Inventing Millionaires

Silicon Alley Duo Turn Scientists Into Fat Cats

Jeff Wolf and Jeff Himawan are perhaps the two hardest guys to impress that an applied scientist might ever meet—if the applied scientist got so lucky.

"We've made a lot of scientists millionaires," boasts Wolf, the CEO of Seed-One Ventures, the official name of a small Silicon Alley firm known among its partners as "Jeff 'n' Jeff."

"I'm looking for the Big Bang, an eight on the Richter scale," he adds. "A technology that hits us the way Vesuvius hit Pompeii."

The 37-year-old Wolf is so demanding because he'll have to live with his choices, day and night, for the next two years. Seed-One doesn't just fund start-ups; it morphs into them. In a strategy that could spark a trend among venture capitalists, every year or so Wolf pours millions of dollars into the research of a single invention, and then does the dirty work of forming a company to bring that technology to consumers. Though he keeps a seat on the board, he steps aside to let others "who know what the hell they're doing" lead the fledgling enterprise while he goes on to hunt for the next bold stroke of science.


"One compound backed by Seed-One slashed viral infections in primates 1 million–fold, and holds promise for treating cancer and AIDS."


Seed-One sniffs out breathtaking innovations. Bananas that grow and impart immunizations to human diseases. Electronic ink that writes and rewrites text on what appears to be ordinary paper. Trees for logging that grow bigger, fatter, and with fewer leaves. Refrigerators that don't use freon and work without moving parts. Medicinal and decorative flowers that bloom on command. Fruit that ripens just in time for sale, not at nature's whim.

Each one a revolutionary idea; each one not revolutionary enough for Seed-One. The firm's scientific advisory board meetings can "get pretty heated, pretty emotional," Wolf says, because only one entry out of thousands survives. Jeff 'n' Jeff live on airplanes as they hit military and university laboratories around the world. While mega-corporations snooze, they, along with Seed-One's staff of six of Ph.D.s and M.D.s, furtively scour technical journals the way teenage boys paw through Dad's Playboycollection. Seed-One will back nothing but platform technologies—breakthroughs that could remake an entire industry. With the bananas, for example, "you're just changing how you administer the medication," Wolf argues. "The concept of a vaccine hasn't changed."

What have they come up with? The potential firestorms that Seed-One plans to unleash on the market are bizarre even for our wonder-saturated age: a company called EluSys Therapeutics that's developing a shot to clean the bloodstream of any pathogen—viruses, bacteria, toxins, rogue autoimmune responses—within two hours, and Sensatex, whose Smart Shirt will serve as a wearable motherboard and wireless link to the World Wide Web. Manufacturing partners could add to the washable T-shirt the ability to transmit your vital signs to a doctor far away, or to receive your e-mail.

"These are the gems," says Wolf, beaming. There have been heartbreaks. Seed-One lost out to a British firm for the Roslin Institute's cloning technology, made famous by Dolly the sheep. And some terrific ideas—a finger-prick test to replace amniocentesis and seedpods that produce fuel-grade oil—were left on the shelf because Wolf judged their chances of winning adequate patents too weak. With Seed-One backers—including presidential scion Neil P. Bush—expecting to reap returns of up to 20 times their investment over the course of three to five years, Wolf says, "we just can't risk millions of dollars, hundreds of millions, on something that we're not certain we can protect."

Some Seed-One investors say they've made blockbuster returns on private offerings of its projects. But a few straddle the fault line between their daily professional world and the futurism of Seed-One. "This is my favorite company in the whole world," says initial investor Michael Araiz, but "it's hard to get your arms around. It's almost embarrassing to talk about something that could be part of history. It makes for kind of goofy cocktail-party conversation. I've learned to bring it only to people who are serious and sophisticated enough."


It's easy to romanticize the two Jeffs, much as we have gilded the image of the brave adventurers Lewis and Clark. Seed-One is as motley a crew as that assembled by the 19th-century explorers: Wolf, the eldest of five siblings, rose from a childhood at times spent on welfare and following his father through odd jobs, including carnival work, to earn a Stanford M.B.A. and a law degree from New York University. CTO Himawan, a 35-year-old biochemistry Ph.D. trained at the Massachusetts Institute of Technology and Harvard, is an Indonesian of Tibetan heritage who immigrated to the States at age six. The team includes a Shiite Iranian refugee and a Harvard-trained corporate counsel who's also a Hasidic rabbi.

Seed-One's low profile adds to the mystique. The firm's Web site (www.seed-one.com) provides a telephone number and address, an e-mail link, and nothing more. You could easily miss Seed-One's second-floor headquarters on lower Broadway, between a Staples Office Supply and Canal Jeans.

But Wolf and Himawan, like Lewis and Clark, have serious support from the establishment. Take EluSys, developer of the blood-cleaning injection. Wolf passed its CEO reins to Stephen Sudovar, who had served as president of Roche Laboratories, Inc., a U.S. division of Hoffmann-La Roche, one of the top five global pharmaceutical companies. The start-up's board of directors includes a retired vice chairman of Bristol-Myers Squibb, a retired president of Merck Vaccines, and a former commissioner of the Food and Drug Administration. Nobel Laureate Joshua Lederberg, a founding father of modern genetics, is an active EluSys scientific adviser.

Neil Bush, younger brother of Republican presidential nominee George W. Bush and Florida governor Jeb Bush, is the board member credited with raising the initial cash to form EluSys. Though Bush says he no longer plays an active role, a board meeting was held at the family compound in Kennebunkport, Maine, and Wolf has returned for other visits. Bush pledges that, should George W. get elected to the White House, "I'm definitely going to resign immediately. Given the marketplace perception [of potential impropriety], it would be a terrible thing for the company."

Funding an upheaval that could shape the next century means risking the loss of a few million dollars today. Bush is a former wildcatter in the oil industry and was a poster child for the '80s Savings and Loan crisis. He's no stranger to playing business decisions on a hunch. "I'm probably the maverick of the family. My brothers have chosen more stable ways of earning a living. I pursued a course for me," says Bush. "Intuitively, EluSys was high risk, and it's still high risk. This is very, very speculative. We have a long way to go."

Human trials for the commercial product are a year away, but the feds might waive that requirement for antiterrorism applications, such as blocking the effects of anthrax, says Dr. Frank Young, the former FDA commissioner on the EluSys board.

The recipient of all this high-powered attention is biochemist Ron Taylor of the University of Virginia, who discovered the "instant immunization" technology while searching for a new lupus treatment. Taylor designed nontoxic molecules to hitch pathogens to the most convenient mules around, red blood cells, which drag the ill agents kicking and screaming to the liver, where they're destroyed. In a sense, the primate body already does this as a part of an immune response, only much more slowly. Taylor designed his system as an overwhelming and rapid deployment. Problem was, most experts said it would rip red blood cells open.

But there was one receptor (the little-noted CR1) the blood-cleaning compound could safely hook up to, and Taylor recognized it. That prompted the Pentagon's Defense Advanced Research Projects Agency—which was searching for shields against biological warfare—to fund further research. Even after the compound slashed viral infections in four primate species 1 million-fold, results DARPA termed "spectacular," it was still roundly dismissed as a fool's venture—until Seed-One came along.

"Ron Taylor found it very difficult to find research support for many years," recalls University of Virginia patent lawyer Bob MacWright. Then the Pentagon took a chance, and "the two Jeffs came along. The rest, as they say, is history."

Taylor told the Voice EluSys holds promise for fighting diseases from cancer to AIDS. Named the inventor of the year by the UVA Patent Foundation, he couldn't hide his joy during a May acceptance speech. "The work is very hard, very frustrating, but incredibly exciting and challenging," he said. "And we get paid to do it!"

MacWright made sure of that. He held Jeff 'n' Jeff to an agreement that they'd raise several million dollars for Taylor's research, or be gone. Bush accompanied the Jeffs to seal that bargain, though he downplays the effect of name recognition. "People who'd strike a deal or invest because of my family name are what the market calls 'dumb money,' " Bush says. "Since the first round there's been a lot of smart money put into this, people who performed due diligence."


By the time they got EluSys off the ground, Seed-One's partners already had a solid track record. They started billion-dollar companies while working for other groups prior to founding Seed-One in 1998. And they're undeniably scrappy and tenacious. But don't romanticize the underdog, cautions Mario Corso, a pharmaceutical industry analyst with ABN AMRO. "I don't think start-ups have a better hit ratio than the large firms," Corso says. "There are just more of them. You don't hear about the many failures."

For now, Seed-One benefits from a few generic advantages of being small. The firm can change course quickly, and is less susceptible to "NIH syndrome"—shorthand for not invented here—than big corporate research departments, which are loath to drop what they're doing just because some bright outsider comes up with a better mousetrap. And firms like Seed-One get a boost from the U.S. government, which since the passage of the Bayh-Dole Act of 1980 has strongly favored federally subsidized university labs marketing technology through small firms rather than large ones. But researchers schooled in Organization Manways were sometimes slow to catch on. "Our policy toward licensing to start-ups is 'yes,' " says MacWright, but "it took a while to convince UVA's faculty we were serious."

Smart Shirt inventor Sundaresan Jayaraman, a professor of textile engineering at Georgia Tech, was only too glad to give the big boys a pass. They demanded too much and gave the impression his work would disappear into a filing cabinet crammed with other projects. Seed-One won him over because of "their commitment and dedication to sticking with the idea, not just making a fast buck," he says.

Wolf describes the Smart Shirt as a "naked, plug-and-play motherboard" that could usher in pervasive computing. Your shirt could receive e-mail that, depending on advances in fiber optics, might eventually be displayed by a screen in the fabric itself. Meanwhile, Dr. Jayaraman and Wolf say, screens could plug into a button on your sleeve. Or you might simply be able to walk up to a screen, maybe one built into a Coke machine or gas pump, and your shirt would tell it to display your e-mail.

Jayaraman prefers to focus on the humanitarian benefits the Smart Shirt could bring. Sudden infant death syndrome might be prevented with something as simple as an alert sounded by a baby-sized Smart Shirt, he claims. Children with hyperactive attention deficit disorder might be better dosed with medication once their behavior is precisely charted with Smart Shirt data. People recovering from outpatient surgery might feel more secure knowing that doctors could watch over them even after they leave the clinic, and the elderly might lead more independent lives with a wireless safety net.

Other sensors could perform specialized tasks, Jayaraman says, like reporting the location of bullet wounds in soldiers and cops, and monitoring carbon monoxide levels as firefighters enter burning buildings. Jayaraman expects that thousands, if not millions, of people will feed physiological data through Smart Shirts and other wireless sensors. When these devices get advanced enough, scientists might assemble a database to rival the blueprints uncovered by the Human Genome Project, he says.

A sense of mission seems to have soaked through the Seed-One culture. "I feel like there's a halo about the whole thing," Bush says.

That expression of inspiration and awe could as easily have come from Wolf, who says discussions with his rabbi/lawyer, and the natural order revealed by the science in which he's immersed, have stirred him to delve beyond his largely secular Jewish upbringing into matters of the divine. And Dr. Young, who followed a higher calling after retiring from the medical profession, donates his board fees and stock to the Reformed Theological Seminary in Washington, D.C., where he serves as senior vice president. He is also the pastor of adult ministries at D.C.'s Fourth Presbyterian Church. "All my life experiences were preparing me for my current roles," he says.

Jeff Himawan, though, remains resolutely practical. He yearns for his dream "killer application": teleportation. "That would be the ultimate in takeout," he says. "It would put Kozmo.com out of business."

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