(Photo courtesy of Drop Diagnostics)
Here’s why, according to an email from cofounder Max Lamb:
The week before Thanksgiving ’14, our team was flown out to San Francisco to interview at [accelerator] Y-Combinator. It was a great opportunity to meet Sam Altman as well as some of the other YC partners and get their feedback. A common comment was “You guys need to be out here.” It is the typical Silicon Valley entrepreneur’s line, but we thought we should explore.
All within the week after our YC interview, we were able to meet with representatives from J&J, Stanford, QB3, UCSF, and a handful of local biotech startups. This was the tipping point in our decision. The ecosystem [in San Francisco] is built to help startups break through the doldrums of seed funding to Series A that plagues almost all young life science companies. [Emphasis added.] And everyone in the system is more than willing to help, even a potential competitor. After our visit, we decided to make the move, but we’ll miss Philadelphia and the great and growing entrepreneurial community it offers.
Drop Diagnostics was unique among most other DreamIt Health companies because it is developing a medical device that must get approved by the Food and Drug Administration before it gets to market. That process, the team said, will take at least three to four years and millions of dollars. So early-stage capital was a big sticking point for them. During DreamIt Health’s demo day, the team said it was raising $500,000.
Of course, this is just one startup.
It wouldn’t be wise to read too far into Drop Diagnostics leaving. There’s also the fact that, relative to DreamIt Ventures, DreamIt Health has had a stellar retention rate when it comes to startups staying in Philadelphia. But if health IT is to be one of the region’s strengths — DreamIt Health leaders and others have said that Philadelphia should be “the Silicon Valley of health IT” — it’s worth paying attention to the reasons why Drop Diagnostics left: early-stage funding and strength of community.-30-
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