Simon Chandler, Director of New Business and Partnerships at IP Group, began work in academic research but has spent most of his career in business, with both spin-outs and large biotech companies. He now acts as the interface between IP Group and its partner universities, working up new opportunities for investment, with a focus on life sciences.
There’s a kind of momentum that can build when academics start thinking about commercialising their research and it’s very easy to get caught up in that. So my first piece of advice to any academic in that position would be: just stop for a second. Rather than rushing forwards, you need at this early stage to be ensuring the groundwork is in place to create a really strong and compelling proposition.
Get in touch with your technology transfer office, or organisations like Translate, if you haven’t already. Be modest, admit where your experience falls short, and get all the advice and information you can before embarking on the commercialisation path.
There are a few key things you’ll need to be able to demonstrate – and these are part of the criteria we use at IP Group to assess whether an opportunity is worth pursuing: the need for your technology and the size of this potential market, that the technology is robust and how it matches up to the competition.
This will require a hard-hearted look at your research to assess it objectively, which isn’t going to be easy. No doubt this research is something you’ve been working on for years, it’s your personal project and it’s no surprise if you think it’s a compelling commercial opportunity.
But an investor won’t have that personal attachment and that’s who you have to convince, if you’re going to get the funding you need to take the technology forward.
Firstly, be realistic about the market analysis. Too often we see estimates in the billions, when in fact the technology is only really relevant to a small portion of that market. If you don’t have the skills to make this kind of assessment yourself, then get help. If your university is partnered with IP Group, then we can do some of this assessment to fully appraise the market potential. This is where your technology transfer office and organisations like Translate can help. We often work in partnership with them to support academic teams through the early stages of assessing the value proposition of their technology.
Secondly, have you got the evidence you need to prove this is an opportunity worth pursuing? Can you show how it will translate from an academic to an industrial environment? Have you done enough experiments with large enough numbers to show it is robust? If not, then this needs to be your next step – and many universities have proof of concept funding available to create this evidence base.
Thirdly, don’t be frightened of the competition – but be sure you benchmark your technology against it. It’s highly unlikely that you’re the only person trying to answer a particular clinical need – there will be other academics or commercial companies working in the same space. That’s not a problem – but you need to show how your solution is significantly better. It might not be the best for ever, as things move on. But to persuade an investor to get involved, you need to convince them that the advantage is sustainable and instil confidence that it won’t be overtaken within just a few years. Incremental improvements are unlikely to provide the head space to make a return. At IP Group we look for big ideas and accept a long timeframe of 10-15 years to mature, but most venture capitalists will be looking at 7-10 years.
These three areas create the bedrock that your commercial proposition will be built upon. But there are other things we look for at IP Group, to help identify which propositions have the best chance of success.
IP – intellectual property – is one of these. We don’t expect that your IP will be already protected before we get involved, but we need a clear line of sight that shows it can be in the future.
The team – and most importantly you, as the principal investigator (PI). We don’t expect academics to take a full role in any spin-out – we appreciate that what you want to do is get back to your research as soon as possible. But we don’t want a PI that just expects to hand over the research and disappear. To ensure success, the PI has to be really engaged with the process and willing to pitch in and help with problems, such as getting extra evidence or developing an industrial prototype. This may sound a minor issue, but it can really influence whether we choose to take something forward or not.
The plan – or more accurately, a credible execution plan. Essentially, this means a clear idea of what you need to do and how much money you need to do it – and again, this is something we work on with our partner universities. The route to commercialisation is iterative, and the plan needs to show how each chunk of money will take you to a clear value inflection point – the milestone that moves the technology on towards commercialisation and so will encourage more investment. This might be proof of concept results, a clinical trial or securing key customers, for example. What you don’t want is to run out of money when you’re in no-man’s-land between these milestones, as then it’s really tricky to get further funding to move forward.
And finally – the vision. This is something you should invest time in – developing the narrative that will capture the imagination of potential investors. This needs to be tight, compelling and short – a 30 second pitch or half a page of copy – that will encourage investors to read further.
While this has to be grounded in the facts, as I’ve laid out above, it needs to provide a glimpse of the future, go beyond the mere technicalities to show what your technology could do, the benefits it could confer, how it will create change. If your proposition looks dull, small and niche, then investors will dismiss it. If it looks exciting and far reaching, then they’ll take another look. You may not like it, but this is marketing and you are the salesperson. You’ll have to sell your proposition at every stage for bigger amounts of money, so this is something it’s worth getting right at the start.
So – once you’ve had that stop to put the groundwork in place – think broad, think big, draw on the science and sell your vision.