How do you get your idea out of the lab and into stores? This question has plagued researchers for decades, and for good reason — it tends to be extraordinarily difficult to translate scientific discovery into commercial success. At a talk at the Yale Medical School on October 21st, three investors from Osage University Partners outlined their efforts to help university researchers bring products to market.
Osage University Partners (OUP) is one of the most successful venture capital firms specializing in university research. OUP partners with 90 institutions to find promising ventures, has invested in six Yale startups to date, and is currently tracking an additional 65 at Yale.
Lou Berneman, Founding Partner at OUP, advised attendees that after having a good idea, the most important factor for success is a strong and compatible co-founder. “It’s like choosing a spouse,” he said.
Once a startup has a team and an idea, pitching to investors is the next big task. Matt Cohen, Principal at OUP, detailed the structure of a good pitch deck, According to Cohen, there should be about 20 slides for an hourlong pitch, and the most important component is data, which is critical to show that the startup is worth the investment.
Fundraising can be a difficult process, so Berneman stressed the importance of tenacity when raising capital. For venture capital, said Berneman, “a ‘no’ now doesn’t mean a ‘no’ forever” because they may very well be interested for later rounds.
Berneman also acknowledged many founders’ concerns about dilution during fundraising. “If the percent increase in the value of the enterprise is greater than the percent decrease in your equity, dilution is good,” said Berneman. Many entrepreneurs find it difficult to give up a majority stake in their companies, but as long as the company’s valuation is increasing, it’s a good call.
David Dorsey, Associate at OUP, described the surprisingly tight-knit venture capital community. He told the audience that venture capitalists work together more than new founders might assume, sharing due diligence and interesting opportunities with one another.