Industry contacts can be an invaluable part of the TTP’s research on a new technology. They can validate (or, perhaps more importantly, contradict the inventor’s assumptions of) the value of the technology. They can provide performance targets that must be met before they take an interest in the technology. If the inventor can generate data that shows the target has been met (possibly using translational research funding that you help provide) you have a customer lined up.
See this presentation which covers the following:
- How to identify and approach appropriate companies
- Whom to contact—R&D / Marketing / Management / Business Development / Open Innovation
- Identifying a contact by name (using resources, e.g., LinkedIn)
- How to open doors; what to ask for.
Working early on with industry partners led to great success for the company SmartCells, a Boston-area start-up founded by Dr. Todd Zion in 2003 based on his Ph.D. thesis at MIT. The technology provided a way to make insulin responsive to a patient’s blood-glucose level, and the start-up company won MIT’s $50K entrepreneurship competition in 2003. Zion disclosed the technology to MIT and got an exclusive license for SmartCells.
Zion set a monetary target for what he wished to sell the company for, estimating that he would reach that target if he raised $10 million and sold the company for $100 million. He then asked diabetes companies what data they would need to see to buy SmartCells for $100 million, and determined how much money it would take to develop that data. He then went through a series of iterations of the data that was needed and the cost to generate that data to where he could generate the data for $10 million.
He finished up raising $9.8 million, but was able to raise even more—an additional $10.7 million—in grants from the Small Business Innovation Research (SBIR) program, the Department of Defense and the Juvenile Diabetes Research Foundation. In the start-up world, grants are referred to as “non-dilutive financing,” because the grantor doesn’t receive any shares in the company in return for their funding.
Zion was able to sell the company to Merck in 2010 for a reported $80 million upfront and a further $420 million in milestone payments, much more than his original target.
Here’s a detailed account of the SmartCells story.