NanoString: From Research to Start-Up

Amber Ratcliffe

Co-founder of NanoString Technologies

October 23rd, 2008

Presentation Overview

Genesis of the Basic Idea

Seed Funding the Proof of Principle

Decision to Start the Company

The Start Up Process: Nuts and Bolts

Current Status of NanoString Today

A Few Things to Think About

The Backstory

Krassen Dimitrov and Amber Ratcliffe meet in Lee Hood’s Lab

Krassen & Amber build ISB’s microarray lab

Out of frustration with arrays idea of individual molecular tagging born

1999 2000 2001 2002 2003 2004 2005 2006 2007

Molecular Barcode Idea

Target Specific Capture & Reporter Probes are created to bind to the mRNA transcript

Target Specific Capture Probe

Target Specific Reporter Probe

nCounter Assay

Image Surface

nCounter Assay

Code Gene Count

x 3

y 1

z 2

Codes are counted and tabulated

Research Seed Funding1999 2000 2001 2002 2003 2004 2005 2006 2007

Pitch idea to the Institute for Systems Biology

Seed Funding for Basic ResearchISB Seed Funds Research

IP Licensing Rights for Founders Shares & Royalties

ISB Files First Patent

Amber Starts MBA at UW

Dwayne gets hired and comes up with idea for stretching molecules

Preliminary data generation

Amber starts writing business plan

Early Proof of Principle Data1999 2000 2001 2002 2003 2004 2005 2006 2007

Dwayne Dunaway

Writing the Business Plan

Identify the Application for the Technology

Calculate the Market Opportunity

Analyze the Competitive Landscape

Identify the Business Model

Create an Operational Plan

Generate Financials

Determine How Much Money You Will Need

Focus on the Business, not the Technology!

NanoString competes in business plan competitions

Jungle International Business Plan Competition

Purdue National Life Sciences Business Plan Competition

UW Regional Business Plan Competition

Gives access to community members

Seed money

Good press

Validation of idea

Business Plan Competitions1999 2000 2001 2002 2003 2004 2005 2006 2007

Decision to Start the Company

Large Market Opportunity

Clear Business Model

Affiliations with Top Notch Scientists

Investor Interest

Access to Intellectual Property

Personal Passion for the Technology and Market

Desire to Experience the Process

Ability to Take the Risk

Company officially founded in June

Get corporate identity ready and infrastructure in place

Pitch to VCs - Kleiner Perkins, Paul Allen, Fraiser, Versant, Arch, Flagship, etc

Select Sonya Erickson for counsel

Meet Perry Fell

Perry introduces us to Chad Waite

OVP gives us term sheet = blood in the water

Forming a Company1999 2000 2001 2002 2003 2004 2005 2006 2007

January 2004 – DFJ starts due diligence

May 2004 – Angel round, start operationsExecute agreement with investors

Start leasing space at ISB

Hire first official employees (half pay)

Find an accountant

Set up IT infrastructure

Continue technology development

July 2004– Close $4.3M First Tranche Series A

Starting Up Operations1999 2000 2001 2002 2003 2004 2005 2006 2007

First “4 spotter”

November - Move in to 4300 sqft of lab/office space

CEO, COO, CSO, Office manager, 3 PhDs, 2 Research Associates

Barcode development, instrument development, image processing software development

Filing patents

Product Development1999 2000 2001 2002 2003 2004 2005 2006 2007

Manufacturing scale up

Milestones:

January – make 25 reporters

May - make 100 reporters

August - make 532 reporters

File software patent

Start work on Nature Biotech Paper

Start Instrument OEM discussions

Product Development1999 2000 2001 2002 2003 2004 2005 2006 2007

Start offering fee for service Commercial group formed

Chief Commercial OfficerMarketingSalesBusiness development

Open commercial office in CAPrepare for commercial launch

Refresh corporate image MessagingCollateral generationFormulationsPackaging, etc

Forming Commercial Team1999 2000 2001 2002 2003 2004 2005 2006 2007

US Commercial Launch

Made Red Herring Top 200 Most Innovative Companies

Nature Biotech paper!

Raised $17M to date

Multiple System placements

Launching in Europe January 2009

We currently have 43 employees

Today2001 2002 2003 2004 2005 2006 2007 2008

Realistic Timeframes

Time from idea to incorporation – 3 years

From incorporation:

Time Amber worked with no pay – 11 months

Time to raise VC $$ - 13 months

Time to produce fully functional prototype – 4 years

Time to get to commercial launch – 5 years

Time to get rich quick – 8 years and counting…

Take Aways

Be very clear about the opportunityMarket

Application

Freedom to operate (IP)

Do it for the passion and process

Understand your role now and going forward

Find experienced management & service providers

Know your tolerance for risk

Network, network, network – but be careful

Commit fully