Why Tundra Angels Invested in AIQ Solutions

All of us have someone that we love who has suffered with cancer.

Several years ago, my family and I went through the cancer journey with my father. During that journey, I specifically remember a time when we were sitting in the doctor’s office with the oncologist.

Sitting in that room, as the oncologist was laying out my father’s future treatment regimen, we had nothing but questions. How effective is this treatment going to be? Will it kill all the cancer? It was the most uncertain time of my life.

Then, a few months later, after my father’s chemotherapy and radiation treatment, we re-convened in the oncologist’s office. The key question was, “Did it kill all the cancer?”

At the time, I recall being surprised on how hard it was to answer that question.

He said something to the effect of, “We think so,” but still wanted to do another regimen of radiation as a cautionary measure in case it were somewhere else in his body.

I remember feeling very disturbed this is the most significant moment in a patient’s and a family’s life and we were making decisions based on inconclusive data. Like we didn’t have all the data points necessary to truly make a next steps decision with complete conviction and clarity.

Throughout this journey, it felt like the cancer had the leverage and the control over us, not us having control over the cancer. And that was terribly scary.

For anyone who has gone through a cancer journey with a loved one, I think the hardest part is feeling this lack of control.

Now, in the process of doing due diligence on AIQ Solutions, I learned that that the my father’s oncologist six years ago was actually lacking a key piece of data. But it wasn’t just that he lacked it - it was all of oncology. It was this missing piece of data that prevented the oncologist from speaking with 100% certainty. It was this missing piece of data that prevented us from having 100% clarity on what is going on with my father’s cancer.

This missing link of data, that AIQ Solutions provides, is something that oncologists don’t have today and cannot get from any other source.

Introduction to AIQ Solutions

I first heard about AIQ solutions at a conference in late 2024. I was sitting in an investor meeting with about 20-25 investors. At that meeting, each of the investors goes around and shares some of deals that they're interested. One investor brought up AIQ Solutions and spoke to the great potential of their technology and said they were fundraising. Then three investors later, this investor brought up AIQ Solutions. By the time it was the meeting was over, AIQ solutions have been brought up by about five different investors in that room. Before that meeting, I had known of AIQ Solutions, but nothing more than awareness of the name. I got the message. I should probably talk to AIQ Solutions. So, I got an introduction to Eric Horler, the CEO.

Impact ≠ Investment

Going into my first conversation with Eric, I knew that they had technology to help with cancer. Any technology that touches cancer tends to have an elevated sense of societal impact than other technologies that investor encounter.

My fundamental question going into my conversations with Eric was there seemed to be a societal impact, but did it make sense business-wise as an investment opportunity?

I’ve spoken to lots of startups with an incredible breadth of societal impact but that have fundamentally flawed business models, or product, etc. and are those not a great startup investment.

So I initially tried to stay objective and evaluate it through the lens of the underlying company, not factoring in the impact at all.

Additionally, a number of some of our good co-investor relationships had invested in AIQ Solutions - WARF Ventures, Capital Midwest, NVNG, Rock River Capital Partners, and more.

And yet, just because some of our co-investor relationships have conviction on it doesn’t mean that we have automatic conviction. We’ve passed on many deals that some of our co-investors are really into. Hence, we needed to develop our own conviction on it as well. See my article on “Two Types of Investor Conviction.”

What AIQ Solutions Does

AIQ Solutions is a B2B SaaS startup has patented technology for oncologists. The software takes in a radiology file and can identify every individual cancer lesion in a patient's body and measure spatially the rate of growth, toxicity, and disease burden of each individual cancer lesion.

The “A ha” Moment with AIQ Solutions

When evaluating a company, I sometimes have an “a ha” moment where everything clicks. I understand the significance of the company but also have a view of the future.

That “a ha” moment came when Eric showed me a real life example of their technology. I cannot do this any justice by typing it out, so to show the power of their technology, Eric provided me a link to a two minute Loom video of Eric walking through the AIQ report in a real patient example that you can view. It’s hyperlinked here. It is definitely worth the two minutes!

Understanding the Fit in the Workflow

So with this and other examples in mind saw the value of the software, but I didn’t have a sense for how it fit in the workflow. Namely, where does this fit in the patient’s journey, relative to the cancer center team?

As an aside, I personally love being a generalist investor - an investor that invests in a lot different industries. When you are a generalist investor and evaluating a company, it’s like you are going on an adventure. You’re trying to learn the rules of the market with intricacies and constraints and that the startup’s CEO, co-founders, etc. just take for granted.

You’re understanding a new market, and market dynamics between actors, with constraints, incentives, etc. It’s often like peeling back the layers of the onion where clarity comes along the journey. It’s an incredible amount of fun.

It is a journey of either building conviction or forfeiting conviction in the opportunity.

But it also often requires incredible amounts of patience. In venture capital, patience is antithetical to high growth. But I find that it’s only in the patience of evaluation that one can properly see the opportunity.

In the case of AIQ, I needed to understand the boundary lines of the solution on the hospital workflow - who the user is, who the payer is, and the role that they play or do not play in the startup’s solution. Where does this solution “fits” within the hospital, within the patient’s journey?

On that learning journey, there was one piece of the workflow that I didn’t understand. Over time, Eric was talking about radiologist and oncologist and the hospital dynamics. One of that that Eric said early on is that, “This is the only FDA-cleared software that that delivers directly to the oncologist.” The statement felt like it had significance in some way but I didn’t understand why. Over two to three calls, he said that statement several times.

Finally on the third call we had together, the sun was poking through my mental cloudiness enough to know what my hang up was. I realized that I was missing a key piece of knowledge - I didn’t understand the role of the radiologist vs. the role of the oncologist in the patient’s journey. So I asked Eric on the call.

Eric said, with poignant clarity,

“The radiologist’s job is to find disease - is this disease or not?

The oncologists job is to treat disease - is this responding to therapy or not?

So, the radiologist does not use AIQ Solutions. The oncologist does. We provide data to help the oncologist understand the effectiveness of cancer treatment and what to do next.”

That clarity was a threshold moment in my understanding of AIQ Solutions and the opportunity.

Primary Reasons Why Tundra Angels Invested in AIQ Solutions

A Breakthrough Insight: A Missing Critical Piece of Data in the Cancer Journey

Metastatic cancer is cancer that has spread from its original location to a different part of the body. Importantly, it is not one disease, but many diseases. Eric told me in due diligence that an renowned oncologist told him, “Every individual cancer lesion acts like its own disease, and it must be treated as its own disease.”

However, the standard of care is to only evaluate 3-5 cancer lesions per patient to determine if a patient is responding to cancer therapy. Hence, oncologists look at only a small sub-set of the cancer and treat the patient as if the patient has one disease.

The inventors of AIQ’s technology, Dr. Glenn Liu and Dr. Robert Jeraj at UW-Madison discovered something revolutionary. They discovered that cancer and its effect in the body has a deadly power law distribution.

They proved clinically that tumor resistance in less than 10% of lesions correlates to a poor overall response for the patient. Hence, there is an essentially a Pareto’s Principle 80/20 rule in cancer, or better put, greater than 90/10 rule in cancer’s effect in the body. Undoubtedly, in cancer treatment, 100% of the cancer must be wiped out. But, ultimately it is most important to destroy the lesions that are showing resistance before they can clone and spread.

As it stands right now, oncologists are determining the effectiveness of cancer treatment with the data they have available - often a PT scan, the report from the radiologist, and a blood test which indicates markers of significance of the cancer. But again, these markers indicate the levels in the entire body. There is no way to get down to the individual lesion level.

There is this chasm between what is able to be evaluated and what actually needs to be evaluated.

✅ Fundamentally, AIQ Solutions’s breakthrough insight is that when oncologists are making critical treatment decisions for each patient, a crucial piece of data is missing.

The key piece of data is this - which lesions in the body are the < 10% that are resisting the treatment?

AIQ not only gives visual clarity to those lesions that are showing resistance, but also goes a step further and also measures the growth, toxicity, and disease burden of each individual lesion over time. ✅

AIQ’s technology, powered by their breakthrough insight, fills this void of missing data, now empowering oncologists to have complete visual clarity when making the life-determining decisions for their patients.

Demonstration of Demand: The Physicians’ Behavior

Revenue is often a signal of customer demand. But the case of AIQ was unique because they have not yet received approval for their CPT code. Thus, there was no meaningful revenue to point to to verify demand. So we had to take a different approach.

In our due diligence, I asked Eric to get more clarity from the oncologist perspective on the value they saw in the AIQ reports. We prefer to have three customer references so that we have a sense for context. We were able to get potential access to one oncologist. But, I was concerned about anchoring a decision in a single user’s opinion, so we thought about what other data might paint a better, more holistic picture.

I hypothesized that if we could gain access to the data around how often the physicians’ requested the AIQ reports, it would paint a much broader picture than one singular conversation. But importantly, it would show behavioral data - which tells a much much more significant story than mere words. Eric and the AIQ team pulled analytics around anonymized data around oncologists reports per month and health system reports per month.

We were looking for two things: 1) How often do oncologists request the AIQ reports, and 2) Did the use of AIQ reports expand to other oncologists on the cancer team over time?

This data was pure gold for our due diligence process. The data showed that for each oncologist, frequency of reports continued to increase for each physician as the months went on. Secondly, when a hospital system started with one oncologist, a second started requesting their own AIQ reports several months later, then a third shortly after that, and eventually a fourth, etc. A true word of mouth effect was at play within the respective cancer center.

Frequency of use was increasing, and more users were being added over time - both behavioral signals of strong demand.

Defensible Moats

Specifics on FDA Approval

Through this due diligence process, we discovered something important. When the FDA gives approval for a device or software, the approval is specific to who the user is. The FDA sets the boundary lines of the solution of who it is intended for and not intended for.

One of that that Eric said early on is that, “This is the only FDA-cleared software that that delivers directly to the oncologist.”

I learned that the last part of that statement, “…delivers directly on the oncologist” is not just simple semantics. It actually highly significant because it positions AIQ’s solution is in a category of its own.

In conversations with Eric, we learned that that other startups are trying to cater to the radiologist as the user. These startups have solutions that help the radiologist answer the question, “Is what I am looking at cancer or not?” But AIQ saw the gap in the market with the oncologist in answering the question, “Is this responding to therapy or not?” When they applied for FDA approval, they intentionally constructed the approval application and were able to get their solution granted with the oncologist as the user. This unique carve out with the FDA approval gives AIQ a defensible moat as the only software company that caters to the oncologist.

Intellectual Property Portfolio

I believe this is the first software company that Tundra Angels invested in that has a robust IP portfolio and is a pure SaaS play.

AIQ Solutions have five patents and several more filed, around the unique technology involved in identifying the lesions, and measuring the growth, toxicity, and disease burden of each one.

We’ve invested in material science startups or companies with physical technology or processes, but this is the first one that is fully software with a robust IP portfolio.

AIQ Solutions is a very rare type of company - providing the vast scalability potential of a pure B2B SaaS play, but with lock down defensible moats - a robust IP moat, FDA approval, etc. It’s this “best of both worlds” opportunity.

Recommendation from Domain Experts

This is also where the power of an angel investor network comes into play. In the Tundra Angels group, we have a retired physician who has experience with oncology, a former medical sales rep, and a former IP litigator.

The retired physician explored the physician use case, the medical sales rep assessed the viability and the potential of a medical sales rep adopting and pushing this in their sales bag in the go-to-market strategy, and the IP litigator provided analysis and measured the potential defensibility of the IP portfolio.

We’ve had other opportunities where our domain experts look at it and there are several flaws in the company’s execution or point of view, and we end up passing on it. That often is the check and balance for us as an angel investor network.

In this case, all three of them came up with very strong responses and recommendations to invest in AIQ Solutions. This proved that AIQ Solutions should in fact, be pursued.

In addition to our three domain experts in Tundra Angels, we also spoke to Mike Partsch, Chief Venture Officer at WARF Ventures, as well as Gregg Fergus, serial biotech entrepreneur with a number of exciting exits. Both of them spoke highly of AIQ and its potential.

Closing Thoughts

As I opened up this article with my father’s cancer journey, I am saddened to say that several months after those moments in the oncologist's office, my father ended up losing the battle with his cancer. He was 66.

To make it more personal, my father did his undergraduate degree at UW-Madison - the same university where co-founders Glenn Liu and Robert Jeraj invented AIQ’s technology.

But this isn’t about my story and my father’s cancer journey. This is about all of us. We all likely have a version of this story whether it’s was or is a close family member, or a friend.

Yes, the scariest part of a cancer journey is that you feel so out of control.

But now, there is a different future.

At a number of cancer centers across the United States, oncologists are using AIQ Solutions’ reports and literally showing it to their patients with visual clarity where all of the individual cancer lesions are in the patient’s body, and the growth, toxicity, and disease burden of each individual lesion.

It swings the pendulum from being the most uncertain time in ones life to having visual clarity on what is actually going on in their body. Knowing how effective the treatment is, and conclusive data on what treatment decisions to make next.

This is a game changer for cancer treatment.

Tundra Angels is excited to invest in AIQ Solutions to help the oncologists and their patients take back the control in the cancer journey.

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