We recently asked Steven for his insights on forming a biotech start-up from forming business plans to getting funding. Here’s what he shared:
Can you tell us about your professional background? How did you become interested in helping biotech startups?
I was always fascinated by biotechnology and how the costs to do interesting scientific research was falling rapidly. I learned about Moore’s Law and how the cost of gene synthesis and sequencing were advancing five times faster than Moore’s Law. Ever since then I was fascinated about startups in biotech and the surrounding ecosystems.
Toward finishing my Masters, I became fascinated by the acceleration model and wanted to work with IndieBio EU, now RebelBio – The Global BioAccelerator Initiative.
At what point should a startup seek the help of someone with your expertise? Why is utilizing outside advice essential to the success of a new business?
Individuals with a solid impactful idea to improve outcomes using biotechnology or synthetic biology are welcome to chat with our team to see if they can take the idea forward. Don’t be afraid if you don’t have it all figured out, the model is designed to give newbies and seasoned pros the resources they need to build a stellar company.
What is the current climate for biotech startups? How easy is it to launch a biotech business today?
It has never been more feasible to become an entrepreneur in the biotech space and there are tons of qualified individuals with the right skills to become effective leaders in companies along with the business and technical acumen.
What are the unique challenges for launching a biotech startup?
The challenges are mainly focused in the regulatory and approval stages in order to successfully commercialize your product. Being lean and minimizing cash burn will also help you traverse the so called “valley of death” and get you further faster.
What’s your philosophy or approach to helping startups launch successful businesses? Where do your conversations with clients start? What challenges seem to surprise startups the most during the development stage?
Startups not communicating well, either within their own team, the community, or even investors causes untold problems such as mistrust down the line. The better teams are at communication and reporting the easier they will be able to address challenges they face by using their network.
What types of homework should entrepreneurs do before seeking funding and/or investment in their startup?
Startups should consider their total addressable market for their technology and assess how feasible the business would be to take it further over a five-year plan.
What are the components of a well-written business plan?
- Have clear, concise milestones mapped out over a five-year period.
- Highlight your total addressable market, i.e., the market you and YOUR startup can actually access realistically within one year, two years and so on. I see a number of companies dramatically say they are targeting a market of X Billion yet are not of sufficient scale to even attain
- Technical language should be revised regularly to remove jargon as not everyone will have a PhD in molecular biology reading your plan.
- It never hurts to use images rather than use text to save you time – a 1,000 words and all that.
When should entrepreneurs revisit and revise their business plan?
Entrepreneurs should constantly revise their business plan so it is as relevant as possible, as everything can change in an instant. Keep it to a maximum of 25 pages and create an executive level two-pager, also. Never forget that not everyone reading your technical sections are scientists so do your best to make that as concise and as easy to understand as possible. Remember what Einstein said “If you can’t explain it to a 6 year old, you don’t understand it yourself.”
What are the most common mistakes you see startups making when seeking funding early on? What should they do instead?
The best advice I can give is budget so that you have additional funding to accommodate the space between funding rounds in Seed and Series A. The regulatory pathway can be long and arduous so make sure to provide a comprehensive regulatory strategy with the relevant costs required mapped out to remove any potential risk factors.