This document provides helpful tips for aspiring entrepreneurs from a venture capital perspective. It emphasizes the importance of protecting intellectual property, understanding regulatory requirements to bring products to market, choosing advisors carefully, and setting realistic expectations for fundraising and valuation. Additional tips include focusing presentations on business models and clinical data, seeking experienced investors, and having fun with the entrepreneurial process.

1. Helpful Tips for the
Aspiring Entrepreneur -
A Venture Capital
Perspective
Emmett Cunningham M.D., Ph.D., M.P.H.
Partner, Clarus Ventures, LLC
www.clarusventures.com

2. McCormick Place, Chicago
Spotlight on Innovation in Ophthalmology
From Theory to Therapy
Monday, October 20th, 2014
12:15PM - 1:45PM
GRAND BALLROOM S100C

3. Protect Your Ideas (IP)
Is it still intellectual
property theft if the
ideas aren’t intellectual?
• Draft a dated / signed invention disclosure
• File with counsel / tech transfer office

4. File Before You Publish or Present
“Prior art” is no longer patentable

5. Choose Your Advisors Carefully
• Discrete
• Knowledgeable
• Experienced
• Counsel
• Consultants
• Institutional
Investors
CDA

6. Core
Team

7. Understand the Difference
Between a Company and a Product
Tools
Instruments
Small market devices
Small market drugs
Multiple products
Large markets
Product Company

8. Understand What it Takes to Bring Tools,
Devices, and Drugs to Market
Tools
Instruments
510(k) Devices PMA Devices
Drugs
< $500K
1 year
$5-50M
3 - 5 years
$50-200M
5-10 years
Ophthalmics
Individuals TeamsNon-Ophthalmic drugs can cost over $1 billion

9. Think Through What Role You
Want to Take in the Process

10. Know Your Own
Desires and Limitations

11. Set Realistic Expectations
Regarding Valuation
“A small piece of a big pie
is much better than a big
piece of nothing ……”

12. Money is Only Part of the Reward…..
The primary
objectives are to
see your idea
become a reality &
help patients …

13. Money
The Most Expensive Thing You Will Ever Buy

14. Understand Funding Sources
Stage
Source
Of Funds
Funds
Required
Availability
Of Funds
Modified after: Center for Venture Research – University of New Hampshire
Pre-Seed Seed / Startup Early Late
Founders
Friends
Family
SBIR / Foundations
Angels / Incubators
Institutional Investors (VC)
$50K $100K $1M $100M
Risk
Risk Not drawn to scale!
“Innovation Gap”
High
Low

15. $651
$665 $660 $666
$670
$688
$706 $701
$702
$656
$674 $675
$820
$810
$779
$764
$740
$763
$770
$741
$727
$670
$500
$550
$600
$650
$700
$750
$800
$850
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
NEI (Actual) NEI (2014$)
NEI Funding Flat, but …
Down ~25% after Inflation (2014$)
28% of RO1s Funded
Inflation Calculator
http://data.bls.gov/cgi-bin/cpicalc.pl
Data provided by :
Matthew McMahon, Ph.D.
Director, Office of Translational
Research, NEI
$0

16. Founders, Friends, and Family
(Typically < $500K)
“Yes, that is me.
We’re a very new company.”
“You’ll never guess who
I bumped into today…”
Founders
Family
Friends

17. Research Grants and Foundations
(Typically < $1M)
tgf
The Glaucoma Foundation
info@glaucomafoundation.org
inforequest@rpbbusa.org
info@jdrf.org

18. Angel Investors
(Typically < $2M)
Ask local entrepreneurs, lawyers, etc…..
https://www.cbinsights.com/blog/top-angel-groups-mosaic/
Top 20
Healthcare
Angel Groups

19. Angel Investors
(Typically < $2M)
https://www.cbinsights.com/blog/healthcare-periodic-table/
• Launchpad Venture Group
• Central Texas Angel Network
• Houston Angel Network
• Keiretsu Forum
• Maine Angels
• Sand Hill Angels
• Life Science Angels
• Tech Coast Angels
• BlueTree Allied Angels
• Queen City Angels
• Desert Angels
• Golden Seeds
#1
www.angelcapitalassociation.org
Ask local entrepreneurs, lawyers, etc…..

20. Incubators & Accelerators
(Various Models - Typically < $2M)
www.forsightlabs.com
And many universities…..
http://www.jnjinnovation.com/
http://www.roche.com/research_and_development/partnering.htm
Ycombinator
www.ycombinator.com
http://startx.stanford.edu/

21. Innovation Gap Widening
Stage
Source
Of Funds
Funds
Required
Availability
Of Funds
Modified after: Center for Venture Research – University of New Hampshire
Pre-Seed Seed / Startup Early Late
Founders
Friends
Family
SBIR / Foundations
Angels / Incubators
Institutional Investors (VC)
$50K $100K $1M $100M
Risk
Risk Not drawn to scale!
“Innovation Gap”
High
Low

22. Venture Capitalists
(Typically > $5M)

23. Venture Capitalists
(Typically > $5M)
www.nvca.org
https://www.cbinsights.com/blog/healthcare-periodic-table/

24. Source: PricewaterhouseCoopers, Silicon Valley Bank
Total VC vs BioPharma vs
Medical Device Investments (2000-2013)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$-
$10
$20
$30
$40
$50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Billions
Total VC $ BioPharma Device
$99 Bn Healthcare ~ $4Bn
Courtesy Jon Norris, SVB

25. Lifescience Venture Capital Funding Gap
$6.0
$7.3
$9.1
$8.6
$6.6$6.3
$7.7
$6.7
$6.7
$3.4
$…
$7.9
$6.1
$5.2
$1.8
$3.7 $3.6
$3.9
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Invested ($Bn)
Fundraised ($Bn)
Source: PricewaterhouseCoopers, Silicon Valley Bank Courtesy Jon Norris, SVB
$2.8 Bn
(1.7x Gap)

26. 0
100
200
300
400
500
600
0
5
10
15
20
25
30
TotalDollarsInvested($M)
NumberofVentureDealsforDrugandDevice
# Rx Deals # Device Deals VC Investment ($USD, Millions)
business intelligence
Ophthalmic Investments by VCs Over Time
(1999 – 2014*)
VC Funding Stable
• ~ $400M / year
• 15 – 20 deals
*2014 figures through September
SOURCE: Strategic Transactions

27. VC Investment By Ophthalmic Indication
(1999-2014*)
4…
36
21
18
12 11
8 7
12
7
3 4
0
5
10
15
20
25
30
35
40
45
50
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
NumberofDeals
PrivatePlacements($M)
Dollars ($ Millions) Number of deals
*2014 figures through September
SOURCE: Strategic Transactions

29. 50%
100%
150%
200%
250%
300%
350%
400%
450%
2004 2006 2008 2010 2012 2014
10-year Stock Price Performance
53%
292%
Source: FactSet as of 09/16/14
1 Medtech index consists of medical technology companies traded on North American exchanges with market capitalizations over $1bn
78%
Returns summary
10 yr 5 yr YTD
Medtech1
63%
Biotech
235%
S&P 500
87%
16%
19%
9%
Best Three Years for Biotech in a
Decade

31. Industry Partnerships
(Any Stage – Best After Some Value Creation)

32. Give Yourself Enough Time To
Raise Money – Up to12 months…

33. Ask for Enough to Get to an
Important Milestone (Data) …Plus
…time to raise more
money….

34. Seek Out Experienced Investors
“Your financial goal is to break even?
You must be an experienced investor!

35. Come to Pitch Meetings
Practiced and Prepared
He’s Expecting you………..

36. Take the Time to Write a
Concise Business Plan
• Consolidate your ideas
• Understand the strengths and
weaknesses of the
opportunity
• Learn the market dynamics
• Construct a realistic budget
and timeline
• Use of Proceeds ; Milestones

37. Focus on Business Model and
Confidence in Rationale – Science and Data
Clinical Results

38. It’s All About the
PowerPoint Presentation
Use Pictures and Graphics

39. And not this . . .

40. Word Slides Are a Sleeping Pill

41. Our Brains are Compartmentalized
Very
Difficult to
Listen and
Read at the
Same Time

42. Average Attention Span ~ 10 minutes
Segment Presentation Into Separate Topics / Q & A
10 minutes
New Topic or Q & A

43. Believe in Yourself …
Innovation
is driven by
individuals
and small
teams

44. And in your vision …
Steve Jobs
“People don’t
know what
they want until
I show it to
them.”

45. Follow Your Bliss……..Not Others

46. You Don’t Always Have to Leave
Your Day Job…..

47. And have fun . . .

48. Plan to Join Us . . .
7th Annual OIS@AAO
Las Vegas, Nevada
November 12th, 2015
4rd Annual OIS@ASCRS
San Diego, California
April 16th, 2015
www.ois.net

49. ecunningham@clarusventures.com
650 238 5014
www.clarusventures.com