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  • Publication
    Strategic Planning and Costs of FDA Regulation
    (2019-09-30) Van Batavia, Jason; Goldenberg, Seth J
    For latest version: please go to The regulatory burden for medical device innovation varies based on the specific Food and Drug Administration (FDA) pathway required, and early strategic planning for this regulatory burden is critical. The regulatory strategy and milestones must be integrated with other key components of the innovation process and informed by an understanding of and/or direct communication with all the stakeholders involved, including the customer, engineering/manufacturing team, research and development team, safety/regulatory bodies, the potential payers, and investors. While it is almost never too early to initiate contact with the FDA, inquiries through 513(g) petitions or pre-submission meetings should be focused on specific questions and goals to make the most of these engagements. Regulatory assessments and consultation with experts require upfront costs, but saving time and money in the long term by designing an efficient regulatory strategy can be the difference between success and failure for the academic entrepreneur. Fundraising (private and public) must be considered in the regulatory strategy, as approximately 90% of fundraising is based on claims tied to regulatory milestones.
  • Publication
    Nonprofit and Foundation Sponsored Research: Developing New Models of Collaboration for Research and Development
    (2019-09-27) Esparza, Erin
    For latest version: please go to In recent years there has been an increasing need for investigators to secure alternative sources of funding, and nonprofit organizations have become integral parts of the research and development process. Venture philanthropy is a relatively new concept of cooperation in which nonprofits not only fund research but also take a businesslike approach to product development, commercialization, and collaboration with industry partners. Potential opportunities that come with nonprofit funding can include better patient access, more early funding for research and development, and increased networking opportunities. Investigators must be prepared for potential pain points such as managing conflicts of interest, managing intellectual property, and ensuring prior art is accounted for during the application process. With proper management and transparency, involvement with a nonprofit foundation has the potential to be greatly beneficial to both the investigator and the foundation.
  • Publication
    SBIR/STTR Grants: Introduction and Overview
    (2019-09-27) Lee, David; Stein, Elliot; Gooneratne, Nalaka
    For latest version: please go to The purpose of the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) grant mechanism is to stimulate technological innovation through facilitating private-sector commercialization of research advances. Small business entities do not need to relinquish equity in exchange for SBIR/STTR funding. A key difference between SBIR and STTR grants is that the STTR requires university participation, which is optional for the SBIR. SBIR/STTR applications can be submitted in conjunction with more traditional R01/R21 grant applications and are ideal for exploring the commercialization potential of research results.
  • Publication
    Writing Business Plans for a Life Science Startup or Clinical Program
    (2019-09-27) Conrad, Maire; Chan, Vanessa; Miller, Linda
    For latest version: please go to The business plan is an important tool for raising capital, finding strategic partners, recruiting, and providing an internal guide on how to drive a company’s growth. The plan should include an executive overview, introduction to the management team, market and competitive analyses, value proposition, operating plan, financial projections, and potential risks. The plan should be concise, well written, and dynamic. Details behind key assumptions should be included. Common business plan pitfalls include focusing only on the product without framing it in the context of the consumers/patients, the market dynamics, and the ecosystem in which it will be launched, as well as giving financials that are too aggressive and precise given the stage the company is in. New founders should consider engaging experts to help test assumptions as they develop the key parts of the business plan, including the financial projections. Many of the same concepts for writing a business plan for a startup apply to creating a business plan for a new clinical program or expanding operations within a health system.
  • Publication
    Angel Investors
    (2019-09-27) Ramachandran, Abhinay
    For latest version: please go to Angel investors are wealthy individuals who use their personal assets to invest in startups, typically in early stages before venture capitalists. While angel investors have typically invested more heavily in earlier stage startups, this paradigm has been shifting in recent years. Angel investors are likely to take smaller percentages of equity than a venture capitalist, or use debt-convertible notes, and they may want board representation. It is vital to have investors whose goals are aligned with the company’s. There are six key points investors are listening for in a business pitch: concept, market size/growth, management team, business model, exit scenario, and valuation.
  • Publication
    Equity Allocation in Startups
    (2019-09-27) Patel, Neil; Dakin, Adam
    For latest version: please go to Founders should not necessarily split equity evenly among cofounders; unequal splits can help prevent team dissonance and renegotiations as the company develops. The timing of equity splits is critical, with most experts favoring early discussions of ownership. Companies should strive for capitalization tables that are simple in structure and easy to understand. Capitalization tables should have equity pools set aside to anticipate non-founder compensation of new hires. Equity dilution from future investors should be viewed in terms of the business’s overall financial strategy.
  • Publication
    Startup Company Formation and Management
    (2019-09-27) Cai, Jenny; Doranz, Ben
    For latest version: please go to Startups are often built with a small team of talented and highly motivated individuals who are passionate about the company. The environment of a startup is often demanding, with time-sensitive projects and limited resources. The three common types of business entities for a startup are an LLC, an S corp, and a C corp, and each offers its own advantages based on the startup’s trajectory and goals for growth. Delaware’s corporate laws and statutes are pro-business, and many companies choose to incorporate in Delaware. State law requires that corporations hold shareholder and board of directors meetings to vote on crucial company decisions and document them officially in meeting minutes. Seeking counsel from a tax advisor and a legal advisor early on can potentially contribute to a startup’s financial prospects both in the short and the long term.
  • Publication
    Accelerators and Incubators
    (2019-09-25) Zappala, Fabiana; Rinkunas, Maureen
    For latest version: please go to Incubators and accelerators are powerful resources that offer critical support to startups at progressive stages in their development. Each program has different goals: general business training, preparation to raise funds, creating a network of mentors and potential customers, etc. Startups can sometimes complete these programs without any associated costs, but they might need to dilute ownership. Before committing to an incubator or accelerator program, there are a number of considerations academic entrepreneurs should evaluate: ○ Is the program the right fit for the company’s needs? ○ Is full commitment to the program’s requirements possible? Corporate-sponsored and corporate-run accelerators may provide the following additional advantages: ○ Potential commercialization partner and/or investor; ○ Field-specific expertise and technical mentoring.
  • Publication
    SBIR/STTR Grants: Application Guidance
    (2019-09-30) Stein, Elliot; Lee, David; Gooneratne, Nalaka
    For latest version: please go to Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) grants provide a valuable opportunity to receive non-diluting capital. The process of applying for an SBIR/STTR grant has several steps and can take months to complete. SBIR/STTR proposals take the form of typical grant proposals, except the former are shorter and have a lower requirement for preliminary data. An academic entrepreneur should not expect to receive SBIR/STTR funding on their first attempt at a proposal. There are several common pitfalls during the application process, and careful consideration of these issues can substantially improve an application.
  • Publication
    Seeking Venture Capital Investment
    (2019-09-27) Stein, Elliot; Topche, Brett
    For latest version: please go to Venture capital (VC) firms exchange cash for equity or equity-like securities. Venture capital funding most often occurs in the early to middle stages of a company, before an acquisition or an initial public offering. Typically, VC firms make a relatively large investment, ranging from 1 to 30 million dollars, though in more recent years, “micro-VCs” that write smaller checks have become more common. Often, a company will raise money from several venture capital firms, either simultaneously or in subsequent transactions. Investors expect a 3–10x+ return on investment for any given investment, depending on the stage of the company at the time of investment. Venture capital firms may protect themselves by retaining the right to invest in the future, by protecting their equity from dilution, and through special voting rights including blocking rights on certain corporate actions and often through representation on the Board of Directors. Venture capital investment term sheets typically set a new valuation of the company.