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Who Needs a CEO? Actually, Liquidia May Hire More Than One

Venture capitalist Steve Nelson, left, and attorney Fred Hutchison were talking business at a recent VC event. Nelson is acting as interim CEO at Liquidia.

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MORRISVILLE, N.C. – As usual, Steve Nelson is returning phone calls and responding to e-mails between board meetings.

Nelson, managing partner with Wakefield Group, checks in this time with a reporter to talk about the ongoing search for a chief executive officer at Liquidia, one of Wakefield’s hottest investments. In addition to sitting on five different boards and looking for new deals, Nelson is acting as interim CEO for Liquidia.

But the company, which Nelson believes is poised to become a major playing in nanotechnology in several different fields, apparently is doing just fine without a full-time CEO. Liquidia landed $16 million in new investment last week as well as a high-profile investor from Silicon Valley.

Research and development at Liquidia is also proceeding so well that Nelson said the company may hire more than one CEO.

In other words, the 2-year-old startup with only 22 employees may branch off into different directions to focus on life science and materials opportunities.

“We are actively searching for a CEO,” Nelson said. “Our new investor will be very active in this as well. We didn’t want to hire someone while we were still negotiating with our investor. That would be like the new minority owner in a football team not having any say over decisions affecting the team.”

New Enterprise Associates led the latest round of financing. Last October, Nelson said Liquidia would seek $10 million in additional funding. But NEA made an attractive offer, and Wakefield as well as the other existing Liquidia investors agreed to expand the round, Nelson said.

“The company without a CEO attracted NEA and $16 million,” Nelson said, citing those factors as proof that Liquidia is on its way to success. “We’re operating great right now.

“We’ll make sure we bring in a superstar,” he added. “We’re also working to find out the right structure for the company. There are so many opportunities.”

Because Liqudia’s technology could be used in both material sciences and life sciences, the company’s need for management could require additional expertise and emphasis in both areas, Nelson said.

For example, Liquidia’s miniscule materials magic could be used in alternative energy, targeted drug delivery and medical devices, he explained. Another possibility is in diagnostic equipment.

“Where we will have divisions or spin-out companies, we don’t know yet,” Nelson added. “So we’re looking for one CEO, or two – or five.”

As part of the NEA investment, NEA gained two seats on the Liquidia board. Among them is Ralph Snyderman, who recently retired as the head of the Duke University health system. The other is Ravi Viswanathan, a partner at NEA. Nelson said he would rely heavily on the two to help Liqudia round out its management team. Snyderman will focus on life sciences and Viswanathan on other options, such as alternative energy.

Liquidia's technology is based on materials known as fluoropolymers that are liquids at room temperature but cure to transparent solids when exposed to lights. Liquidia has developed a material platform technology called Fluorocur, which enables the mass production of precise and uniform micro-sized and nano-sized particles. Fluorocur is based on research done at UNC Chapel Hill and NCSU by Joe DeSimone. DeSimone has been involved in entrepreneurial ventures in the past, including the launching of a chain of dry cleaners that did not rely on chemicals. In 1996, he launched Micell Technologies, which focused on using carbon dioxide as a solvent.

Liquidia lost its first CEO, Todd Pope, last fall. He was recruited away by drug giant Johnson & Johnson. Pope had joined Liquidia in April when the company closed on its first $6 million in outside financing.

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