1. TEN THINGS TO KNOW BEFORE STARTING DOWN THE
ROAD OF BIO-ENTREPRENEURSHIP
STEVEN B LEVINE, MD
SOCIETY OF PHYSICIAN ENTREPRENEURS

3. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Definitions
 “Entrepreneurship” is the process of developing, organizing, and running a new business to
generate profit while taking on financial risk.
 “Bio-entrepreneurship” is specific to healthcare (or sickcare is probably the more accurate
term).
 Three broad categories: Pharma, Medical Device & Digital Health
 Bio-entrepreneurship is unique from entrepreneurship because
 It costs a lot to develop, protect, and commercialize a product
 It takes a long time to develop, protect, and commercialize a product

4. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Entrepreneur's Handbook by DC Palter (https://entrepreneurshandbook.co/)
 Since I started angel investing 14 years ago, I’ve invested in over 100 early-stage startups.
Here’s what I’ve learned about what works in angel investing and what doesn’t through
painful experience and a few successes.
 It takes 7–12 years for returns.
 Startups claim they’ll exit in 3–5 years. So I made a bunch of investments over the first 3
years expecting those returns to fund the next investments.
 After 3 years, my portfolio of 10 companies had returned exactly $0. The piggy bank was
empty. I had nothing yet for my efforts except ten lines on ten cap tables. Oops.
 I eventually did well from those investments. It took 9 years just to get back to breakeven and
12 years before getting a decent return.

5. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Entrepreneur's Handbook by DC Palter (https://entrepreneurshandbook.co/).
 The J-curve is a killer. Losses come quickly. Successes take 7–10 years. Big successes take
10–15 years. If you want to be an angel investor, be prepared to wait.

6. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Entrepreneur's Handbook by DC Palter (https://entrepreneurshandbook.co/).
 Look for exponential businesses
 With a 90% failure rate, a 10x return for one of 10 companies is not much better than break
even. A 20x return that takes 12 years is an annualized ROI of 6% for the portfolio. I can do
better putting my money into an S&P index fund, donate 5% to founders, and still come out
ahead.
 I need a 100x exit to get a 21% ROI and make up for having the money locked away for
years.
 That means having a good product and a good business is not enough. The opportunity has
to be exponential to be a good investment.

7. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#1: Fall in love with the problem, not the solution.
Uri Levine, Co-Founder of Waze, Moovit, etc.

8. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#2: The bigger the problem the better the reward.
Uri Levine, Co-Founder of Waze, MoveIt, etc.

9. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#3: Nobody will pay you for an idea - but will buy a business

10. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#4: Expect to be Waiting for Godot (play by Samuel Beckett)

11. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#5: Bio-entrepreneur = new clinical syndrome
acquired functional manic-depressive disorder (AFMDD)

12. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#6: Don’t be afraid of the money – be knowledgeable
 5 million new businesses started in 2022, of which >99% started without raising external
capital
 50,000 startups got funded by angel investors. Angels look at 40 companies for every one
in which they invest
 1,500 startups got funded by venture capitalists in the US. VCs look at around 400
companies for every one in which they invest

13. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#7: Surround yourself with good people
 Scientific Advisory Board
 Business Advisory Board
 Consultants: IP Law, Business Law, Tax & Accounting, Regulatory (e.g., FDA, CPT)

14. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#8: Ignore the naysayers

15. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#9: Plan for a very flexible timeline

16. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Market research: reach out to colleagues and assess how big the problem really is
 Know how the idea will create revenue down the road (e.g., CPT codes, value based
care, etc.)
 Put the idea to paper and be prepared to continually change and refine it going
forward
 Protect the idea as best as possible
 Software is copyrighted and not patented
 The more patents the better for investors
 Patents protect for 20 years, but it may take 15 years to success
 Build prototype

17. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Market research: prototype
 Refine product
 Regulatory proceedings with FDA if needed & Quality Systems
 Market research (once cleared by FDA): test the product in the market
 Market research: where are the best sales opportunities?
 And the list goes on and on……

18. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP
 Ten axioms of a bio-entrepreneur
#10: Business schools teach “fail quickly”. For bio-entrepreneurs, “failing
quickly” is guaranteeing “failure”. Be prepared to pivot quickly.

19. 10 THINGS TO KNOW BEFORE STARTING DOWN THE ROAD OF BIO-
ENTREPRENEURSHIP