How do you get companies or investors to support your project in a startup world where “many are called, few are chosen?”
Vector attended a panel last week on the subject, moderated by Ryan Dietz, Senior Licensing Manager at Boston Children’s Hospital’s Technology and Innovation Development Office (TIDO). The panelists were:
- Tom Luby, PhD, Senior Director, New Ventures, Johnson & Johnson Innovation, Boston
- Carl Berke, PhD, Co-Founder and Managing Director, Mass Medical Angels; Partner, Partners Innovation Fund (part of Partners HealthCare); Diagnostic Technologies Representative, Boston Biomedical Innovation Center (B-BIC)
- Kevin Bitterman, PhD, Partner, Polaris Partners
Below is their distilled advice for physicians and scientists seeking to commercialize a drug discovery, device or health app.
Potential investors are going to evaluate you, perhaps even more than your project or technology. Are you set up to deliver results? “Our best companies have all had their near-death moments,” Bitterman told the audience. “That’s why it comes down to who’s at the helm of the ship.” Luby is drawn to people “who can think of an approach that’s transformational. It’s got to be someone who’s thoughtful, thinks a little differently, has an insight others don’t have.” Bitterman looks for people whose passion can infect many others around them.
Assemble a strong team. Your team needs someone with a business perspective who can understand how potential licensees or investors will evaluate your offering, and who is the ultimate purchaser of your product. It’s also important to have corporate counsel (some will provide initial services pro bono). Finally, find someone who is comfortable pitching the project — if you’re a scientist, that may not be you. “You have to think like a salesman,” noted Berke. “If you get a ‘no,’ you have to see the ‘no’ as just the first step to ‘yes.’”
Your team’s best leader may not be you. “You’re the talent and the asset, but you’re not the producer,” said Berke. A better spot for you as physician/scientist would be the Scientific Advisory Board. Some venture firms have a stable of people who are available to take on the CEO role.
You don’t always need to have done all of your experiments before talking to investors. Some firms are happy to look at a promising idea with at least some good data to back it up, even if they won’t invest at this stage. You can get advice and start to build a dialogue. “We’re always very hungry to find the next generation of academic entrepreneurs,” said Bitterman. Luby agreed: “I would first take your idea and see if it’s got legs before you do a lot of work on it.”
Network. Attend forums attended by people in industry, even if your project is very early stage. The people you chat with can guide your work forward and help you strengthen your eventual case — or even make a crucial email introduction. “Personal interactions may lead to longer-term conversations and relationships,” said Luby. Berke agrees: “You’re not going to close the deal there, but you’re going to circulate with people who are in the mix.” Luby also suggests hanging out at places where you can pick up information, such as incubators and shared lab spaces like LabCentral.
Be open to negative feedback. A lukewarm initial reception to your idea is an opportunity to learn what questions you will need to answer when you ultimately make your pitch. “Ask, ‘what would you want to see to make this idea viable?’” advised Bitterman. You should be able to ask critical questions of your project or product, and know when to cut your losses rather than do one more experiment.
Seek opportunities for mentorship. Mentors have advice and connections and can help you find partners and business resources. Many competitions such as the GlaxoSmithKline business plan competition or, in Massachusetts, the Mass Challenge and Hacking Pediatrics, provide not just cash prizes but access to mentors and events where you can network.
You don’t always have to have a patent. In some cases, intellectual property is everything, and patents should be sought aggressively. But for other projects, “it’s unclear that what’s coming out of the lab is even patentable,” said Bitterman. In that case, it’s important to be the first mover. That’s also true for IT projects, where patents are hard to get, said Berke.
Some products are inherently harder to pitch. If you have a health app, competition will be stiff, since the barrier to market entry is so much lower than with a drug or device. You have to demonstrate that people are going to want your app. If you have a diagnostic, you must not only show that your test is better, but demonstrate that its use will improve patient outcomes. That’s a high bar, so get input from payers early on. Diagnostics tend to do best when paired with companion therapeutics.
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