Stem Cell Start-Up Fate Gets $12 Million

Fate Therapeutics hopes to use stem cells to fix damaged tissue; the start-up just received $12 million in A round funding from ARCH Venture Partners, Polaris Venture Partners, Venrock, and OVP Venture Partners. The company's scientific founders hail from the University of Washington, Harvard, Stanford, and the Scripps Research Institute.

Fate says it'll have offices in both Massachusetts and Washington (the company was incubated in the Seattle offices of ARCH), but until a CEO is hired, they won't have a decision about where the HQ will be.

From the Seattle Times coverage:

In Seattle "we're able to attract money to great ideas," [ARCH founding partner Robert] Nelsen said. "The hardest thing is finding the right team and the right CEOs."

Fate will work on drugs that cause dormant adult stem cells to rebuild damaged tissue, as well as drugs that reprogram mature adult cells into stem cells that can repair ailing organs.

The therapies could help treat Down syndrome, Alzheimer's and Parkinson's diseases, as well as repair tissue after heart attacks, infections or transplants. Stem cells could also help fight certain types of cancer.

Mass High Tech adds:

The firm aims to develop chemical-based, or small molecule, drugs intended to "awaken" stem cells in the body to combat diseases and regenerate tissue. Its other molecules would reprogram adult cells to an embryonic state. None of the firm's treatments would be derived from embryonic stem cells, the company says.

Other local notables involved in Fate Therapeutics include Massachusetts Institute of Technology professors Robert Langer and Ram Sasisekharan, both of whom serve on the firm's scientific advisory board.

Feinstein & Fleming: Dynamic Small-Cap Duo?

I've been curious about what blogger and former VC Michael Feinstein has been up to, ever since I bumped into him over the summer at one of the OpenCoffee Club gatherings in Central Square. Feinstein, formerly at Atlas Venture and Venrock, is also a regular presence at the Web Innovators Group.

At the last Web Innovators Group, Feinstein was wearing a stick-on name tag that linked him to Clear Stream Ventures, and when I asked him if that was the name of a new VC firm he was starting, he told me it was a placeholder.

Things got more interesting last week, when I ran into a VC who told me that Feinstein had been to a Deloitte-sponsored lunch, and talked a bit about what he was up to.

After trying for a time to put together an early-stage fund using the Clear Stream name, Michael has now linked up with Bob Fleming, founder of Prism Venture Partners. (Fleming left Prism as part of Woody Benson's extreme make-over of that Needham firm, now known as Prism VentureWorks.) Feinstein and Fleming are apparently now working together to raise a fund to invest in small-cap public companies, using some space at the Waltham office of Foley Hoag, a law firm.

"I will confirm that we are doing something oriented around small-cap public companies," Feinstein writes via e-mail, adding that he and Fleming won't have anything to announce officially until 2008.

Feinstein did acknowledge that he'd been working earlier to try to set up a seed-stage VC firm, but that he may have missed the right moment for that: "I was probably too late compared to some of the new funds in Boston -- .406, DACE, Kepha, etc."

This will be an interesting project to watch ... and I'm eager to find out more...

Intruders.tv Videoblog

The US edition of the videoblog Intruders.tv launched in July; part of their goal is covering Web start-ups in the Northeast. (The name Intruders, editor Bruno Langlais explained to me, refers to the fact that they consider themselves outsiders -- not part of the "old boys network" here.)

They've already posted video interviews with Bijan Sabet of Spark Capital, David Beisel of Venrock, and -- their first big mistake -- me. We talked about the differences between the tech scene on the East and West coasts, and why it sometimes seems that Web 2.0 start-ups like Twitter, which are headquartered in SiliValley, get more attention and momentum than similar start-ups like Going, headquartered in Boston.

Dirty Little Secrets About VCs

After covering venture capitalists for about ten years, I've finally learned two things (I'm a slow learner):

1. They need to hear about companies before their competition. (As a journalist, I can relate.)
2. They compete fervently with other VCs to get their money into the best start-ups at the right valuation

Though they like to portray themselves as omniscient and omnipotent, they're actually quite anxious about missing the next big deal.

Blogging is still a new phenomenon among VCs here in Boston. (Jeff Bussgang at IDG Ventures has been at it the longest, as far as I can tell.)

One major purpose that blogging serves for the less-established VCs who do it is to raise their profile among entrepreneurs, to show entrepreneurs that they understand a particular space, that they are totally in sync. Older, more established VCs have a reputation, and entrepreneurs are magnetically pulled to them because of their track record, or because successful entrepreneurs make an introduction -- go see Mr. Greybeard, who's a partner at Established Venture Partners at the Bay Colony Center. They don't have to blog. (Yet.)

But the less-established VCs blog, and I suspect that is going to make them appealing to a new generation of not-yet-proven entrepreneurs with compelling ideas...and help them hear about these ideas first. On the West Coast, David Hornik of August Capital is the best example of a VC who has built his reputation atop his blog. Entrepreneurs know who he is.

I think the same is beginning to happen out here with the VC-bloggers (there's a list of them at right). The Rolodex and schmoozing and personal connections are still going to be important, but a blog is a great way to broadcast that you understand what's changing in the tech world -- both to entrepreneurs in New England and elsewhere.

What got me thinking about this was David Beisel's great post on "Seven Coming Digital Uber-trends which are Ripe for Startup Opportunities." This kind of stuff is flypaper for entrepreneurs; I know David's going to get e-mails from a bunch of start-ups saying, "Hey, I'm working on trend #2, can we set up a meeting?"