Case: Leslie Bowen, PhD, Starting a Business, Part 2
Case Name: Leslie Bowen, PhD
Description: 41-year-old Leslie Bowen, an associate professor and neuroscientist at a university, has a business idea based on selling lab-grown neurons that she will produce using a novel approach.
Review of Part 1: Leslie has been discussing her idea for starting a business based on her academic research with her university’s Technology Transfer Office (TTO) and completed some early market research. The results support launching a business.
Scenario, Part 2: The TTO recommended that Leslie reach out to entrepreneurs who are a few steps ahead of her in the entrepreneurial process to learn tips on how to develop a commercialization plan.
Leslie talks with a successful woman entrepreneur, Mandy Jones, PhD, who left the university to start her own business seven years ago.
Hello, Mandy. I understand that you started your company while you were still at the university. That is what I would like to do. I’d like to have the business as a side effort. How hard was that for you?
That’s the way I started. It can get tough, I’ll warn you. I found it too hard to manage both my business and my academic responsibilities because there were times when the business demanded all my attention. So I quit my professorship. You can have a partner who helps you manage the business side, but I tried to do it all myself. Some universities let you leave for a while and come back, but mine would not.
Thanks, you’ve given me something to think about. I’m also trying to understand all the support available through the NIH to start a business. Did you take advantage of any of the commercialization support?
I did. I completed a program during Phase I called I-Corps that I found very helpful. I gained tons of entrepreneurial skills in just a couple of months. It improved my understanding of my customer plus my ability to talk to nonscientists about my research, use commercialization terms, and understand the language and perspective of investors.
What about the NIH program Technical and Business Assistance? Would you recommend participating in that?
Yes, that program has grown in recent years. You can ask for TABA funding to help with commercialization in both your Phase I and Phase II proposal. Each phase addresses a different need. I would take advantage of it.
I don’t understand how a life science business can raise enough money or find the time to succeed. Some of the equipment needed is super expensive, and setting up the manufacturing process or running a clinical trial can take forever and takes more money than you can get through an SBIR grant. Are investors willing to come up with that much money?
Angel investors are willing to provide early funding for an idea with great potential. They typically want to provide guidance to help ensure success in moving to the next phase of development. Venture capital investors will be interested once it looks like they will get a good return on their investment.
So besides SBIR grants, how do you keep going with your research while you wait to find enough investors?
Raising money is not easy and can take time, so be sure to also minimize your costs and product development time. For example, if the university does not agree to let you start your business using your on-campus lab, rent lab space and equipment in an incubator instead of trying to set up your own laboratory. Find partners who can supply the skills and strengths you are missing at a low cost in exchange for equity in the company. Or contract development of a prototype for mass production to a prototyping company to save time.
It helps to talk to someone with experience to learn my options.
That is so important in entrepreneurship. Keep talking with people and organizations with more experience or who are dedicated to supporting research translation.
This sounds like great advice, thanks! Can I call upon you again when I reach the next stage?
There’s a lot to think about. Thanks! I sure appreciate being forewarned about these things.
A text from Mandy later that day: Leslie, I thought of one more tip regarding new intellectual property that may arise during your venture. Make a detailed conflict of interest plan before you start, and go over it carefully with your supervisor at the university. Make sure it is not so constraining that you cannot start your business. Talk with other faculty about their conflict of interest plans, and make sure you carefully document your time and discoveries in your university and startup labs.
Review Part 1 of this case
Innovation Corps (I-Corps™) – I-Corps (NIH I-Corps or NSF I-Corps) is a seven- or eight-week program that provides entrepreneurship training, including business planning to Phase I recipients, who receive up to $55,000 to cover program costs.
Programs for Academics – Describes the NIH SEED programs and resources available to help academics develop healthcare products from their research discoveries.
Did You Know? If you have already developed a product and want to sell it to the government, visit Sam.gov to learn about contract opportunities.