Building at the regulatory frontier, with Hoxton Farms
Welcome back to The Form Playbook, our newsletter supporting founders building in markets where policy matters. Form is the only fund dedicated to helping founders understand, navigate and build where regulation is a driver of success.
This month:
🎙️ Interview with Ed Steele, Co-Founder of Hoxton Farms: How to build at the frontier of technology and regulation
📰 News & Views: Our take on what a new Liz Truss government means in the short term, especially following the Queen’s death
⏰ Form Updates: Our investment in Stitch, the patient retention platform for clinical trials, speaking to Sifted about startups and lobbying, and joining a new campaign to encourage UK entrepreneurship
Ed Steele, Co-Founder of Hoxton Farms, on building at the frontier of technology and regulation
Starting from just a few cells, Hoxton Farms combine cell biology and mathematical modelling to cultivate delicious, cruelty-free and sustainable animal fat. Building a company at this technological frontier also brings unique regulatory and go-to-market challenges, so we sat down to discuss the most important actionable insights from this experience.
Ed's Advice for Founders:
To ensure that you can make well-informed product decisions and nail strategic discussions with customers, it’s worth pushing for a seat around the table with regulators. These conversations have been essential for us in understanding where and how we will go to market, which products we will produce and what science we can do in the lab.
Make sure you understand how policymakers and regulators are making decisions based on their own constraints and incentives. It’s often worthwhile to speak to as many people as you can within the same government department: don’t rely on their own internal communication!
Questions about regulatory risk are common to fundraising, and investors’ regulatory understanding varies. Despite the uncertainty, drawing on policymaking precedents about time-to-market and showing how you’re reducing your exposure to risk can help resolve these concerns.
Find the full interview transcript below.
News & Views
Following Liz Truss’s appointment as the UK’s new Prime Minister, UK Parliament has been suspended in light of the death of Queen Elizabeth II. This, combined with the upcoming party conferences, will delay any major policy beyond the PM’s announcement on energy bills until mid October.
Two of Truss’ major appointments are Kwasi Kwarteng as Chancellor and Therese Coffey, who ran her campaign, as Health Secretary and Deputy Prime Minister. Kwarteng has quickly sacked permanent secretary Tom Scholar, promising to replace Treasury ‘orthodoxy’ with what he regards as more of a focus on economic growth.
The new PM has also cut down on the number of advisers both in No 10 and across the Cabinet. In the short term this may limit how much else can be delivered, beyond efforts to address the cost of living crisis and the pressures facing the NHS this winter.
We’ve called on the new government to look to the many UK start-ups helping to solve some of these immediate pressures. As we set out here, there’s a huge opportunity to tap into this resource via reform across household debt, childcare, employment rights, housing and health. We also fully support the ideas in The 2022 Tech Startup Manifesto produced by our friends at Coadec and The Entrepreneurs Network.
It’s also that time of year: Atomico’s State of European Tech survey is out now. The survey discusses the regulatory environment for European start-ups and what decisionmakers should do to help the ecosystem reach its full potential. Given the report is read by senior policymakers across Europe, it’s worth taking 10 minutes to respond!
Form Updates
We’re thrilled to announce our investment in Stitch, the definitive patient retention platform for clinical trials. Patient churn is an under-reported reason why clinical trials are so expensive and can fail altogether. Stitch, working with the likes of Cancer Research UK, are helping fix this.
Patrick spoke to Sifted about startups and lobbying, and we signed a letter coordinated by Jimmy McLoughlin calling on the new government to host a new national entrepreneurship competition and encourage business growth across the UK.
Full interview with Ed Steele, Hoxton Farms CEO:
FORM: As with many “frontier” technologies, regulation is a big factor for cultivated meat, both in terms of product and go-to-market — how have you thought about these as you’ve started and scaled the business?
ED STEELE: The regulatory landscape has evolved dramatically since we founded Hoxton Farms. When we first started the company, no cultivated products were approved for sale anywhere in the world. Now cultivated chicken is available in Singapore, tastings are permitted in The Netherlands and Israel and food agencies are working hard on regulation in many different markets. To ensure that we can make well-informed R&D decisions and have strategic discussions with customers, we have pushed for a seat around the table in consultations with regulators. These conversations have been essential for us in understanding where and how we will go to market, which products we will produce and what tools we can use in the lab.
When it comes to fundraising, how have you approached the question of regulation — and what kind of questions and views have you had from investors?
Investors’ regulatory understanding varies significantly. We’ve seen investors pull out of due diligence with concerns that cultivated meat won’t be approved, while others haven’t interrogated the topic at all. The most consistent questions centre on how long it will take for regulators to approve cultivated meat products and where the greatest risk lies. Although there is significant uncertainty, we can draw on regulatory and policymaking precedents from other novel ingredients to address investors’ concerns. Being involved in direct discussions with regulators allows us to provide investors with convincing arguments about how we can reduce our regulatory risk and go to market more quickly.
What does it take for founders to engage well with government and regulators? What do those who have not done this before need to know?
As with most networking, warm introductions are a significant advantage. The team at Form has been invaluable here. It’s often worthwhile to speak to as many people as you can within the same government department: don’t rely on their own internal communication! Penetrating the world of regulation and policy takes patience, a positive outlook and many, many conversations!
What tips would you give to founders thinking about taking on markets where regulation and public policy will shape their market?
1. Make sure you are leading the conversation. You want to be the ones shaping your market, not the regulators or government. Take time to attend events, cultivate relationships, and speak to everyone you can.
2. Understand the regulators’ point of view. Policymakers and regulators making decisions based on their own constraints and incentives — make sure you understand what these are and how they affect your product.
As always, if you know anyone building a game-changing company in a market where regulation either already exists, or is taking shape — or you’re an investor thinking about how policy affects your portfolio, get in touch.