On June 3rd and 5th, life
sciences investors and entrepreneurs gathered at RTP’s NC Biotechnology Center
for CED’s Raising the Dough Series. The
focus of this program, sponsored by Hutchinson PLLC and Hughes Pittman and
Gupton LLP, was to expose members of early-stage companies in medical devices,
therapeutics and biopharma to investors’ perspectives as well as educate them
on best practices for raising capital for their ventures. Attendees had the opportunity to network,
listen to presentations from Advanced Animal Diagnostics, SBDTC, and the NC
Biotech Center, plus ask questions as part of an investor panel.
Speakers and panelists generously shared their
unique perspectives not only on how to fund early-stage companies but also how
to build a successful, meaningful and lasting business.
Patience
and Flexibility
A poll of the audience revealed that nearly all of
the 30 early-stage companies in attendance had only been around for 1-2 years
or less. The five panelists applauded
these entrepreneurs for seeking out opportunities to learn at events such as
Raising the Dough early on but also assured them of the potentially long road
ahead in reaching their developmental and financial goals. During his presentation, Preston Linn of
Advanced Animal Diagnostics recounted the years of hard work and waiting it
took the company’s CEO Rudy Rodriguez before substantial capital started
flowing in to the company. Founded in
2001, this life sciences technology firm did not generate revenue until
2013.
Advice for start-ups? Be diligent and determined in
business development but patient when it comes to acquisition of funding. Panelist Brian Carney of Harbert Venture
Partners noted how his firm often maintains relationships with entrepreneurs
for upwards of a year or two before a deal is even drawn up. The other panelists chimed in about similar
experiences and agreed that while the process of obtaining a grant can be
lengthy, the reward is well worth the wait.
Additionally, the panelists and presenters spoke on
the importance of flexibility in reaching business goals. While distinct end goals are crucial,
entrepreneurs in early-stage companies must be willing to explore multiple
avenues and keep an open mind when determining where and how to raise
money.
The
Power of Networking
As exemplified by the flurry of business card
exchange during breaks throughout the program, everyone in attendance was well
aware of how crucial networking is in building a successful business. Panelists and speakers stressed the
importance of persistent and aggressive networking when it comes to securing VC
and other donations.
Lookout Capital’s Walt Clarke reassured any nervous
members of the audience that as much as they are pursuing investors, investors
are pursuing them as well. Firms are
eager to find innovative and profitable ideas and are very willing to listen to
pitches. In fact, some investment firms
hold free events where entrepreneurs are invited to share their ideas and
business plans. Clarke also recommended that all entrepreneurs have their
concise elevator pitches ready at any moment, as an opportunity to make new
connections could be waiting at every corner.
Maintaining relationships with investors proves
valuable in many nontangible ways, as well.
Pappas Ventures’ Scott Weiner reminded the audience how critical connections
with investment firms can be even if they don’t end with venture capital or
angel investments. All panelists
expressed that they strive to help entrepreneurs who come to them by providing
advice and guidance in the right direction even if no formal deal is made. Jimmy Rosen urged audience members to see
interactions with investors not just as a chance to get money but as a resource
for company and product improvement, noting that sound advice is just as
beneficial as capital.
Know
Your Product, Know Your Market
In their presentation “Getting the Grant,” Mike
Carnes and Nick Trotta laid out several key points that entrepreneurs must
consider when navigating the complex ecosystem of life science funding. Foremost, they warned entrepreneurs not to
judge an agency’s name when considering grant sources. “Don’t rule out the Department of Defense or
NASA,” Carnes noted as an example of how a company never knows who could be
interested in its product. Panelist
Jimmy Rosen suggested that companies view their product on a broader scale,
which could lead to discovery of new applications and uses. Greater product utility attracts more
investors.
Panelists also advised attendees to be realistic
about the market they are entering.
Entrepreneurs must make sure that their ventures are scientifically,
commercially, and externally validated before bothering to secure grant
money. The life science field is
constantly adapting and expanding; thus entrepreneurs need to be aware of the
funding landscape in order to utilize all resources around them.
Overall, the speakers and panelists urged audience
members to believe in their product and its potential. Nick Trotta emphasized that his advice was
strictly directed towards entrepreneurs who seek real solutions to unmet
problems, not just people interested in funding a cool idea.
If you were unable to attend Raising the Dough, contact
CED’s Jane Royall (jroyall@cednc.org)
to learn more and get connected.
