By Scott Meacham
It is hard to start a business — very, very hard. This is true on Main Street, for information technology businesses and in biotech. For all entrepreneurs, building a company is a race against time, a race in which every milestone of success increases the pressure on the business plan.
The biggest challenge is capital—where to get it and how to stretch it until the enterprise is cashflow positive. The better a new company performs, the sooner it will need investment to hire great talent, to increase production, and to accelerate business development. Ask virtually any entrepreneur at virtually any point in time what he or she needs most, the answer will be capital.
Capital buys time, talent, and raw materials. With the TBFP pre-seed funding, we are often the first investor in. Lack of capital can ensure failure; however, capital alone does not ensure success.
That’s why the Oklahoma Innovation Model, built on 20 years of in-the-trenches experience puts such an emphasis on venture advisory services.
Selexys Pharmaceuticals began more than a dozen years ago. i2E, along with The Oklahoma Center for the Advancement of Science and Technology (OCAST) and OU’s Presbyterian Health Foundation, put together the first institutional money and helped attract the right management team to find a successful path to market. That winning path for Selexys ended up being a life transforming therapy to treat sickle cell disorder which led to a $655 million acquisition by Novartis.
With Linear Health Sciences, a medical device company founded by Oklahoma physician and entrepreneur Dr. Ryan Dennis, we led three investment rounds beginning with seed funding, which moved the company through concept, final FDA approvals, and beyond. Linear Health Sciences Orchid Safety Release Valve™, with new break-away technology for IV lines and catheter tubes, is about to change the lives of hospital patients across the globe.
The winning path often means pivoting from the original business model. WeGoLook™ came to i2E with a business-to-consumer model that dispatched crowd-sourced “lookers” to verify a product, person, place, or thing. We liked the concept and the team but felt that the solution had more potential in the business-to-business space. i2E was the company’s first investor with a pre-seed TBFP fund investment. We then led a $1.75 million Series A and an eventual $40 million exit.
Docvia began as a platform-based emergency identification and notification subscription service. We invested pre-launch in Docvia and then syndicated with SeedStep Angels and other Oklahoma investors in multiple follow-on rounds. When the original business plan did not progress as expected, we helped Docvia execute a creative exit where the company sold its technology to a specialized helmet manufacturer with royalty terms.
Startups often do not end up where they began. They pivot, they add and subtract from their management teams; they modify their exit strategies. From research to exit, we roll up our sleeves and work shoulder-to-shoulder with entrepreneurs and young companies to find the right path to profitability. It can be a long game but we are in for the long haul.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at i2E_Comments@i2E.org