For this VC firm, risk taking is a safe bet

One Way Ventures’ investment in Brio seemed like a big risk. Until the pandemic made it seem very smart

Semyon Dukach, managing partner of the Boston investment firm One Way Ventures.One Way Ventures

One Way Ventures is a venture capital firm with a unique investing hypothesis: that companies founded by immigrants are more likely to succeed than others.

Managing partner Semyon Dukach chose the name One Way because he says that buying a one-way ticket to the United States from anywhere else, leaving friends and family behind, is a true sign of a risk-taker. He decided to start the firm after taking part in a 2017 protest of the Trump administration’s immigration policy.

“Immigrants are stronger founders,” says Dukach, who was born in the Soviet Union and grew up in public housing in Newark. He earned a master’s degree at MIT, then spent several years playing on and managing teams of blackjack players in Las Vegas. (He’s a central character in Ben Mezrich’s second book about MIT-educated card sharks, “Busting Vegas.”) Dukach started a company called Fast Engines and sold it a month before the dot-com bubble burst in 2000.

Twenty years later, running Boston-based One Way, Dukach’s timing was again pretty good. In March, he was in the middle of a business trip through Russia, the Netherlands, Switzerland, and the United Kingdom when COVID-19 began spreading in the region. Dukach was talking to investors about raising a second pool of capital for One Way to invest. Sensing that countries were about to start shutting their borders, he hastily booked a trip back to Boston by way of Istanbul.

The first meeting he took upon returning was a Sunday evening get-together with a company he’d been tracking for several years, Brio Systems. Dukach was mildly interested in the concept — running blood tests at workplaces and fitness centers to gather data that could help people live healthier lives — but he didn’t think the team was strong enough yet.

“We didn’t have someone who could really hustle, somebody who could really sell,” says Brio chief executive Boris Lipchin. That had led to “a long series of rejections” from Dukach, Lipchin says.

Lipchin had come to Massachusetts from Russia as a 7-year-old, speaking no English. He recalls his parents dressing him in a suit for his first day of second grade in Brookline. “My first class was gym class, and I was surrounded by kids who were not wearing suits,” he says. Lipchin went to MIT and later helped write much of the guidance software for SpaceX’s Dragon rockets, living for short stretches at Cape Canaveral to help out with the launches.

After that, he cofounded a company called Airmada to build automated ground stations for drones, to help bring down the cost of operating them. It won admission to Y Combinator, a “finishing school” for startups in Silicon Valley that’s tougher to get into than Harvard or MIT. But Airmada didn’t take off as a business.

Now, Lipchin’s follow-up, Brio, seemed to be flailing as well. Revenue in 2019 was less than $100,000, he says. Brio needed to raise more money, and while some investors were stepping forward, the funding round wasn’t coming together smoothly.

“It had been some absurd amount of months,” Lipchin says.

But Brio was about to make a big change to its strategy. The startup already had created software for tracking patients' blood samples as they went from workplaces to labs, and for presenting the results of tests on those samples. It believed that the need for a new kind of testing was about to explode: testing for COVID-19.

Dukach had just had to cut his European trip short because of the virus, and when he spoke with Lipchin on March 22, Boston was mostly shut down. The Sunday Zoom meeting ended with Dukach saying, “I can have $1.5 million in your bank account by noon tomorrow,” Lipchin recalls. Lipchin asked for a little time to check in with some of the other investors with whom he’d already been in discussions. Dukach said it was fine, but he wanted a response sometime on Monday.

The way that Brio approached the pivot to COVID-19 testing “was aggressive and right,” Dukach says. “They did it at the right time, and decisively.” Dukach also wanted to get the deal done fast because the company was willing to accept what he saw as a reasonable valuation; the company’s progress to that point, focusing on wellness and preventative testing, had been unimpressive. The investment in Brio would be the biggest check that One Way Ventures had written.

But there was a heart attack moment the day after their Zoom meeting. The Food & Drug Administration put out an official notice that it had not yet authorized any kind of at-home testing or COVID-19 test sample collection. Lex Zhao, another partner at One Way Ventures, sent an e-mail to Lipchin asking him what he thought. “The government had banned the premise on which my business was being built,” Lipchin says, and he’d just told another firm that he wouldn’t be taking their money.

“I thought I’d just put a stake through the heart of my company,” he says.

But Dukach responded to the e-mail chain that Zhao had started, saying effectively: "None of this matters. Keep going. It’s going to change 10 times. The money will still be in your bank account by noon tomorrow,” Lipchin recalls. His take on the FDA matter was a signal to Lipchin that Dukach’s “conviction is absolute. He believes in the founder, and he doesn’t care what the federal government might say.”

The deal got done, and since then Brio has been on a tear, helping employers and universities regularly test people for COVID-19, couriering test samples to laboratories around the country so they can get results within 24 hours. Today, it uses only PCR-based tests, which are more accurate than alternatives.

“Our average test subject has been tested more than four times,” Lipchin says. “We’re not a one-off solution.” The company conducts thousands of tests every day and just hired its 20th employee. Revenue has been in the millions of dollars per month since the summer, Lipchin says.

Unfortunately, what’s driving the company’s growth is the uncontrolled spread of COVID-19 in the United States. “The positive rate is many times higher than it was a month ago,” he says. “It’s accelerating before my eyes.” His hope is that if the trend lines continue, the company can maintain its 24-hour turnaround, and that Brio won’t encounter any supply chain problems over the winter.

“We’re extremely focused on execution,” he says. And because the company is “extremely profitable,” Lipchin says, there’s no immediate need to raise additional capital.

One Way, however, is putting the finishing touches on a new fund that could eventually total $50 million; Dukach wouldn’t comment on it, citing Securities & Exchange Commission rules. Much of the money is coming from immigrant entrepreneurs and engineers around the country who have done well — and now want to back a new generation of founders who came to America from someplace else.