Insider #4: Nexus's $126m fund II + BCI cost estimates & predictions + commercializing neural data + more
PLUS: A new hiring board & A Summer Mixer!🍸
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1. Q&A with Jordi Parramon of Nexus NeuroTech
Nexus NeuroTech recently closed $126m Fund II. After launching in late 2023, they invested their first fund into 7 deals in 2024, making them one of the most active neurotech investors of the year. I asked general partner and co-founder Jordi Parramon a few questions about their work and worldview.
Congrats on closing Fund II. You had a busy 2024! Can you share an overview of Nexus’s unique position in venture capital?
Sure. We focus on a few brain disorders: Parkinson’s disease, autism spectrum disorder, bipolar disorder, and co-morbid issues occurring in those conditions. We're agnostic of company stage, because we have different vehicles inside the fund that allow us to fund companies from a very early stage, or even facilitate NewCo formation, all the way to pre-IPO. So, we have flexibility from a capital allocation standpoint.
I think one of the things that’s truly unique is how we think about each investment opportunity in the context of the patient experience of living with these conditions, and our broader clinical understanding of that journey.
For more information, visit our website at www.nexusneurotech.com
What drives your thesis?
Well I should start by saying, when Bill and I set up this venture firm, the primary objective was to identify and provide both capital and support to companies that can make a difference in the space of these neurodegenerative, neurodevelopmental, and neuropsychiatric conditions. Although our LP mandate has a strong mission component, the double bottom line principle that bringing successful products and services helping those patients will inevitably result in good capital returns, is very much in play here.
The primary objective was to create novel and better options for the patients and families affected by our clinical areas of focus. We don't see our portfolio as a sum of disconnected return-of-capital investments. Rather, we are creating a portfolio where the companies have some sort of capacity to connect with each other through that patient journey.
Now, the only way to have an impact is if the product and services of those companies are successful. But the order of operations is important because we're first mission driven, but we're looking very carefully to make sure that companies in which we invest are positioned to be successful.
Looking to Fund II now, what have you learned so far that is influencing your approach?
For the first fund, we only invested in companies working in Parkinson’s disease and Autism. The second fund will continue to expand the portfolio of companies in those areas, but we are also starting to look seriously at companies focused on related clinical issues.
For example, if you have a neurodegenerative disorder like Parkinson's disease, what will happen over time with a large percentage of these patients is they'll have cognitive decline and dementia. This then results in us looking at opportunities directed at dementia. Similarly, in autism, seizures are common; we’re therefore evaluating companies focused on diagnosing or treating epilepsy.
In terms of what we’ve learned from our companies - Well, first of all, since we invest from pre-revenue all the way to pre-IPO, we have a very heterogeneous set of companies, from a maturity perspective. Because we have broad expertise in the firm, from clinical to technology to business, we aim at rightsizing the support we provide to the specific needs and stage of each company. We're not passive investors; we actively work to help our portfolio companies in different ways and continue to learn how we can be most effective in these efforts.
In addition we’ve been very involved in helping some companies with traditional fundraising, as well as with non-dilutive funding sources, such as research grants.
On that note, can you talk about your incubator? What makes neurotech a good space to incubate new ideas right now?
There are two reasons we established the incubator. One is to address a really serious gap of funding that exists today for neurotech founders in the middle, between grants and Series A. Investors see some early ideas as too risky, and grant funding agencies may see their needs as too large.
Secondly, the incubator serves as a feed-through, or pull-through strategy. Our incubator could invest in a company at a very early stage, and if the company is doing well, we'll be the first ones to write the next check, right? So, connecting those investments over time to our commercial core fund, it's part of a multi-pronged strategy, from a sourcing perspective.
The third point I would add is that this work is immensely satisfying. It's fun to learn about new and emerging ideas.
Do you have any comments on the recent federal activity and the general uncertainty in the markets right now?
In terms of these fluctuations in the market over the short term, we approach our work from a long-term investment perspective. We are mission driven and the unmet needs for those affected by brain disorders are large.
As Federal support for biomedical research faces greater uncertainty, we view our work as even more critical in helping to advance promising early-stage work with the potential for impact.
Any closing thoughts on what you’d like to see from the neurotech community?
I don't think the neurotech community has been sufficiently successful over the past couple of decades in scaling solutions and bringing them closer to meriting first-line use. At Nexus we are less interested in incremental progress but rather wish to enable useful disruption, either from an access, clinical effect size, or acceptance perspective.