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Sep 01, 2014
 |  BioCentury  |  Finance

Nurturing killer seeds

Why Index Nursery plans to publicize wins, failures of VC's killer experiments

Index Ventures is not the first VC to operate an incubator that conducts killer experiments on seed projects. But what could set the "Index Nursery" apart is the firm's intention to publicize its failures along with its successes.

According to Index's David Grainger, the firm is looking to put the Index Nursery front and center, in part by giving a name and structure to the seed phase discovery projects that have been going on at the firm for the past decade. Nothing changes operationally, as the firm will continue to source projects from academia and industry that are led by entrepreneurs and Index partners.

"It is a platform for these seed investments to go into a virtual project in order to do the killer experiment," he told BioCentury.

Now, said Grainger, the firm plans to launch a dedicated website for the Nursery in the next one or two months, where it will publish the killer experiments and the results for each project.

Grainger noted that many incubators operate in stealth mode, with failures never seeing the light of day. In contrast, Index hopes its Nursery can convince entrepreneurs that conducting an experiment that quickly and cheaply identifies a fatal flaw in a hypothesis is another kind of success.

"A good failure isolates the particular problem that you are going to encounter later and deals with it right up front so that resources are not lost," he said. "We want our entrepreneurs to be proud of their good failures."

In addition, publicizing "good failures" could aid the industry's R&D efficiency by potentially avoiding duplication of futility, where multiple organizations expend resources conducting the same failed experiments.

He said time and resource constraints make it unfeasible to publish the failures in peer-reviewed journals.

The Index Nursery has held nine projects so far, of which four are ongoing, four have failed, and one, Levicept Ltd., has graduated (see "Seeds of the Index Nursery," page 18).

Grainger said the Nursery expects to start 6-8 new projects each year, with about half of Index's series A investments likely to be in its graduates.

He noted the firm's more traditional series A investments are typically in companies that have already reached a later stage of development outside the Nursery.

Planting the seeds

Index Nursery projects...

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