Full Transcript

Jason Kirby: Hi, Katelyn, it's great to have you on the show today. I'm so excited to be able to share your story and listen to your story of your accomplishment of being able to raise a successful round. And we'd love for you to share your story to our audience—a little bit about your background personally and how you started in NaluBio and what that journey's been like for you.

Caitlyn Krebs: Great, thank you, Jason. Thanks for having me today. My background: I come out of the biotech and life sciences industry for the last 20 years. I've been at a bunch of startups—I'm an entrepreneur at heart. I was in modeling and simulation—so ML and AI before those were actually terms, about 15–20 years ago. We were doing mechanistic models of biology in computers, creating virtual patients. I've been in pre‑diabetes, Alzheimer's and mild cognitive impairment with digital eye tracking (a digital health company), and cancer genomics—testing blood to see if you've got low amounts of cancer for a range of cancers. I love the intersection of science and technology; that's where I love to be on the frontier. I was in pre‑diabetes before people believed it was a disease. I was in Alzheimer's before people believed you could actually prevent it—you can, with diet and exercise, which most people don't know.

Caitlyn Krebs: About three and a half years ago, a venture capitalist friend called me while I was at a cancer genomics and epigenomics company and asked, “Do you know what CBD is?” She said it's everywhere and there’s no data behind it. It binds to GPCR receptors—one of the most druggable targets for pharma—targeted for diseases like depression, anxiety, and weight loss. We realized there was an opportunity to take what we know from pharma and biotech—making small‑molecule drugs that are consistent and reliable—and apply that to the cannabinoid world. That was the genesis of NaluBio. The three of us came together to take a pharmaceutical approach, elevate quality, consistency, and purity of cannabinoids, and make drugs. My co‑founder Randall’s dad has multiple sclerosis—he had been using CBD and cannabinoids to manage it, and some days it worked and some days it didn’t. It was this confluence of a therapeutic application, our biotech expertise, and here we are. We’re a very different‑looking company in the cannabis world.

Jason Kirby: That's not the typical experience I see in cannabis deals—usually nothing in this realm of science and technology. As we discussed offline, you're building what is in some ways a biotech company, but with cannabinoids. What was it like going to market and raising capital with that—where you couldn't neatly say “we're biotech” or “we're cannabis”—and having to deal with that intersection?

Caitlyn Krebs: We do call ourselves a biotech company. We’re truly at the intersection of cannabinoids and chemistry. We don't say we're in cannabis because we don't touch THC or psychoactive ingredients, but if you must bucket us, it’s cannabis because that's the basis of our molecules and ingredients. Getting into this three and a half years ago, I knew very little about the cannabis industry. It was a steep learning curve to get to know investors and players. My background looked very different from most cannabis entrepreneurs—many came out of growing and extraction. When they saw a female entrepreneur with biotech experience, many asked why I was doing this. I got that question a lot.

Jason Kirby: The stat going around is only about 2% of female founders get funded. You had forces against you. Walk us through your fundraising history and your most recent round.

Caitlyn Krebs: We raised a seed in 2021 led by L37 Ventures. My co‑founder, Randall Oostray, led the seed—great, but challenging. I realized we didn’t fit cannabis investors, and traditional biotech—despite our therapeutics—wasn't likely because of stigma. We have two parts: a B2B ingredient business (higher quality, purity, and consistency of cannabinoids) and developing therapeutics (drugs). Traditional biotech investors still have stigma around CBD; some LP agreements consider CBD a vice—even though it's federally legal via the Farm Bill. My favorite story: a respected investor understood what we were doing but said, “My mom smoked too much weed when I was growing up, so I just have this adverse reaction to it. I can't fund you.” You can't control biases in fundraising.

Jason Kirby: Right—many LP agreements include vice clauses (no alcohol, gambling, sex, drugs). Even if you don’t touch THC, it can be mislabeled and limit investor access. Also, founders often hear great feedback yet get a personal, anecdotal no. Better a hard no than endless maybes.

Jason Kirby: You mentioned the seed round. You also have your Series A, which recently occurred, correct?

Caitlyn Krebs: Yes—we closed, end of January, a $12M Series A led by Intrinsic Capital Partners (Pennsylvania). The process took over a year with many conversations. From the seed, I learned cannabis investors were likely best for us; biotech was off the table. We needed a cannabis investor who valued near‑term ingredient revenue and was willing to take the therapeutics risk. That Venn diagram is small; it took many conversations.

Jason Kirby: How many investors did you speak to?

Caitlyn Krebs: I probably spoke to 50–75, and reached out and got no’s from over 100 via email or intros. A large number.

Jason Kirby: Given the narrow focus, you can't just go to a generalist VC. Your pool was limited, but you met a good chunk who could invest.

Caitlyn Krebs: I talked to essentially all the cannabis investors. I also tried family offices via an intro group. For us, the story is complex; there’s so much education needed for generalists. Between stigma and drug development, it was too far for most. With angel groups, I learned they take a ton of time—lots of questions, very few invest. Founders should know when to say, “You’re either in or out.”

Jason Kirby: Exactly—tread lightly with angel groups. They get educated with no commitment, while you spend energy that’s better used elsewhere.

Jason Kirby: You said the raise took about a year. How do you define start to close?

Caitlyn Krebs: From being truly ready—deck, data room, financial model, customer traction—to close, about a year. Pitch evolved as we improved storytelling. In cannabis, another wrinkle: some investors take meetings without capital in hand. Ask, “Do you have capital today?” An anecdote: after a great convo, a reference told me, “He’s my buddy; he doesn’t have any capital.” That’s wasted time. Diligence the fund, too.

Jason Kirby: Many founders lack the network to background‑check. Some VCs take meetings knowing they can’t deploy, or they need your deal to pitch their LPs. If you see red flags, stop wasting time and tell them to send a term sheet when ready.

Caitlyn Krebs: Also, once you get a term sheet, that’s just the beginning. There’s much more diligence after: many more documents and customer discussions. Be ready.

Jason Kirby: Later stages bring even more diligence. From term sheet to close, how long did it take you?

Caitlyn Krebs: About four months—pretty quick because I’d met this fund two years earlier. We were too early for their seed mandate, but just right for Series A. They watched us hit milestones, so when timing aligned, it moved fast. Keep in touch with funds that might fit your next round.

Jason Kirby: Founders often hear “too early” and check out—better to play the long game with updates. During your process, where did that previously‑met VC come back in?

Caitlyn Krebs: Later. I had another fund take me to final docs and then pull out after significant legal spend. I had to restart. Persistence and grit—I'd close the Series A hell or high water. It paid off, but it wasn’t easy.

Jason Kirby: Many don’t hear those stories. I've been there—term sheet pre‑COVID, pulled as the world changed. Don’t spend the money until it’s in.

Jason Kirby: As a female founder with a strong track record and network, it still wasn’t overnight. Any challenges you felt were unique to you?

Caitlyn Krebs: Being a female founder raising capital is challenging in any industry. In cannabis, I looked very different—new to the industry, different background. Investors seek pattern recognition; I didn’t fit. I had to show how leveraging biotech/pharma is a differentiator. For example, I care deeply about intellectual property—critical in biotech. We’ve invested heavily in our IP, and the right investors value that.

Jason Kirby: Hopefully you set a new pattern so VCs recalibrate. There’s so much noise that pattern recognition can be a curse—successes like yours help diversify what “fit” looks like.

Caitlyn Krebs: I hope we’re cannabinoids 3.0—after earlier waves and busts—bringing new operators and experience to the industry.

Jason Kirby: While hustling to raise, you still had to run the company, hit milestones, and be present for family. How did you juggle it?

Caitlyn Krebs: It’s not easy. I believe I can build a company, be a good mom, and care for my health, but it ebbs and flows—sometimes work is intense, sometimes family needs more. Drug development is a marathon; I’m in it for 10 years. I aim for balance to avoid burnout; I’ve burned out before. My outlet is exercise—it de‑stresses and supports mental health.

Jason Kirby: Having an outlet is crucial, and your team and family should respect it. For me it’s cycling. It’s key to survive and thrive.

Jason Kirby: Team size—before seed, before A, and now?

Caitlyn Krebs: We’re capital‑efficient and largely virtual, leveraging CROs (outsourced chemists) and CMOs (outsourced manufacturing). We have contributors in Vancouver, Australia, Northern/Southern California, East Coast. We started as three co‑founders, added a CTO and advisors, and recently hired in therapeutics and manufacturing. Including CRO/CMO partners, ~20 individuals.

Jason Kirby: Smart to be capital efficient given the uncertainties in clinical timelines.

Jason Kirby: For investors evaluating cannabis companies, what should they look for?

Caitlyn Krebs: Team first—credibility and trustworthiness. In cannabis, you still see some shady operators. Differentiation matters—there are many CBD companies; we don’t sell beverages, we make ingredients. Also, bring in talent from outside cannabis to elevate operational excellence. VCs value that.

Jason Kirby: Once you got the term sheet, what was that process like?

Caitlyn Krebs: Valuation is the big topic—dilution vs. price. It’s more art than science. In a first deal that fell through, I pushed for an aggressive valuation and got it; later I was more modest and aligned with the firm. Don’t obsess about dilution—optimize for the capital you need to hit milestones. In today’s market, investors have leverage; pick your battles. The bigger negotiations for us were around protective provisions and control rather than liquidation preferences. I asked: do I trust this group enough to give up some control for the long‑term benefit? Yes.

Jason Kirby: Exactly—over‑optimizing valuation can cost you on control. It’s a 10‑year relationship—set it up for success.

Caitlyn Krebs: That was key—I like this group and see them as partners. It’s like a marriage; we’ll be together a long time.

Jason Kirby: Any yellow/red flags VCs raised that made you iterate?

Caitlyn Krebs: Some didn’t understand why you’d manufacture cannabinoids through chemistry when you can get them from the plant. The industry loves the plant. I developed analogies: vitamins are synthesized in labs—vitamin C doesn’t come from fruit anymore, and no one cares. Aspirin is another analogy. If they don’t grok quality, consistency, and purity, give them a relatable analogy.

Jason Kirby: That’s incredibly valuable. Caitlyn, this interview was phenomenal. How can listeners follow you and learn more about NaluBio?

Caitlyn Krebs: Follow me on LinkedIn (Caitlyn Krebs) and NaluBio on LinkedIn. Our website is nalubio.com.

Jason Kirby: Thank you! The nitty‑gritty that goes beyond headlines.

Caitlyn Krebs: Thanks, Jason. Persistence and grit—those are the two words I’ll leave entrepreneurs with.

Jason Kirby: Beautiful—I love that. Thank you.