How to Get Funding for Lab Research
With the threat – and manifestation – of pandemics becoming frequent events in today’s globally interactive population, biotech is a thriving business.
In the first quarter of 2020, funding is down about 16% over the fourth quarter of 2019. While this might translate into heavier competition for less money from overly cautious investors in the short run, the long-term outlook for biotech is exciting.
Bottom line: you’re going to have to work harder for funding opportunities. Fortunately, you have a lot of alternatives.
Most startups that successfully secure research funding solicit multiple sources, with expectations of a return on investment (ROI). Your strategy should be “all of the above,” exploring every possible financing avenue.
Be prepared. Each type of funding requires a different approach. Before you even think about approaching a lender or investor, or filling out a grant application, get your paperwork together.
Make sure you understand the requirements and meet submission deadlines during the application process.
No matter who you’re standing in front of, a VC, a small business lender, or a research council, they want specific reasons for the cash infusion, and may impose restrictions on how you can spend it. Time your request to coincide with a new project, a new phase of research, new analytical lab equipment, or on expansion building on demonstrable business growth.
In your business plan, detail exactly what you need to spend money on: from replenishing your supply of pipettes, to moving to a bigger lab space, budget out what you need and be prepared to show your work.
Dazzle them with knowledge
Investors will have questions. To impress them, you’ll need to be both knowledgeable and confident. This is what you need to know.
- Funding terms:
- Valuation – An independent analyst estimates the value of your company based metrics including management, capital structure, prospective future earnings, and the market value of assets.
- Percentage / ownerships – Owners, partners, and shareholders in your business.
- Burn Rate – Negative cash flow. Essentially how much money you’re spending per month.
- Budget expertise
- How will you spend their money?
- Savings opportunities on big-ticket spend:
- Your roadmap
- When will you be able to go to market?
- How long until you run out of money?
- What approvals do you need? Will your project need approval from the FDA?
- Back your assertions with data – Be prepared to explain why your research is needed.
- What percentage of the population will be affected?
Grow your network
It’s not all about who you know, but name recognition is important in any industry, and impressive in the sciences. Join high-level groups and discussions, and attend events and presentations prepared to make insightful comments about the subject. More than just meeting people, you want to impress them with your knowledge and passion. You never know when a contact may result in a funding opportunity.
Pitch the right investor
Once you’ve defined exactly what you’ll use the money for, research investors to find the right fit. Start with grants or fellowships, and look over the application brief to make sure your grant proposal meets their guidelines. Identifying funders who support whatever you need the money for.
Create a visual presentation
Assemble a presentation that includes:
- The problem you intend to address. Detail the focus of your lab and the need.
- Your unique selling proposition – what makes your research idea unique and valuable?
- Representative data – prove the need exists. Who or what will your research benefit?
- Competitive analysis – how many labs are working on the same problem?
- Your business capabilities and expertise of your staff
- Projected timeline
- Your funding request – the amount of funding you need
Think of each of these points as an elevator pitch. Boil it down to the fewest possible words that make your point. Be succinct and to the point. Investors want to get to the bottom line as quickly as possible.
Your goal is to convince your audience with ideas, facts, and capabilities. Before presenting to funding agencies, get outside opinions: peer reviews from colleagues and opinions from non-science contacts to be sure it’s understandable to anyone.
Research Funding Sources
The type of research projects you’re planning will heavily influence your funding sources. Funding programs are offered by private foundations, federal grants, VCs, or loans.
- Grant programs and public funding
- National Institutes of Health (NIH) Grants & Funding
- National Endowment for the Humanities (NEH)
- Federal Grants (Grants.gov) (apply to a federal agency)
- Department Of Defense – Congressionally Directed Medical Research Programs
- National Science Foundation (NSF) Biological Sciences (GRU – paid service)
- Foundation Directory Online (Paid service)
- Research Professional (Paid Service)
- University funds
- American Association of State Colleges and Universities (AASCU) Grant Resource Center
- GrantForward (Formerly IRIS – paid service offered by the University of Illinois)
- Private research grants
- Venture capital
- Biotech Funding
- Startup loans
No matter who you’re pitching, you can improve your success rate with knowledge and confidence. And impress them with excellent budget decisions; cut your expenses by leasing your lab equipment from Exceder!