst for biotech growth. A research scientist and professor at Yale, Crews had started a company in California in 2003 based on his pioneering work in harnessing the body's own protein disposal system to fight disease. e company was a success, but Crews was looking for new challenges. A few years later, Crews met Rob Bettigole, Elm Street's founder and managing partner. e two would meet occasionally at Caseus restaurant and discuss turning his work into additional enterprises. "He was very encouraging of starting something here," Crews said. "He really was a major driver in getting me thinking about doing something here in New Haven." Elm Street Ventures (ESV) co-led Arvinas's first Series A funding round in 2013 with Canaan Partners, 5AMVentures and Connecticut Innovations, raising $15 million for the fledgling company. Arvinas is now the firm's biggest success story and a beacon to other scientist-entrepreneurs looking to start companies. "It's the earliest stage ventures that have always appealed to me the most," said Bettigole, who launched ESV in 2006 with an initial $25 million fund. Getting results Aer a career at major venture funds in New York and time spent growing and selling his own startup, Bettigole said he was inspired to work in New Haven aer learning of Yale's mixed record on entrepreneurship at the time. While raising capital for the first ESV fund, Bettigole highlighted the fact that Yale affiliates were launching only four companies a year at the time, compared to 17 a year for MIT affiliates. Executives at the Yale Investments Office, who manage the university's $31 billion endowment, wanted to change that and have been the largest investors in ESV. "ere are a few different reasons why we're excited about the partnership with Elm Street," said Matt Mendelsohn, a director at the Yale Investments Office. "Number one is confidence in their ability to generate really interesting results that make a difference in the bottom line of the university." Economic development in New Haven is the second reason, and third is "opportunities coming out of the Yale ecosystem for professors and researchers." "All of that has contributed to a really interesting, dynamic environment where if you're a professor or researcher you have a lot of resources to help you build," Mendelsohn said. "ose companies then stay in the area and then generate a really nice feedback loop. at talent oen becomes the next generation of entrepreneurs who start that cycle over again. We're really excited about all that progress." Yale's stake in the fund has helped bridge the gap between early-stage startups and later investments by bigger firms. ESV's initial investments in new companies range from $500,000 to $1 million. If a company does well, ESV may kick in an additional $2 million to $2.5 million over multiple rounds. When startups grow to the Arvinas level, ESV steps aside for the VC giants to flood them with hundreds of millions in cash. Elm Street has two full-time employees and four part-time venture partners and recently closed its second fund, topping out at $32.5 million. ey have already made eight investments. Since its founding, ESV has invested in 28 companies and has $57 million in funds under management. "ere really needed to be a catalyst, ... to be a professionally-managed fund that was focused here," Bettigole said. Now, he celebrates a newer player that can step in at an even earlier stage: the Blavatnik Fund for Innovation at Yale that offers fledgling entrepreneurs grants up to $400,000 to do research that may translate into a company. "e availability of that money has been tremendous," Bettigole said. "Science takes time. Some things are early but there's more and more of them." Seeding the growth of an ecosystem "ey've definitely been a huge part of why we are where we are," Usha Pillai, a biotechnology strategist for the Economic Development Corporation of New Haven, said of ESV. "Having them locally helps build stronger ties, it builds that network, which is so important for us." e momentum created by recent biotech success stories can help overcome Industry Catalyst Craig Crews Matt Mendelsohn By Liese Klein Elm Street Ventures helps power New Haven biotech boom Usha Pillai Elm Street Ventures Managing Partner Chris McLeod (left) and founder and Managing Partner Rob Bettigole invest to bring fledgling companies to the next level. PHOTO | GARY LEWIS

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