Transcript Do You Want to Start a Company? or Lessons from Babs’s Excellent Adventure Babs Soller, PhD Founder, President & Chief Scientific Officer Reflectance Medical Inc. Prof Emeritus.

Do You Want to Start a Company?
or
Lessons from Babs’s Excellent Adventure
Babs Soller, PhD
Founder, President & Chief
Scientific Officer
Reflectance Medical Inc.
Prof Emeritus of Anesthesiology,
UMass Medical School
How does it start?
There has to be an important unmet need
1. Standard vital signs are inadequate in identifying
patients in compensated shock.
2. Standard vital signs are not sufficient as guides
to resuscitation.
3. The solution has to be small, lightweight,
portable, noninvasive and easy for first
responders to use.
This problem was presented in a grant solicitation from the
US Army in 1995 and it’s still a huge unmet need.
The big idea
Why a company?
• Needed money to build hardware and develop
software.
• Medical products require clearance from the FDA
before they can be sold. A corporate framework
is needed to achieve this.
• Large monitoring companies rarely support
research into new vital signs, only investing after
the company has brought the product to market
and shown acceptance by the medical
community.
The first product: CareGuide Oximeter (2012)
Starting a company
1. Protect your technology with patents.
2. The right time to think about a company.
3. Begin to develop your business plan.
4. Getting help.
5. Decide how involved you want to be.
6. Sources of funding.
7. Landmines.
8. Last words.
1. Protect your technology with patents
• Novel technology should be protected by US and
in many cases international patents.
• When you receive federal research support you
have an obligation to disclose the invention to
your employer, who reports it to the funding
agency.
• Under the Bayh-Dole act, UMass owns, or is
assigned the rights to the invention.
• The UMass Office of Technology Management
oversees the patenting process.
Patents continued
• UMass can choose to proceed with a patent
application, or give the technology back to you.
• Under the Bayh-Dole Act, universities can profit
from inventions made under federal research
grants and most seek to license patents to private
entities.
• Patents are the currency of commercial
investment.
• A patent portfolio can be the basis of a start-up
company.
2. The right time to start thinking about a company
• For medical devices
– Working prototype
– Some clinical data
– Good idea about the market
3. Begin to develop your business plan
• Market
– Unmet clinical need
– Market size (> $1 billion for VC investment)
– How your technology will address target market
• Competition
– Who else is out there and why you are different and better.
• Technical
– How your invention works, written for someone with no technical
background.
• Intellectual property
– Issued and pending patents.
Business plan continued
• Regulatory
– The FDA regulations you have to meet to sell your product and
your strategy to achieve them.
• Business model
– How you are going to make money with your technology?
– What it is you are actually going to sell and for how much?
• Sales and marketing
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–
–
Who’s going to sell it?
To whom are you going to sell it?
How are you going to convince them to buy it?
Sales projections.
Business plan continued
• Reimbursement
– Who’s going to pay for the product when you sell it?
• Management team
– Key personnel with expertise in all areas of the business plan, or
plan on how & when you will get it.
• Use of funds
– Your expenses.
– Key milestones that add value to the company
• Exit strategy
– How is the investor going to make a profit on their investment?
4. Getting help to get started
• At UMass
– Office of Technology Management
– Massachusetts Technology Transfer Center
– M2D2: Massachusetts Medical Device Development
Center
• Local, national and international entrepreneur
groups
– In MA:, MassMEDIC IGNITE, MIT Enterprise Forum,
MedDevice Group
– SBIR/STTR education sessions
– TiE
find a good mentor to work with you
• Well connected.
– Can help you fill out your team with experienced
professionals (CEO, regulatory, marketing,
manufacturing) .
– Make introductions to potential investors.
• Has extensive experience with start-up
companies.
• Knows your market and technical space.
• Understands the issues working with universities.
• Someone you can call to ask stupid questions.
5. How involved to you want to be?
License your technology to a large
company and wave goodbye.
License your technology to a large or
small company with a consulting
contract or sponsored research
agreement.
Start your own company.
all approaches require you to articulate your product and the market
6. Sources of funding – getting started
• University programs
– Small grants, resources for prototypes, access to
clinicians
– business plan competitions
• State & local programs
– Matching funds
– Loans
– Incubators
• Federal programs
– CCAT, Navy funded program
Sources of funding – serious money – you
need a company
• SBIR/STTR grants – one of the few types of federal grants
that can be used for commercialization activities
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Every federal agency (percentage of their budget)
Phase I: $100K, usually 6 months
Phase II: $750K, usually 2 years
NIH has more flexible rules
• Angel investors & angel groups
– ~$100K to $1-$2 million
– Angel investors often provide mentoring
– Bridge to venture funding
• Venture capitalists (VC’s)
– Few to tens of million dollars
– Early stage VC’s mentor entrepreneurs
7. Landmines
• Conflict of interest.
– make sure you understand the policies
– Individual & institution conflicts
– Financial and human subject conflicts
• Bad advice is plentiful, trust your sources.
• Understand early, what is required to obtain your FDA
approval.
• Understand the financial transactions and how they
impact you.
• Raising money for commercialization takes a lot longer
than you think.
8. Last words
• Excitement is important, if you are excited about your
technology, so will prospective investors.
• Investors will “give you the science”. They have
confidence that you will get the technology to work.
• Investors want you to be successful, because that’s how
they make money. They will help you.
• A “business plan” is really 30 powerpoint slides.
• Consultants, lawyers and CEOs who work with
entrepreneurs may initially work without pay in exchange
for equity & an opportunity to work with an exciting start
up company.
Last words, really
It really is an adventure, take the plunge!
Contact Info:
Babs Soller, PhD
Reflectance Medical
Westboro, MA
[email protected]
508-366-4700 x223