Facebook Twitter Vimeo LinkedIn

Funding tips for startup ventures

Entre­pre­neurs and startup hope­fuls looking to make an impact in the health sci­ences industry received funding tips from ven­ture cap­i­tal­ists and angel investors in a panel dis­cus­sion last week at North­eastern University.

The event, held Wednesday in West Vil­lage F, was hosted by the university’s Health Sci­ences Entre­pre­neurs pro­gram, an alumni group ded­i­cated to fos­tering entre­pre­neur­ship in the rapidly evolving world of health care. The pro­gram was founded in 2005 by Joseph Fleming, PAH’70, MS’71, and a small group of entre­pre­neurs who wanted to teach stu­dents about entre­pre­neur­ship. It launched its mentor pro­gram in 2010; since then, about 30 com­pa­nies have offered their exper­tise and guid­ance to North­eastern stu­dents, fac­ulty, and alumni.

neu195702_lowres-590x408

Peter Barrett, PhD’79, partner at Atlas Ventures, speaks to attendees at the Health Sciences Entrepreneurs program’s “Funding for Startup Ventures: Identifying Viable Investors” inside the Visitor Center last Wednesday night. The annual event offers students, faculty, and alumni the opportunity to hear from experts and gain the knowledge to help build successful, viable companies. Photo by Mariah Tauger

“We’ve attempted tonight to run the gambit on dif­ferent kinds of financing,” Fleming noted in his intro­duc­tory remarks. He added that he’s proud of the role the Health Sci­ences Entre­pre­neurs pro­gram plays in Northeastern’s entre­pre­neurial ecosystem. “There is a lot going on here,” he said.

In her opening remarks, Bouvé Col­lege of Health Sci­ences Dean Terry Fulmer noted that the event would fea­ture a range of cre­ative thinking and pow­erful advice on how star­tups can iden­tify and con­nect with viable investors.

The pan­elists, for their part, deliv­ered on that promise. They com­prised Tracey Doden­hoff, founding director of Northeastern’s Center for Research Inno­va­tion; Jane Mason, vice pres­i­dent of the Cam­bridge Trust Company’s inno­va­tion banking group; Ben Lit­tauer, an active angel investor; and Peter Bar­rett, PhD’79, a partner at the early-​​stage ven­ture cap­ital firm Atlas Ventures.

The pan­elists’ pre­sen­ta­tions high­lighted the kinds of invest­ment oppor­tu­ni­ties entre­pre­neurs in dif­ferent stages of the devel­op­ment process should seek; the dif­fer­ence between funding from angel investors and ven­ture cap­i­tal­ists; and the sup­port the Center for Research Inno­va­tion can offer North­eastern ventures.

A common theme echoed throughout the evening was that bud­ding entre­pre­neurs to do their home­work on the market they’re entering and make sure their product or ser­vice meets a need. “Thinking cre­atively about the market is really impor­tant,” Doden­hoff said. “When you look under the radar screen, you may find things that may keep you from going to the market in the direc­tion you are talking about. But you also may find some allies.”

In her pre­sen­ta­tion, Doden­hoff offered a variety of tips for searching for financing and devel­op­ment. She said it’s impor­tant that ven­tures think hard about their busi­ness model and that CRI has a range of ser­vices to help them con­nect with investors, large cor­po­ra­tions, and poten­tial busi­ness partners.

North­eastern offers a range of pro­grams and resources that together serve as ecosystem that fos­ters the entre­pre­neurial spirit of its stu­dents, fac­ulty, and alumni and offers assis­tance through a number of dif­ferent orga­ni­za­tions, including the Center for Research Inno­va­tion, the Center for Entre­pre­neur­ship Edu­ca­tion, and IDEA, the student-​​led ven­ture accelerator.

During the Q-​​and-​​A fol­lowing the pre­sen­ta­tions, Lit­tauer and Bar­rett were asked what their opin­ions are on “the lean startup” method pro­posed by entre­pre­neur and New York Times best­selling author Eric Ries in 2011. Ries believes if star­tups focus on iter­a­tive product releases to meet the needs of early cus­tomers, then they can reduce market risk and the need for out­side capital.

Even though they rep­re­sent dif­ferent investing oppor­tu­ni­ties, Lit­tauer and Bar­rett agreed it can only ben­efit entre­pre­neurs down the road if they get their busi­ness devel­op­ment moving with lim­ited out­side help. “Lean startup method­ology is crit­ical to your suc­cess in today’s world,” Lit­tauer said.

“It keeps your cap­ital needs way down.” “If it’s just about money, go for the cheapest source of cap­ital you need to prove your hypoth­esis,” Bar­rett added. “Because then you may be able to raise money at a higher price later and not give away a cer­tain per­centage of your company.”

To find out about the Health Sci­ences Entre­pre­neurs pro­gram, or to apply as a ven­ture or mentor, please visit www​.neu​.edu/​hse or email j.​norton@​neu.​edu.

- See more at: http://www.northeastern.edu/news/2014/03/health-sciences-entrepreneurs/#sthash.FotZwNEF.dpuf