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Tech investors take a Warren Buffett approach to raising money for blood cancer research

Key Points
  • Start-up investor David Lee and 10-year-old Rhett Krawitt are both cancer survivors and together are working to raise money for research.
  • Venture capitalists will take the highest bidders of an auction out for a private lunch or coffee meeting.
  • Cancer researchers are more reliant than ever on outside funding for clinical trials.
VIDEO1:5001:50
Tech investors take a novel approach to cancer fundraising

Venture capitalist David Lee was diagnosed with Hodgkin's lymphoma 24 years ago when he was a graduate Student at Stanford. Rhett Krawitt's acute lymphoblastic leukemia was discovered eight years ago when he was just a toddler.

Both are now cancer-free. Lee has a thriving investment career in Los Angeles and Krawitt is a Bay Area fourth-grader who plays tennis and piano and excels at sailing.

They're almost four decades apart by age but are uniquely linked because of the diseases they've overcome. Now, they're joining forces to spearhead a novel fundraising effort that convinces prominent start-up investors to donate their most precious asset: time.

Starting last week, Lee and about three dozen other venture capitalists from 23 firms in California began auctioning lunch, dinner or coffee meetings, offering winning bidders a chance to pitch an idea, get business advice or just make a valuable connection. All of the proceeds from the 2018 VC Master Lunch Auction Series, hosted on the website Charitybuzz.com, go to the Leukemia and Lymphoma Society, the world's biggest nonprofit focused on eliminating blood cancer.

David Lee (left) and Rhett Krawitt (right)
Joseph Griffin | Digital Creative Associates LLC

"VCs could easily just write a check, but giving their time is oftentimes a lot more valuable," said Lee, who lured many of the investors to the fundraiser by telling them about Krawitt's story. "This is clearly something deeply personal to me."

It's an idea popularized by Warren Buffett, who's held an annual auction for the past 18 years, with the highest bidder winning a private lunch meeting with the billionaire investor. During that stretch, Buffett has raised over $26 million for the Glide Foundation, a San Francisco charity for the homeless. The 19th fundraiser starts later this month.

The VCs in the LLS auction won't bring in Buffett-type money. But Lee, who co-founded Refactor Capital in 2016, said that people will likely pay thousands of dollars for these meetings — the site estimates the value for each at $2,500 — knowing they're getting unusual access to influencers and that the money is going to a worthy cause.

"Cancer touches all of us and I applaud any effort to raise funds and hopes for those in need," said Mark Suster, a partner at Upfront Ventures in L.A. and one of the event's participants. "When David contacted me and we saw a way we could help raise money, it was a no-brainer."

Other firms represented in the auction series include Andreessen Horowitz, Sequoia, First Round Capital, Founders Fund and DFJ. The first set of auctions began Wednesday, and by Friday afternoon there were bids totaling over $15,000. The top bid for lunch with Suster and his investing partner, Kara Nortman, stood at $3,750.

"They're happy to discuss your entrepreneurial ideas or business or just share a great meal and talk about tech & investing," according to the web page for Suster's auction.

The auctions last two weeks, and in some cases the cost of the meal is included with the highest bid, while in others the winner is responsible for paying. For each meeting, there's no expectation that funding or any sort of business deal will follow.

VIDEO1:5801:58
Historic treatment, historic price

Tremendous progress in recent decades

Blood cancer researchers have made tremendous progress in recent decades. In the U.S., the five-year survival rate of leukemia quadrupled since 1960 to over 60 percent, while for Hodgkin's disease the rate has more than doubled to almost 90 percent, according to LLS. For pediatric cancer, the success rates are even higher.

But as oncologists pursue clinical trials for expensive immunotherapy and more personalized treatments, outside financing is more important than ever, especially with projected declines in federal funding.

"It takes a lot of time and patience and investigators, who can spend the time running these clinical trials and asking the really important questions," said Mignon Loh, a pediatric oncologist at the University of California, San Francisco, and one of the doctors on Krawitt's team. "The LLS has made it possible for many researchers, including scientists and physicians, to be able to spend the time conducting research that has led to treatments that Rhett received."

The industry is evolving at a rapid clip.

In 2017, the Food and Drug Administration approved the first chimeric antigen receptor T cell (CAR-T) therapies, enabling doctors to use a patient's own immune system cells to fight cancer cells. So far, the therapies, which cost hundreds of thousands of dollars each, have been used for patients who don't respond to traditional chemotherapy or suffer a relapse.

Krawitt final chemo LEVY 180519

The connection between Lee and Krawitt dates back five years. At the time, Krawitt was two and a half years into his treatment, during which he had endured intensive chemotherapy sessions and a long list of shots and oral medications, as well as a serious infection in his bloodstream that complicated his recovery.

Lee and Krawitt were introduced as part of an LLS fundraiser in 2013, when Krawitt was five years old. As part of the fund-raising effort, the duo filmed an interview that ran on TechCrunch and helped raise over $100,000 from VC auctions. Last week, the two cancer survivors were reunited for the first time since, this time to film a video about their progress and promote an even bolder philanthropic effort.

"Thanks to my doctors and nurses, my family and friends, and the Leukemia and Lymphoma Society, now I'm gone with the cancer," Krawitt says in the video.

Krawitt is used to public attention. In the years since his diagnosis, he's testified in Washington on behalf of LLS, been in the press for his family's effort to mandate vaccinations for school children, spoken in front of hundreds of donors at an LLS fundraiser and has been honorary skipper for the Leukemia Cup Regatta, a sailing competition.

krawitt testimony LEVY 180519

His dad, Carl, has been right with him along the way. Carl Krawitt said that beyond the medical benefits and advances that come from LLS, the organization also provides educational and counseling services that are essential for patients and their families.

One service he highlighted was the First Connection program, where families that have been through the traumatic experience of dealing with leukemia or lymphoma provide peer support to a person or family who's just received a shocking diagnosis and needs help and advice. Krawitt said he and his wife, Jodi, took advantage of First Connection during Rhett's treatment and are now volunteers themselves.

"When your kid gets diagnosed with cancer, you're like, well what do I do?" Krawitt said. "LLS was one of the organizations that was there to provide answers. And not just provide answers but actually provide you with questions that you didn't even know you needed to ask."