Subscribe

Forum

Starting a new company - what am I going to do wrong?

Welcome to the newly redesigned Science Careers Forum. Please bookmark this site now for future reference. If you've previously posted to the forum, your current username and password will remain the same in the new system. If you've never posted or are new to the forum, you will need to create a new account.

The new forum is designed with some features to improve the user experience. Upgrades include:
- easy-to-read, threaded discussions
- ability to follow discussions and receive notifications of updates
- private messaging to other SC Forum members
- fully searchable database of posts
- ability to quote in your response
- basic HTML formatting available

Moderator: Dave Jensen
Advisors:   Ana, PG, Rich Lemert, Dick Woodward, Dave Walker
Meet the Moderator/Advisors

Starting a new company - what am I going to do wrong?

Postby Ken » Mon Nov 12, 2018 9:07 pm

God help me, I'm spinning out a clinical stage drug company based around IP that I've accumulated over the past decade. We have a great story, a solid data package (including early clinical data), a good plan, and supply to initiate a clinical trial tomorrow. This is absolutely not a position I ever imagined myself in.

I'm a science guy. I've been involved in some small BD work over the years, but honestly while I know the science backwards and forwards, everything else seems insurmountable. I have a good group of people who fill in all the many things that I don't know, but I don't even know enough to know what I don't know!

I'm in the calm before the storm right now, but preparing to start heading out to raise money. My question is both simple and complicated: what mistakes am I going to make if I don't prepare for them now?
Ken
 
Posts: 509
Joined: Tue Jan 10, 2012 11:28 pm

Re: Starting a new company - what am I going to do wrong?

Postby PG » Tue Nov 13, 2018 5:45 am

Congratulations you have an exiting time ahead of you.

Finding the correct first Investor will be key. Make sure that you find someone who wants to be active on the board of directors, who has competence in the field and have experience from companies with products in the stage of development that you have. The competence and engagement of your early Investors are critical to your Companys success and in fact to your own wellbeing.

The biggest mistake I think that you can do is to accept money from the first person who waves a check in front of you if they dont also bring other things that you need. If you find the right Investor they can help with so many things both regards to finding additional funding, helping to bring in the right people, having the right contacts etc.

Once you have a substantial investor in your company they do in fact control the fate of the company. Finding another Investor without consent from the ones you have is likely to be impossible. This also means that if an Investor wants to play dirty and dilute your ownership they can easily to that. I am not saying that this will happen just that your first Investor is critical.
PG
 
Posts: 1031
Joined: Tue Jan 10, 2012 11:28 pm

Re: Starting a new company - what am I going to do wrong?

Postby Dick Woodward » Tue Nov 13, 2018 9:04 am

PG's advice about investors is good. One thing that you may wish to consider is finding an experienced CEO - one who has raised money, understands the care and feeding of investors, etc. Just because you founded the company does not mean that you have to run it. You seem to understand that your strength lies in the science side of things; accept that and look for a businessperson to complement your skills.

Dick
User avatar
Dick Woodward
 
Posts: 443
Joined: Tue Jan 10, 2012 11:29 pm

Re: Starting a new company - what am I going to do wrong?

Postby Ken » Tue Nov 13, 2018 9:50 am

I've already sidestepped one of the above problems! I preemptively turned down the CEO role as not something that I'm suited toward. If the experience changes over the next few months or years, it's maybe something I would consider growing into. But, my goal is the company's success, and that is more likely with someone else in that role. And, frankly, that's never been a personal goal of mine.

I think the investor advice is where I'm in danger; without experience, I'm going to be tempted to take the first investment offered to me. It's hard to know how unusual getting a willing investor is when you haven't been through this before. So, thanks for giving me that to think about if and when that happens.
Ken
 
Posts: 509
Joined: Tue Jan 10, 2012 11:28 pm

Re: Starting a new company - what am I going to do wrong?

Postby PG » Tue Nov 13, 2018 10:45 am

I have been the first employee except for the founders in two different startups and have done a lot of Investor meetings.

The second stumbling block that I have seen is how much money you need to get. If you ask for an amount that is very high it may come out unfavorable in the cost-profit-risk calculation that the potential Investors will do.

On the other hand if the amount that you try to get is insufficient to fund the activities that are necessary to reach your goals for the funding the best case is that you have to go through this process again very soon and in the worst case you will be denied funding.

I actually had the later scenario happen in one of the companies I worked for. We were talking with a major global Investor who told us that if we would have asked for 100 million USD they would have been interested but when we only asked for 20 they said no. They didnt see that the Money we asked for would be sufficient to support the Company to the key milestone that we needed to hit to be able to be at a better Point for the next round of fundraising. The Investors that we already had were not willing to match their part of 100 million and the company ended up not getting any funding.
PG
 
Posts: 1031
Joined: Tue Jan 10, 2012 11:28 pm

Re: Starting a new company - what am I going to do wrong?

Postby Dave Jensen » Tue Nov 13, 2018 1:04 pm

Ken,

What an exciting time for you! Yes, you are in the "calm" and it doesn't last all that long, believe me.

I think the advice you've been given here is great -- another example of why the forum has meaning and value for the future.

The best advice that I can give you is to ensure that you keep your eye on each and every hire the firm makes, and that you'll be involved in sharing your mission, your vision and ideas for the future with each new employee as they come onboard. Don't let small groups of people form (as the "core group" often does in new ventures. Bring everyone into the fold, keep them enthused and ensure that you tell every new hire that there will be ups and downs, and there will always be times that they'll wonder what's going to happen next. Ensure they know they are going to be on a roller coaster of a ride, but that things will always work out best if they hang in there and stick to the original values you've set up.

Good luck!

Dave Jensen
“There is no such thing as work-life balance. Everything worth fighting for unbalances your life.”- Alain de Botton
User avatar
Dave Jensen
Site Moderator
 
Posts: 7957
Joined: Tue Jan 10, 2012 11:28 pm

Re: Starting a new company - what am I going to do wrong?

Postby Ken » Wed Nov 14, 2018 4:22 pm

On that note, I've been leading this crazy project for over ten years, and in the ebbs and flows from the tiny research project to the international clinical project and everything in between. The one thing that I can say is that when the project consisted of a small group of necessary people who were all working on it because they wanted to, the project succeeded. The times when it grew too large, too fast and the people working on it were simply assigned to work on it, it did not.

I'm back to the latter again, and I couldn't be happier about it! (Happier and also terrified, I suppose.)
Ken
 
Posts: 509
Joined: Tue Jan 10, 2012 11:28 pm


Return to Science Careers Forum

Who is online

Users browsing this forum: No registered users and 20 guests