Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
When Upsize talked to Ping Yeh in late 2019, he was on a winning streak. His company, StemoniX, was the defending Minnesota Cup champion and had also just been named one of five companies to win a MEDy Award, which recognizes companies creating new solutions to redefine health and medicine, from Singularity University’s Exponential Medicine.
He was the co-founder of StemoniX, the company whose idea was born from his own bout with cancer, when his initial treatments left him with long-term side effects he thought could have been alleviated with better testing of treatments.
Essentially, the Maple Grove-based company made tiny human brains from stem cells that could be used in testing medications instead of animals with the goal of providing better test results.
“We figured out how to produce, at scale, and manufacture small human brains about a half-a-millimeter in size,” he says. “And, so, at scale, we use that as a research platform to discover new medicines for various diseases.”
So, envision testing new meds for Parkinson’s disease, Alzheimer’s and more.
“We served half the top 25 pharma in the world and revenue started increasing,” he says. “We were focused on raising a Series B in late 2019, early 2020.”
Then COVID hit.
“We had to scramble big time,” he says. “No one wanted to risk their lives by going into the lab and interacting with somebody who might have COVID. So, all these pharma companies just shut down their labs and they went into scramble mode.”
Companies began focusing only on mission critical projects and, while StemoniX was on its way toward achieving success, it was a few years away. The company got a Paycheck Protection Program loan to keep staff and stay alive.
It worked. In March 2021, StemoniX merged with Cancer Genetics Inc. to form Vyant Bio. Yeh became chief innovation officer but left a year later. The StemoniX subsidiary has since been acquired by AxoSim Inc., which develops and applies human biomimetic platforms for neurological diseases.
So, it wasn’t necessarily the exit Yeh dreamed about, but he also takes pride in having seen the company through its first rounds of growth and an unprecedented global pandemic that pushed many out of business. His employees retained their jobs and his investors did well.
In his eight years, he lived the birth, growth and transition of StemoniX, “which very few people get to experience,” he says, adding that the company is still helping move medical research away from animals and toward these micro brains made from skin and stem cells.
“One would always love to have an exit where it becomes a multi-billion-dollar company,” he says. “It doesn’t mean the core technology won’t eventually get there because it’s still going. What I was proud of was leading a team through the pandemic and caring enough about investors to not quit and take it to an exit.”
And Yeh landed alright, as well, and he acknowledges owing a lot of that success to StemoniX. He’s now CEO at Vocxi Health, an Arden Hills-based spinoff of Boston Scientific with nine employees, a contractor and a technology that can measure chemicals from a person’s breath and diagnose diseases like COVID, Alzheimer’s, lung cancer and many more.
“I’m super grateful for the team, because it takes an incredible team to do something like that,” he says. “There’s no way I’d be sitting as CEO of a spinoff from Boston Scientific if I hadn’t had those 9, 10 years. There’s no way.”
The opportunity at Vocxi came through connections at the University of Minnesota, which was looking for seasoned entrepreneurs to take a look at technologies they were working to get on the market. He got to interact with a half-dozen different teams, but with Vocxi, he got to meet the founders and top executives at Boston Scientific — many of whom agreed to move into retirement or different roles if he’d take over.
“We had to have a lot of things come together, like the intellectual property and the team’s willingness to retire early,” Yeh says, adding that Boston Scientific threw in a bunch of equipment and office space. The company officially spun off into its current iteration in September 2022. “We didn’t have to buy a single chair,” he adds.
He’s thrilled with the move. The technology — using digitized breath captured on an array of 120 sensors to understand an individual’s health — is fascinating and has life-changing potential.
“The old way of doing things is, if you had a million combinations or 10 million combinations of something you’d need 10 million sensors, because each sensor would be trying to measure its one thing,” he says. “That’s not efficient. … These are quantum mechanical-based sensors. The breath interacting with our sensors is happening at quantum mechanical level.”
And it uses a circuit board the size of a credit card connected to a phone. People breathe into the encased plastic card-like machine and the data gets sent to the cloud, gets analyzed and can go to a physician.
In addition to Vocxi, Yeh has also been advising other entrepreneurial tech companies. Advice he often passes along to them includes the need for creativity and thinking outside the box.
“Resourcefulness is always greater than resources,” he says, as is continuing to fine-tune your product. “Iterative improvement is really important.”
Small businesses, he adds, may lack resources, but they do not lack the ability to be nimble. They should adapt more quickly to necessary changes — including the use of artificial intelligence.
“AI is going to touch every industry,” he says. “Just make sure you know you’re on top of the AI revolution.”
Master the simple stuff — culture, values, mission and vision. And, perhaps most importantly, never give up. “The game isn’t over,” he says. “I’ll call it the game. This journey isn’t over until there is no more energy left in it. Startups don’t die for lack of money, they die for lack of energy. If someone’s so passionate about it, people work for free and get it done.”
