This document provides helpful tips for aspiring entrepreneurs from a venture capital perspective. It emphasizes the importance of protecting intellectual property, understanding regulatory requirements to bring products to market, choosing advisors carefully, and setting realistic expectations for fundraising and valuation. Additional tips include focusing presentations on business models and clinical data, seeking experienced investors, and having fun with the entrepreneurial process.
Helpful Tips for Aspiring Entrepreneurs from a Venture Capital Perspective
1. Helpful Tips for the
Aspiring Entrepreneur -
A Venture Capital
Perspective
Emmett Cunningham M.D., Ph.D., M.P.H.
Partner, Clarus Ventures, LLC
www.clarusventures.com
2. McCormick Place, Chicago
Spotlight on Innovation in Ophthalmology
From Theory to Therapy
Monday, October 20th, 2014
12:15PM - 1:45PM
GRAND BALLROOM S100C
3. Protect Your Ideas (IP)
Is it still intellectual
property theft if the
ideas aren’t intellectual?
• Draft a dated / signed invention disclosure
• File with counsel / tech transfer office
4. File Before You Publish or Present
“Prior art” is no longer patentable
7. Understand the Difference
Between a Company and a Product
Tools
Instruments
Small market devices
Small market drugs
Multiple products
Large markets
Product Company
8. Understand What it Takes to Bring Tools,
Devices, and Drugs to Market
Tools
Instruments
510(k) Devices PMA Devices
Drugs
< $500K
1 year
$5-50M
3 - 5 years
$50-200M
5-10 years
Ophthalmics
Individuals TeamsNon-Ophthalmic drugs can cost over $1 billion
14. Understand Funding Sources
Stage
Source
Of Funds
Funds
Required
Availability
Of Funds
Modified after: Center for Venture Research – University of New Hampshire
Pre-Seed Seed / Startup Early Late
Founders
Friends
Family
SBIR / Foundations
Angels / Incubators
Institutional Investors (VC)
$50K $100K $1M $100M
Risk
Risk Not drawn to scale!
“Innovation Gap”
High
Low
15. $651
$665 $660 $666
$670
$688
$706 $701
$702
$656
$674 $675
$820
$810
$779
$764
$740
$763
$770
$741
$727
$670
$500
$550
$600
$650
$700
$750
$800
$850
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
NEI (Actual) NEI (2014$)
NEI Funding Flat, but …
Down ~25% after Inflation (2014$)
28% of RO1s Funded
Inflation Calculator
http://data.bls.gov/cgi-bin/cpicalc.pl
Data provided by :
Matthew McMahon, Ph.D.
Director, Office of Translational
Research, NEI
$0
16. Founders, Friends, and Family
(Typically < $500K)
“Yes, that is me.
We’re a very new company.”
“You’ll never guess who
I bumped into today…”
Founders
Family
Friends
17. Research Grants and Foundations
(Typically < $1M)
tgf
The Glaucoma Foundation
info@glaucomafoundation.org
inforequest@rpbbusa.org
info@jdrf.org
18. Angel Investors
(Typically < $2M)
Ask local entrepreneurs, lawyers, etc…..
https://www.cbinsights.com/blog/top-angel-groups-mosaic/
Top 20
Healthcare
Angel Groups
19. Angel Investors
(Typically < $2M)
https://www.cbinsights.com/blog/healthcare-periodic-table/
• Launchpad Venture Group
• Central Texas Angel Network
• Houston Angel Network
• Keiretsu Forum
• Maine Angels
• Sand Hill Angels
• Life Science Angels
• Tech Coast Angels
• BlueTree Allied Angels
• Queen City Angels
• Desert Angels
• Golden Seeds
#1
www.angelcapitalassociation.org
Ask local entrepreneurs, lawyers, etc…..
20. Incubators & Accelerators
(Various Models - Typically < $2M)
www.forsightlabs.com
And many universities…..
http://www.jnjinnovation.com/
http://www.roche.com/research_and_development/partnering.htm
Ycombinator
www.ycombinator.com
http://startx.stanford.edu/
21. Innovation Gap Widening
Stage
Source
Of Funds
Funds
Required
Availability
Of Funds
Modified after: Center for Venture Research – University of New Hampshire
Pre-Seed Seed / Startup Early Late
Founders
Friends
Family
SBIR / Foundations
Angels / Incubators
Institutional Investors (VC)
$50K $100K $1M $100M
Risk
Risk Not drawn to scale!
“Innovation Gap”
High
Low
29. 50%
100%
150%
200%
250%
300%
350%
400%
450%
2004 2006 2008 2010 2012 2014
10-year Stock Price Performance
53%
292%
Source: FactSet as of 09/16/14
1 Medtech index consists of medical technology companies traded on North American exchanges with market capitalizations over $1bn
78%
Returns summary
10 yr 5 yr YTD
Medtech1
63%
Biotech
235%
S&P 500
87%
16%
19%
9%
Best Three Years for Biotech in a
Decade
33. Ask for Enough to Get to an
Important Milestone (Data) …Plus
…time to raise more
money….
34. Seek Out Experienced Investors
“Your financial goal is to break even?
You must be an experienced investor!
35. Come to Pitch Meetings
Practiced and Prepared
He’s Expecting you………..
36. Take the Time to Write a
Concise Business Plan
• Consolidate your ideas
• Understand the strengths and
weaknesses of the
opportunity
• Learn the market dynamics
• Construct a realistic budget
and timeline
• Use of Proceeds ; Milestones
37. Focus on Business Model and
Confidence in Rationale – Science and Data
Clinical Results
38. It’s All About the
PowerPoint Presentation
Use Pictures and Graphics
48. Plan to Join Us . . .
7th Annual OIS@AAO
Las Vegas, Nevada
November 12th, 2015
4rd Annual OIS@ASCRS
San Diego, California
April 16th, 2015
www.ois.net