Business accelerators have become fashionable, and for good reason. They offer aspiring entrepreneurs access to expert mentors, marketing and media resources, funding opportunities, and office space. In part 4 of this multi-part article series I describe still unmet needs that existing and future business accelerators will need to address to better serve Life Science entrepreneurs. The goal is to help academic research institutions learn what works and what doesn’t as they begin to construct incubator programs of their own.
To read the previous articles in this series please visit the links below:
- Building on the accelerator model – Introduction (part 1)
- Building on the accelerator model – MassChallenge (part 2)
- Building on the accelerator model – MassCONNECT (part 3)
While some accelerators do a better job than others, my experiences in the programs described have also highlighted key areas of unmet need. Most useful for early-stage companies is a sundry fund from which to pay for peripheral expenses including business incorporation, website development, branding, multimedia (e.g. 60- to 90-second video pitch) and legal expenses (equity distribution, non-disclosure and consulting/advisory board agreements, intellectual property filing, licensing, etc.).
Teams selected for a finalist round in a business accelerator should be awarded a small cash gift ($5-10K) to help subsidize business expenses. The Harvard iLab’s Deans’ Challenge does this, which goes a long way in covering many of these early establishment costs. This is of especially important consideration for university biomedical accelerators that often award larger grants in the $250K-500K range for direct costs to transition promising new technologies out of the lab, but fail to set any monies aside for associated indirect costs necessarily incurred by the inventors to do so. Nevertheless, technology development grants are crucial – particularly for very early stage technologies that require further incubation to sufficiently “de-risk” the venture for private financing.
One way academic research institutes can facilitate this transition for their most promising technologies are through PILOT ($50K) and DRIVE ($350K) grants, such as are provided by the Boston Biomedical Innovation Center (B-BIC), a new National Institutes of Health initiative to investment in early-stage technologies which include additional (non-monetary) support provided through business development expertise and entrepreneurial mentorship. Project periods are for roughly 18 months and are served on a rolling application deadline. Awards are based on successful implementation of the project plan and milestones set out in a detailed research and business plan.
In addition to applying for (and being awarded) technology development grants such as the B-BIC, I found it necessary to found our biotechnology company, Platelet BioGenesis, during the early proof-of-concept stage to cover the indirect costs not otherwise supported by academic grants. Doing so helped us retain control of the infrastructure that is needed to transition their technology from the validation phase (the initial milestones of which are usually supported by federal grants) to the commercialization phase (which typically requires private investment), which is important for founder scientist-entrepreneurs to do since they often understand what is needed to realize their vision better than anybody. This, of course, presents challenges of its own – foremost among them being the managing of intellectual property, which will be discussed in my following post.