Characteristics of a fundable company
The following are some guidelines we use in reviewing the viability of financing.
Innovations Commercialization uses these criterion to both assesses the capabilities of companies and when setting priorities for development work.
These guidelines may appear to set a very high standard, but have proven to be very effective in defining what one really has to do to get a company financed. They are not in any order of importance since investors have different levels of sensitivity to each of them.
- Quality of intellectual property
- At least 7 years of protection – filed at a minimum, granted is best
- International protection for products with international market
- Blocking IP understood, already licensed or at least a signed LOI
- Licensing agreement in place with all stakeholders
- Proven capability addressing a specific customer or market opportunity
- Meets market requirements
- Repeatable performance
- Practical to manufacture
- Can meet cost / volume requirements given appropriate manufacturing processes
- Commercial third-party confirmation of efficacy
- Independent testing of process
- Confirmation of market need, cost target, performance requirement
- Strategic development partner or strategic customer in place
- Real sales channel identified
- Manufacturing partners identified
- Medical development – Principal Investigator
- Lab resources
- Trial capabilities
- preliminary regulatory strategy
- Committed Business team
- Full time technology leads without other obligations
- Business management / project management
- Development partners / contractors in place
- Industry leaders with broad contacts
- Use of funds
- Prototype, manufacturing, marketing, sales
- No development of new science
- Quality of planning
- Execution plan is more important than business plan
- Financial data with direct market data, not based upon generic reports
- Excellent contingency planning – backup strategies for development, partnerships, market shifts
- Failure criterion