A Silicon Valley biotech hub that offers startups $250,000 says venture capitalists are missing out on 3 big breaks

Drugs are sexy. Climate change? Not so much.

As a result, venture capitalists have swarmed upon a handful of startups that tout the benefits of new and often preliminary products, while initiatives with slightly more humble goals like making meat without animals have failed to attract funders’ attention.

It’s a pattern that Arvind Gupta, the founder of a fast-growing Silicon Valley biotech incubator called IndieBio, aims to avoid. Instead of focusing exclusively on pharmaceuticals, Gupta has his eyes on three major problems that he says startups are uniquely poised to tackle — so long as they make use of what he calls his “secret sauce” for success.

A world that’s running out of resources

Memphis Meats, the alternative meat startup that Gupta helped fund back before its CEO, Uma Valeti, had graced the cover of Inc. Magazine and attracted the attention of people like Bill Gates and Richard Branson, sells a solution to a much bigger problem than America’s beef glut.

Instead of simply selling tasty, healthier, less-wasteful source of protein, Valeti is selling one part of a complex solution to climate change. As the planet gets warmer, we’ll have less water, less farmable land, and fewer healthy animals — putting a huge amount of stress on farmers and cattle ranchers who will have to find solutions to feeding a mushrooming population.Memphis Meats wants to help by removing the animal altogether, and creating an alternative to meat that’s made using animal cells.

“Unfortunately, the problem with our current venture capitalist model is that these kidns of issues are not addressed,” Gupta told Business Insider during a recent visit to IndieBio’s headquarters in San Francisco’s Civic Center district.

So far, they’ve tested a chicken prototype, and dozens of other startups like JUST (formerly Hampton Creek) say they’re getting into the lab-grown meat space too.

But asking that question, and figuring out what happens to our food supply chain when resources begin to become scarce, is precisely what Memphis Meats has done. And it’s precisely what has helped them thrive.

“It’s very rare to find someone who gets the ‘what if?’ but times three,” Gupta said.

An area of medicine with fuzzy federal guidance

When it comes to easily-defineable treatments like drugs, pills, and certain forms of therapy, the US Food and Drug Administration can provide solid development guidance, Gupta said.

Regenerative medicine — essentially a means of healing damaged tissues and organs by creating new ones or reviving dysfunctional ones — doesn’t fall into any of those categories. That leaves startups working in the space struggling for helpful benchmarks to work from.

“It’s a hugely underserved area,” Gupta said.

One of the regenerative medicine startups that IndieBio backed as part of its most recent class is JointechLabs. They’re making a device that makes it easier to transfer stem cells from areas of the body where they’re abundant to places where they’re needed to accelerate the healing process.

A planet that’s worth saving before fleeing to Mars

Sending humans to Mars is a moonshot idea, Gupta said. It’s an awe-inspiring goal, but he’s more interested in focusing on the planet we have first.

With that in mind, he’s been looking at startups with a focus on bioremediation, the process of using tiny organisms like bacteria and fungi to break down pollutants and clean up the environment. UBA Biologix, which IndieBio funded last year, is one such company. They clean up the brackish industrial wastewater from coal, gold, and platinum mines using microorganisms and have a project operating currently at a large coal mine in South Africa.

Gupta said many companies like UBA wouldn’t have been given a chance by traditional venture capitalists because their product doesn’t have a traditional pharmaceutical focus. But he sees a potential for these kinds of startups to tackle issues that no one else is addressing. And by doing so, the companies can make a name for themselves and help the world at the same time.

“It’s about giving scientists a chance to become entrepreneurs,” Gupta said.