You’ve got a great molecule or a great technology. It has the potential to change lives. You’ve also have some remarkably smart people on your team. If only that were enough to ensure your company’s success.
What you’re likely missing is the knowledge and experience required for the in depth path to get a product to market — or perhaps interest someone else to invest in your discovery or product. Ultimately, that knowledge and experience is the component that can make the difference in your company achieving success or not.
You Need Business Expertise
You and your team are experts in your field, but how many products have you launched? How many companies have you built or sold? If that expertise is not readily available to you on your team, then you will need to access it from the right partner for you and your team.
You need someone who can assess your viability in the marketplace — and help you shore it up. You need someone who can tell you what investors will like and not like about your product(s) — and help your company become more attractive. And, should your great scientific advancement prove to not be commercially viable, you need someone who might help you leverage your discovery in some way that is. Or save you time to find the next great idea and/or scientific asset.
You need Regulatory and Health Authority (i.e. FDA, EMA) expertise.
The FDA can be an enigma. Even when you’re sure you’re doing everything right from a scientific perspective, you still have to deal with the government and regulatory expectations. Guidances and FDA’s thinking changes over time. So having their latest expectations at your fingertips is vital. You absolutely need to work with people who are expert in FDA’s ways.
TBG consultant Jim Gilligan recalls an experience he had years ago when the FDA was inspecting his company’s manufacturing facility:
“We had some things to address following our first inspection and were very careful to do exactly what the FDA wanted. Later, they came back for a pre-approval inspection and they started citing other things. I said, ‘When you were here the last time, everything was fine.’ The FDA rep replied, ‘It was fine for an IND stage, but now you're in NDA stage.’ That’s different.”
You Need People Who Understand VCs
Are you interested in pursuing VC funding? Get ready to have your business analyzed under a microscope. Much of the criticism will be warranted from their vantage point — VCs are generally risk averse and don’t invest where there is unwarranted risks. Some of the nit picking might be aimed at reducing your valuation. In either case, you need to be buttoned up and prepared to defend your company and its assets.
Due diligence partners will prepare you to withstand VC scrutiny. They will point out the potential weaknesses you need to address before the VCs point them out — and help you address them. By being well prepared, you will come across as more credible and help your company look more valuable. Imagine, for example, if the VC says, “Your costs for API are too high,” and you are able to reply with something like this:
“Historically that has been the case, but going forward we won’t be sole sourced. We’ve identified two groups that have given us very competitive pricing and will make our cost of goods acceptable.”
That’s the kind of answer that due diligence can help you develop.
To protect your hard work and your innovation, invest in due diligence with seasoned pros who have a track record of success in business and with regulatory agencies. You’ll come out ahead in the end.