Business Encounters: Life Scientist

Glossary

Entrepreneurship

Accelerator

 A program, group, or individual who connects startups with mentors, resources, funding. Builds upon the start-up’s foundations (already having an idea or business model in place) in order to advance their growth. Typically involves a limited period of intense support and effort with a significant milestone achieved at the end. They often also provide a space to work and shared resources and so overlap with incubators. In exchange, they typically get a certain percent equity in your company.

The following are examples of accelerators in the bioscience/technology development realm:

Angel Investor

An individual who provides capital to a business start-up, usually in exchange for shares or partial ownership of the company. Invests may be one-time or ongoing, depending on need.

The following are examples of angel investor groups:

Contract Research Organization

Contract Research Organizations (CROs) are hired by other companies to conduct clinical trials and other research support services. for example, they may used by research, medical, or pharmaceutical companies to outsource manufacturing and research.

What Are Contract Research Organizations? – Article presented by The Balance Small Business includes examples and definitions

Top 10 Contract Research Organizations to Watch in 2019 A descriptions of 10 CROs by Proclinical

The Triangle CRO industry: Where women rule. By David Ranii. News Observer, January 17, 2015. An article describing a prominent role for women in the NC Research Triangle area CRO industry.

Crowdfunding 

Utilizing social media and online groups to gather small amounts of capital from multiple people in order to fund an idea. This is known as alternative finance.

The following are two popular crowdfunding websites for science projects:

  • Consano: “[C]ollaborates with development and research administration offices at a variety of research institutions to source high quality and internally reviewed research projects.”
  • Experiment: “[A]n online platform for discovering, funding, and sharing scientific research… [Experiment is composed of] a team of scientists, designers, and technologists passionate about helping ideas grow.”

Dilutive vs. Non-Dilutive Funding 

Describes whether or not the investor in your project gets the right to some of your business equity and profits (called “dilutive” because your equity and profit is diluted by their investment) or does not get any of your equity or current or future profits (called non-dilutive because your equity does not get diluted by their investment). You can set aside some shares to not be diluted by a dilutive investment so that you do not lose ownership of your company.

Examples of dilutive vs. non-dilutive funding are:

  • Dilutive: Angel investors, venture capital, potentially your friends and relatives depending upon what arrangement you make with them.
  • Non-Dilutive: SBIR/STTR, loans, winning a contest (in most cases), personally financing it.

Exit Strategy

A plan by the entrepreneur to sell their ownership in the company to another company or investors. Usually detailed in the initial business plan, prior to starting the business.

The following articles detail potential exit strategies:

  • Five Smart Exit Strategies: Written by a business investor and mentor, details 5 exit strategies that might be employed when it’s time to make a switch.
  • How To Choose An Exit Strategy: Looks at options and considerations to make when it’s time to employ an exit strategy for a business.

Funding Rounds

The different stages of funding available for startups, which include seed/angel funding, as well as Series A/B/C funding or additional. Series funding rounds typically align with optimization (Series A), building (Series B), and scaling (Series C).

The following articles detail series funding, as well as additional funding types:

Incubator 

An organization that supports the growth and success of startups by providing physical and service needs such as physical workspace, shared facilities, guidance, and some funding. Today, many incubators also play some role as an accelerator, too.

The following are examples of incubators:

Inflection Point

A point at which the focus in a business changes in a major way, for example, when a startup goes from developing and proving the product to serving the customer’s needs and marketing. If you only enjoy the science development phase, this inflection point may be a time to consider selling the company.

The following are examples of inflection points:

  • When you develop partnerships
  • Make a key hire
  • Obtain major funding
  • Commit to the requirements of a paying customer, etc.

Intellectual Property

A collection of ideas and concepts; the ownership of ideas. Can be protected through patents, trademarks, or copyrights.

The following are locations where you can learn more about intellectual property protection in the United States:

  • United States Patient and Trademark Office: “The United States Patent and Trademark Office (USPTO) is the federal agency for granting U.S. patents and registering trademarks.”
  • U.S. Copyright Office: “The U.S. Copyright Office promotes creativity and free expression by administering the nation’s copyright laws and by providing impartial, expert advice on copyright law and policy for the benefit of all.”

Pitch

A presentation of a business idea to a potential investor. Can be a formal presentation, a conversation, or a written document. Related Term: Elevator Pitch – A briefer version of a pitch, good for use in a networking situation. Named after the short time you have during a quick elevator ride.

The following are resources to use when creating your pitch:

Seed Funding

Capital that initially starts a new business or idea, attained from individual assets, family/friends, venture capitalists, or angel investors. Seed investors often gain a stake in the business as a result of funding the start-up. The NIH’s SBIR and STTR programs are a major source of seed funding in the United States.

The following are articles that detail how to determine the necessity of seed funding and how to find it::

Technology Readiness Level (TRL)

A widely used metric of the level of development of a technology with the highest level being ready to be deployed.

Level 1: Basic Research
Level 2: Applied Research
Level 3: Critical Concept or Proof of Function Established
Level 4: Lab Testing/Validation of Alpha Prototype Component/Process
Level 5: Laboratory Testing of Integrated/Semi-Integrated System
Level 6: Prototype System Verified
Level 7: Integrated Pilot System Demonstrated
Level 8: System Incorporated in Commercial Design
Level 9: System Proven and Ready for Full Commercial Deployment

Full Descriptions of TRL Levels – Available through bnl.gov

Technology Transfer Office

These university offices are responsible for the commercialization and transfer of technology that occurs in the university. They facilitate bringing these research developments to the market. It is important to protect your intellectual property early in the process of starting a business.

The following are examples of technology transfer offices in universities and related organizations:

  • The Office of Licensing and Ventures, Duke University: “Mission: Through our partnerships with faculty, industry, entrepreneurs and investors, ensure that Duke innovations reach the marketplace for the benefit of society and to enable future investment in Duke research and innovation”
  • The Office of Research Commercialization, NC State University: “The Office of Research Commercialization (ORC) plays a crucial role in this by protecting and promoting University research discoveries and intellectual property, working with and guiding industry partners, and promoting the acceleration of startups. We’re driving economic growth by facilitating the commercialization of research discoveries.”
  • AUTM (formerly the Association of University Technology Managers): A non-profit engaged in supporting professionals in developing academic research “that changes the world and drives innovation forward.” Members work at universities, centers, hospitals, businesses, and government organizations around the world. The organization works with commercial partners leading to the creation of products, services, and start-ups. Support for members is wide-ranging from corporate engagement to intellectual property protection.

Valley of Death (Funding) 

This is the time from the initial funding received by a startup company until it starts generating revenue, when it is difficult to obtain funding because the product and business are not yet proven but money is still being spent to develop the product, obtain any approvals needed, and market it. The name comes from the fact that this is when many startups fail.

The following are examples of ways to span the funding Valley of Death successfully:

  • Accumulate money ahead of time.
  • Keep a source of income until you are through this period.
  • Consider crowd funding
  • Seek business grants and enter contests
  • Obtain loans or lines of credit
  • Seek funding from friends and family
  • Join an incubator for startups that offers cash, resources, and/or consulting
  • Barter service for service
  • Form a joint venture with an organization that benefits from your product
  • Commit to your major customer and offer perks such as meeting their requirements.

Venture Capital 

Funds provided to a startup that is seen as having long-term grown potential. Controlled by an individual or group, these investments are made in return for large ownership of the business and is expected to have a high rate of return.

The following are examples of bioscience/biomedical venture capitalists in North Carolina:

  • Golden Pine Ventures: “The company’s mission is to aggressively seek out biotechnology and biomedical opportunities developed by leading researchers and grow them into valuable businesses.”
  • Idea Fund Partners – Venture Capital. Co-founder Lister Delgado, seed and early-stage technology-focused.
  • Pappas Capital: “For nearly 25 years [they] have been investing in and building innovative companies that are developing the next generation of life science products and technologies.”

Research

Electronic Research Administration (eRA) Commons 

The online NIH administration website for interacting with granting agencies throughout the life of a grant, from application to final reporting.

eRA Commons

Omnibus Solicitation

A document published by Health and Human Services (HHS) describing the funding opportunities they offer for support of small businesses having technical ability to do research that meets the missions of their agencies on the topics described in the document.

The full names of the documents and locations are:

Other Glossaries of Research Terms

The Glossaries for the NIH and NSF are:

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR)

(SBIR/STTR are programs of the federal government that provide seed funds to small businesses to support research and development with potential for commercialization.

The distinctions between SBIR and STTR are:

  • SBIR funds small early stage businesses that are developing and want to commercialize innovative biomedical technologies.
  • STTR fund small businesses that are developing and want to commercialize innovative biomedical technologies in collaboration with a non-profit research institution. The business must perform at least 40% of the work and the research institute must perform at least 30%.