We were delighted to welcome back two NSIV graduates for November’s InnoVentures U program, “Life Beyond NSIV.” Joel Berniac of Akrivis Technologies and Scott Sneddon of Sharp Edge Labs are shining examples of entrepreneurs who have made a successful transition from the NSIV incubator to their new roles as company spokesmen. Special thanks to NSIV Chairman Harry McCoy for moderating this panel discussion.
When is it time to leave? Joel and Scott agreed that you know it’s time to leave when you’ve outgrown your space and/or terrific new opportunities present themselves. In Scott’s case, he received a foundation grant from Carnegie Mellon University, which gave him the opportunity to relocate his company to Pittsburgh and work in a university setting in expanded lab space. Joel, on the other hand, was outgrowing the lab space at NSIV and was invited by his distribution partner to move into their new space nearby in Salem, Mass. The added benefit of making this move was that he was able to custom design his lab to fit his company’s product development needs. Both Scott and Joel likened their decision to leaving NSIV to growing pains of a child leaving home for college. “It’s not an unhappy occasion; it’s just a natural process,” commented Joel.
The devil is in the moving. Joel’s move was a non-event, while Scott’s was a bit more complicated if only because he was moving out of state. In this regard, Scott recommends that before you make the move to your new lab that you divide your valuable materials into duplicate batches for separate shipping so all is not lost if something goes awry.
Reality Sets In. While the idea of setting up new lab space may at first seem thrilling, to Scott it was pretty shocking when he walked into a completely empty space. He reflected back on his days at NSIV when he would come into the office on a Friday and by Sunday he was getting data. The transition to his own space was not nearly as efficient.
First Critical Step to Opening Your Doors: Establish Good Credit. As any newly created company knows all too well, it’s very hard to set up equipment agreements (whether you’re leasing or buying) without a good credit history. Joel and Scott’s suggestion was simple: Apply for a corporate credit card immediately. Put all company-related purchases on the credit card. Pay your bills on time. Even with good credit, both entrepreneurs agreed that it’s difficult to work with traditional financial institutions for funding (such as banks).
Business Development Is Key to Growing Your Company. The time comes when you have to hang up your lab coat and get out there and shake the bushes. Making the transition from lab scientist to salesperson may not be easy, intuitive, or even comfortable for some entrepreneurs (especially if you’re used to working behind the scenes), but both concurred that a company’s founder is primarily responsible for growing the company. In the end, it’s all about selling yourself and your company. Scott added: “The key to being a good salesperson is realizing that selling is an exercise in empathy.” You need to get into the head of your customer and draw out their anxieties and problems. Then you need to be able to offer them solutions.
Raising Capital. This is where the waters get murky and the caveats are many. Their advice: “The best time to raise money is when you don’t need it.” That said, an entrepreneur’s ability to raise capital is, first and foremost, based on the quality of his or her reputation as the company founder, followed by the reputation of the company’s team. There are many revenue streams to pursue –angel groups, VCs—but in the end it’s all about cultivating relationships over time with a variety of shareholders. Of course, raising capital is a moot point if a would-be investor suspects that you’re not willing to take a financial risk in your company. A seemingly innocent question like “how much do you pay yourself?” may reveal the personal sacrifices that you’re willing or not willing to take to grow your company. The bottom line: If you’re not willing to invest in your company, how can you expect investors to invest in you?
The key to hiring…test drive before you make an offer. Hiring is a costly commitment, so hire with caution, and hire slowly. A recommendation that was floated was to hire an intern and if after six months, the person works out, consider making him or her an offer. Joel has hired five full-time employees in the two years since he left NSIV; Scott has four employees since he left the incubator in 2012.
“It takes a village to raise a startup.” Joel and Scott extolled the value of being in the NSIV incubator. In particular, they pointed to NSIV’s executive team, Martha Farmer and Tom Kinneman, for their ability to create a collegial, supportive, collaborative environment where like-minded entrepreneurs could be there for one another, sharing ideas and helping one another solve problems. Scott’s comment hit home: “One of the problems of being out on your own is that you lose your built-in network. Being on your own is stressful, especially when you realize that you have to create a new network.” Scott also reflected on the valuable support that he personally received from Martha and Tom when he decided to move his company out of state. “I had to do a lot of planning, which included the logistics of moving. Marty and Tom helped me to do an analysis on many parts of my business, from hiring employees to deciding what core equipment I was going to need.” Joel commented on the benefit of NSIV’s CEO Roundtable Forum, which is an NSIV service that brings startup CEOs together in a confidential setting to discuss challenges and issues they face as entrepreneurs. He has stayed in the program even after leaving NSIV for the “therapeutic” support system.
Then as if on cue, Scott and Joel looked at each other and turned to the NSIV community. “We’re here for you. Let us know how we can help you.”
Joel Berniac-Co-founder & CEO of Akrivis Technologies, a biopharmaceutical startup located in Salem, MA. Akrivis is engaged in the early diagnosis and treatment of serious and life-threatening diseases from the applications of its patented Z-TECT™ technology platform. Prior to founding the company, Joel was Associate Director of Business Development at Paratek Pharmaceuticals (Boston), where he oversaw the preclinical research portfolio and out-licensing activities for rheumatoid arthritis. He began his career as a medicinal chemist at Bayer Pharmaceuticals. Joel holds an MBA from Northeastern University and a Ph.D. in organic chemistry from the University of Notre Dame. He graduated from the French Engineering School ESCIL (now CPE Lyon) in France.
Scott Sneddon-CEO & President of Sharp Edge Labs, Inc., which is headquartered in Pittsburgh. The company develops next-generation biosensors for cellular biology research and high-throughput screening based on Fluorogenic Activating Proteins (FAP). Scott has more than 18 years’ experience in the drug discovery industry, having held leadership positions at Pfizer and Genzyme. He has worked as an attorney handling venture financing, licensing and ongoing strategic operation for over a dozen startup and growth-phase companies in the biotechnology sector. He is also a registered patent attorney. Scott holds a Ph.D. in chemistry & biophysics from Carnegie-Mellon University and a J.D. from Columbia University Law School.
Harry McCoy-Chairman of North Shore InnoVentures and President & CEO of Thorne Diagnostics, a molecular diagnostics company in Beverly, MA. Harry is a former academic who has founded and run private and public Life Sciences (drugs and diagnostics) companies for 30 years. He is also currently Chairman of Alterix (a drug delivery company) and Attogen (a drug discovery company). Harry was Founder of MEDTOX Scientific, which was acquired by LabCorp for $241 million in 2012. He was also Director of Apptec, a venture-backed biopharmaceutical manufacturing firm that was purchased by WuXi PharmaTech. He holds a B.A. in biology from the University of California, San Diego; a Pharm.D. from the University of California, San Francisco; and a post-doctoral fellowship from the University of Minnesota.