Fairly or not, Steve Burrill’s reputation in Minnesota will rest a great deal on whether he can deliver the $1 billion investment fund to back the Elk Run BioBusiness Park in Pine Island.
He says he’s close, but in this global economy, nothing is a done deal until the documents are signed and the check clears the bank.
However, fund or no fund, Burrill said the state already has benefited from his interest and his checkbook. In an exclusive interview with MedCity News, Burrill said he has provided much-needed early stage capital and expertise to Minnesota-related companies.
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“We don’t need that fund to be successful in the state,” Burrill said. “Unfortunately, that has become a flash point for a lot of people.
“We’ve made an exceptional commitment to the state,” he continued. “We’ve opened up a Minneapolis office. We continue to work on a number of deals with Mayo Clinic. People forget we mentor a lot of companies. These things don’t get a lot of visibility, but we add a lot of value.”
For example, Burrill & Co., based in San Francisco, has invested $5 million in Segetis Inc., a green chemical company in Golden Valley, Minnesota, and $8 million in Nora Therapeutics in St. Paul.
Burrill said his investment helped Nora attract an additional $17 million from Prospect Partners and Vivo Ventures. The biopharmaceutical startup is developing therapies to help women suffering from repeated miscarriages and in-vitro fertilization failures to get pregnant. However, the company has not yet decided whether to remain in Minnesota.
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Meanwhile, biofuel maker Gevo, which is funded by both Burrill and Khosla Ventures in California, recently spent $20 million to acquire a corn-based ethanol plant in Luverne, Minnesota, from Agri-Energy LLC. Gevo plans to spend millions upgrading the plant.
Burrill said he will invest at least $5 million-to-$7 million in an undisclosed Minnesota diagnostics company. That startup, which wants to raise about $10 million-to-$15 million, hopes the deal will close by the end of the year. He also said he’s trying to help an undisclosed San Diego startup raise money so it can move to Minnesota and open a facility — a move that would create up to 20 jobs.
For most of his career, Burrill has enjoyed a sterling reputation for his biotechnology expertise. Named by Scientific America as one of the country’s top 50 visionaries, Burrill often gives keynote addresses to important healthcare conferences and rubs shoulders with top industry officials.
But he has been stung by his experience with the Elk Run fund. “I’m surprised at the negativity. I am surprised at the [expectation] we will fail,” Burrill said. Hearing comments like, ” ‘I told you so. It was stupid. We shouldn’t have tried.’ We’re not used to that,” he said.
“The public has an immediate expectation, but [the fund] has not gone as fast we thought,” he continued. “I’m dismayed that it took a longer time than we expected. But we’re trying to so something bold and different. People don’t write these checks so easily. It takes time.”
Here’s my take on Burrill. If he feels slighted, he has to share some of the blame. After all, when you roll into town and promise a $1 billion fund within a year in a down economy, people are bound to be skeptical. They become downright edgy when that fund does not materialize on schedule. Perhaps if Burrill set proper expectations, the criticism would not seem so severe.
With that said, Burrill does deserve a good deal credit for putting Minnesota on the map in the minds of investors who ordinarily would ignore it. Early stage money is so rare in this state, that we should welcome Burrill’s money and expertise with open arms.
Whatever you think about Burrill, his is a big name in biotech circles, and that kind of clout is desperately needed in Minnesota. In the end, are we better with or without him? The answer is fairly obvious.
And should Burrill succeed in raising the $1 billion fund, that question becomes irrelevant.
