2nd-Generation Entrepreneur Says Game Is Worth Stress : Challenge: Scientist left post to co-found his own biotech company and found himself plunged into a different world as a businessman.

Thirty-nine-year-old Gunnars Valkirs counts himself as a second-generation biotech entrepreneur in San Diego. As a scientist at Hybritech, he saw the rewards that a home-grown company could bring its founders, so he and three others decided to break off and start their own company.

“It’s like doing something on a dare, and, if and when you’re successful, there’s real exhilaration,” he said.

Forfeiting $75,000 in Hybritech stock options, Valkirs left the company in 1988 to co-found Biosite to develop more efficient drug-screening tests.

But, although Valkirs and the other co-founders knew they had to do some new scientific work before they could develop their product, Valkirs the scientist learned he also had to play the somewhat less comfortable role of Valkirs the businessman.

He needed money to achieve his entrepreneurial dream; the founders would invest their time and talent in the new company, but none of their own treasure.

At first, the infant company was financed with $600,000 from Biovest, a former venture capital partnership between Ted Greene and Tim Wollaeger. It was a minimal amount, Valkirs said, to get the company rolling by developing its basic technology to show to future investors, and to pay the salaries of the founders--which were set at a little less than what they were making at Hybritech.

Then began the search for the millions needed to keep the company going.

“That was a real traumatic time,” said Valkirs, who releases stress by playing tennis and volleyball and swimming, bicycling and lifting weights.

“At one point, we had negative assets. We were in the hole,” Valkirs said. “We were getting bridge loans--loans from the bank on the assumption that we would get venture capitalists to invest in the company.

“It was stressful. There’s a thing called ‘burn rate,’ when you’re spending more money than you’re making, if you’re making any at all. Venture capitalists know you’re running out of money, and they see it as a way to get the largest percentage of the company they can for the least amount” of investment.

“They’re willing to wait you out,” he said. “Then, when you’re absolutely starving and willing to take anything, they jump in and say, ‘Here it is.’

“It’s all part of the negotiating process between a start-up company and the capitalists,” Valkirs said. “They want to invest if the price is right, and the price quickly becomes right when you run out of money and you no longer have any choice. You either fold the company or accept their terms. It’s fairly ruthless.”

Today, the company is within months of marketing its first product, said Valkirs, who lives in Escondido with his wife, JoRene.

So far, five investment groups together have invested between $5 million and $10 million in Biosite. Valkirs won’t be more specific. Whatever money the company makes, the lion’s share will go to the venture capitalists who have put up the money, he said.

Is he having fun yet?

“Oh yeah,” he said. “I’d do it again.”