You may be a Professor at a University or Research Institution and ask the question “How can I start a biotech company if I don’t really want to run it?”

Don’t worry! You don’t have to be CEO in order to start your own biotech company.  In fact, it may not be the best advice to become CEO if you have no previous business experience.  An academic scientist CEO without prior business experience can sometimes be an impediment to raising money because investors bet on experienced people – not just in technologies alone.  Although there are examples of scientists leading successful biotech companies, unfortunately, stereotyping of scientists does occur. As a general rule, the more practical business experience you possess, the more confidence investors will have in your ability to successfully lead a company.

As a professor, you can assist in starting and forming your new company, help develop the technology and participate in its value creation without having to leave your academic position.  But even if you are interested in leaving your academic position, you still don’t have to run the entire organization unless that is your desire.  There are several ways to participate in the entrepreneurial process without shouldering the responsibility for the entire organization.  However, just because you are not leading the organization, it does not mean you cannot participate in shaping its future. There are several alternative roles you can assume that still provide valuable experience for participating in the entrepreneurial process and better equipping you for a subsequent entrepreneurial opportunity.

Alternatives to Taking the Leadership Role

It is important to first decide your time commitment to the new entity.  Are you interested in full-time participation or only part-time?  Do you only want to participate in this new venture as a consultant on an “as needed basis”?  Would you like to start on an “as needed basis” yet have the opportunity to later participate full-time?  If you first identify your time commitment interest, it will help in selecting your entrepreneurial options.  If you are contemplating starting a biotechnology but are not interested in leading the organization, here are some ways you can participate: 

1. Take a position as Chief Scientific Officer or Vice President of R&D.  Participate by leading the technology development but have someone else shoulder the business and financing responsibilities of the organization.

2. Participate as a Scientific Advisory Board Member and assist in the overall direction and in solving problems during the technology development

3. Participate as Scientific Consultant and assist on an “as needed basis”

In the beginning, you will be heavily involved in establishing the company, and you must be willing to commit a large portion of your time during this phase.  Afterward, you can then return to academic research or medical practice, while contributing an alternate role as described above.  As a founder of the company you will most likely be involved in securing seed funding for your new venture, which may come in the form of grants and/or seed capital funding from angel investors.  During this time you must identify and recruit an experienced CEO or a former entrepreneur who can give you guidance on how to move the technology forward. Initially, you must be the sole driving force behind the company, understanding that your work will have benefit later when you reap the rewards of your efforts.  By participating in these  alternate roles it will better prepare you for subsequent start-up options where you may want to assume the leadership role. 

The Takeaway Tidbit

Professors with minimal business experience may want to consider supportive roles in their new venture rather than taking responsibility for the entire organization.  In this way, you can learn by participating as a member of the team, rather than being solely responsible for the outcome of the company.  By doing this, you will gain valuable experience and can be applied to your next opportunity.  You can then lead with more confidence because you will then understand the start-up process and the issues you may face.  It is essential to work with other experienced people because a good team is vital to business success.  For those who are interested, more information about these alternative roles can be found in the chapter titled “What Makes a Biotech Entrepreneur”, in the book “The Business of Bioscience: What Goes Into Making a Biotechnology Product”.

What is the first thing a biotech entrepreneur should do when thinking about formally starting their company???

One of the first things is to talk with an experienced attorney who has worked with start-up biotechnology companies.  Too many entrepreneurs say they can’t afford an attorney, but in reality you cannot afford NOT have one for your business.

This article in the October 2010 issue of Nature Biotechnology “Why You Need a Lawyer?” discusses things an attorney will give you advice on, such as: issuing stock, constructing employee agreements, selection of a board of directors and advisors, and other things you will want to know.

The lifeblood of a young biotech company is cash.

Without capital, the greatest of ideas get nowhere.  The biotech entrepreneur must successfully identify and access consistent sources of capital over the life of their organization in order to transform their ideas in to products.  During early development stages the entrepreneur should make use of Angel capital and Small Business Innovative Research (SBIR) and other federal (NIH) and state grants.  But at some point this budding company will need to secure venture capital or what is known as Institutional Funds.  How does one go about doing this?

Kleiner, Perkins, Caufield &  Byers (KPCB) is one of the stalwart biotech venture capital groups and one of the early backers of Genentech in 1977.  Since then, the firm and its Partners have backed entrepreneurs in over 100 life science companies working in every area of medicine, including cardiology, cancer, neurology, immune system diseases, ophthalmology, and molecular diagnostics.

Stanford University’s Entrepreneurship Corner interviewed Brook Byers, an early partner in the firm discusses the best way an entrepreneur should find and reach venture capitalists.

In this second video clip he shares his thoughts on selecting and working with venture capital firms. (more…)

Sometimes people make simple things complex.  However, most of the time we make complex things impossible.  George Whitesides has a knack for making complex things seem easy.  He is a professor of chemistry at Harvard and a serial entrepreneur. Whitesides co-founded 12 companies which at one point had a combined market capitalization of over $20 billion. These companies included Genzyme, GelTex, Theravance, Surface Logix, Nano-Terra, and WMR Biomedical.

In a post, William Crawford references Whitesides talk on “Challenges to Successful Innovation and Translation” of medical research where he outlined “Whitesides Rules for Biotech Entrepreneurs” or “Uncle George’s Homey Rules for Entrepreneurs”.  These 14 simple rules are, well… simple, but like viewing life in a rear-view mirror, some of these may be seem obvious as you read them but they were most likely borne through adversity.

For instance, rule #10 “Regulatory Agencies are Motivated to Avoid Risk.  Nobody ever lost their job for not approving a product”  For the biotech entrepreneur, the lesson is, when developing and testing your product, be sure to plan on examining every reasonable risk imaginable…and then find a few more”.  The FDA is a risk-averse agency by nature.  Help them do their job by appropriately removing the guesswork from as many product risks as reasonably possible.

WHAT IS IT… that propels some entrepreneurs to succeed and other to fail?

Defining Success and Failure

In order to talk about the traits of successful entrepreneurs, we must first start with a better understanding of “success” and “failure”. Success is often erroneously defined as—everything you do produces a favorable outcome.  If “success” is equated with never having an idea that did not work, never having a business shut-down, or never encountering insurmountable product development problems, then there are very few successful entrepreneurs in this world, and it is near certain that you too will not be “successful”.

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