Life Sciences companies don’t move from founding to exit over the course of a year or two; it happens over many years or a decade. That’s typically enough time to get things right, but also affords plenty of opportunities for mistakes.
We recently hosted a web panel discussion on October 9th moderated by Caroline Hoedemaker, founder of tTAp, a Life Science Accelerator. The panel of experienced life science company founders discussed the many challenges of taking a nascent scientific concept to a funded life science company. Attendees were able to hear real-world experiences from scientific business founders who have worked the trenches from founding to funding.
This is the second installment of the "Founding to Exit" series, if you missed the first discussion, you can watch and get caught up here.
In advance of the web panel discussion, we sat down with Caroline Hoedemaker to discuss some of the challenges that life science company founders and leadership may come across as they make the journey. We asked Caroline a few critical questions to get a glimpse of what to expect and to learn the perspectives that the web panel will offer.
ShareVault: What’s the biggest challenge that inventors or scientists face when moving their discovery forward?
Caroline Hoedemaker: The biggest challenge in this space is figuring out how to translate more science into practical application. Scientific discovery takes time and effort, sometimes decades, which is part of the challenge. In my opinion, there’s more than enough interesting innovation out there, but hardly any of it is being translated to where it can actually help patients. Why does that gap exist and how do we bridge it? The number one issue inventors face is bridging that gap between nascent science and reality and practice. To do that, inventors need to get out of their comfort zone while still focusing on their greatest value—their innovation—and their knowledge on how to make that innovation work. Inventors are often very passionate about their innovation, but the challenge is to get others, with different talents, passionate about it too.
The one thing no one that I know of has found a way to do is get more than twenty-four hours out of a day. Translating science into a practical application takes a lot of time. Whether it’s a business plan or budgeting or finding lab space or building a team—it all takes time and resources. How do you strike a balance between managing a business and managing the science? Very often that means recognizing that there is too much work to do on your own and bringing in the right people with the right skill sets to share the burden. When you do that successfully you become a lot more interesting to partners and investors because you’ll be able to demonstrate that you’re moving forward, with help, in a timely fashion.
SV: Do you have any advice for finding those necessary skill sets?
CH: A characteristic I see very often is that people are very comfortable in the arena where they have experience. Whether that’s academia or a medical profession or industry or consulting, people tend to have their comfort zones. You may be a very successful academic or medical doctor, so that’s where your focus is, but that’s often too narrow a focus to move an innovation forward into a practical application. The most comfortable thing you can do when building a team is bringing in someone with a similar background to your own, but that’s when it becomes important to look outside the box and recognize the need for diverse skill sets. What are the skills that you need to build your business that you don’t currently have? That could be niche external consultants such as accountants or lawyers or it might be skills that would be better managed in-house as part of your executive team, such as business management, raising funds or writing grants. The people who are most successful are the people that can recognize those needs and bring in people with complementary skill sets.
There’s also a personal element. The best team is a team that gets along together. It’s very important that you like and trust each other because it’s likely that you’re going to be working together for a long time. It’s important to respect and trust the skill set that each individual brings. Recognize the areas where you lack expertise or interest and bring in those skill sets and you’ll maximize your capabilities.
SV: When is it viable to start a company? Is proof of concept enough?
CH: That’s a difficult question because proof of concept can mean radically different things for different companies. For some companies, it could be demonstrating efficacy in mice. For others, it might be the filing of a patent. It could be moving into preclinical or when the first patient positively responds. I don’t think there’s a single answer. It really comes down to a conjunction of scientific development and finances.
SV: Should an exit always be top of mind?
CH: Again, like proof of concept, an exit can mean different things to different companies. You have to consider who is involved in the exit and what it means to them. Does it mean you’re being acquired? Does it mean that your investors want to get their money back? Is it some kind of royalty stream for the core team? It’s really about how the involved parties are going to be compensated. I believe you have to lead with the science and think about financials all the time because it helps to hone your focus and it’s instrumental in how the science is moved forward to deliver results.
SV: What are some of the biggest mistakes you see founders making?
CH: One of the biggest mistakes I see founders make is trying to be something they aren’t and forgetting where they bring the most significant value. If you’ve invented something, that is unique, and you should never lose track of how exciting and special that is. It’s okay to branch out and try to understand more about other aspects of the business, but unless you can duplicate yourself, you’re limiting the company by taking on roles and responsibilities that limit that science’s potential to do bigger things. My advice to founders is to remember where they bring the greatest value and maximize that value by having others take on roles where they bring experience and interest.
To receive additional insight and listen to tales from founders first-hand, click the button below to view the web panel discussion, "From Founding to Exit - Part II: Scientific Founders From Discovery to Financing Growth." You won't want to miss it!
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