I am in the process of starting a biotech. I have determined that a year is enough time to gather results promising enough to merit much greater investment- or failing, serious reconsideration or abandonment. Nonetheless, I am pretty confident in my proposed technology, and am currently drafting and filing a provisional before looking for initial investment.
The 1 year plan would include salary for myself and one other scientist. Combined lets say 130k/year. My equipment needs are rather modest, I've specced out some used lab equipment, and conservatively I could get away with 15-20k. Consumables are harder to estimate so I'll say 10-30k. I'll also need lab space, but I haven't started looking yet, so this is the biggest unknown to me at the moment. Anyone have any rough ideas on how much this might run (think coastal city)? Combining equipment sharing privileges in a sub-lease might also be a possibility, if anyone has experience with that?
Overall, if leasing a lab-space costs 60k a year (like I said, I have no idea) I'm already in the 200k+ range for the first year. Initially I was thinking of applying for an SBIR, but the upper award range is listed as 150k for phase I (phase II would be up to 1M). Does anyone have experience with SBIRs, or more importantly, experience in asking for more than the stated amounts in phase I?
Are there other, similar, funding sources that don't lay claims against a corp's equity? Eventually, if all goes well, I plan on looking for angel or VC investment, but preferentially only after getting SBIR (or SBIR like) funding, and after getting some initial results. Both would place me in a stronger bargaining position. There is also a humanitarian angle to the technology, so going to someplace like the Gate's foundation isn't crazy, but I've heard that includes a lot of potential red-tape hassle. Is this true?
Of course, any other suggestions unrelated to appropriate funding sources or strategies are greatly appreciated.
There are numerous sources of funding for biotech startups. SBIR/STTR grants are a great way, but keep in mind that from the time you apply to the time you have the cash is at least 6 months (assuming you get funded the first time, which may not be the case). Depending on what state you live in, I would look for their resources first. You could find an academic collaborator and file a grant with them (use their track record and name to your advantage, but be sure to file your provisional first and get an IP agreement in place). Many states have small business-related organizations (such as the SBDC) that will provide free or almost free assistance to entrepreneurs. Some states, like PA, will match your Phase I SBIR or other investment. Foundations are a great way to get money. So are government contracts. You may have to tweak your pitch a bit to fit what they want. Investors will not fund "an idea". You need to show proof of concept. Also, investors like to see "sweat equity" - I would not count on having a salary for a good while. And run lean- if you can do the benchwork yourself, don't hire a scientist. Start networking in the biotech circles in your area and you will find labs with space (and equipment!) that you can rent/share. My company - The Isis Group - has helped several biotech entrepreneurs get started, including help with writing SBIR and other grants. Let me know if you would like to discuss further. Good luck!!
I am currently getting my mba from mit and the biotech scene here is quite rich in startups and diversity. Let me just break it down to you simply. The way you are approaching could be improved. Your runway is TOO small. If you dump your savings for one year of R&D and imagine you will find something, then I wish you all the best.
The typical biotech starts with $1-2mil in seed. People who try to bootstrap it usually start with simple biomedical devices that would cost 200k for a proof of concept and do simple solutions -- like use UV to disinfect a tube (wow!) -- then they move on to bigger fish like a project that would require an estimated 1-2 year of R&D.
My first job out of college was at a VC funded biotech startup, and nothing was simple or went according to plan. Knock-on-wood, they are still around and just finished a series-C.
To answer your question, given the movement in the market, R&D costs, equipment, etc --- I STRONGLY suggest you find a co-founder and an angel (and not any angel, find an angel that KNOWS the biotech, healthtech, med. devices, or something related industry). If you're successful with your first biotech start up, im sure by the time your second one comes around youll be able to bootstrap it yourself.
I hope this helps, if youd like to dialogue more, shoot me a message.