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From faculty to founder: What to know before starting a company, from a University of Houston expert

There are three key things every faculty who wants to start a company should think about. Graphic by Miguel Tovar/University of Houston

Trying to start a business as a faculty member in academia? Don't fret. As daunting as starting a company can seem, this blog will aim to give any prospective entrepreneur useful insights to getting started.

Jason Eriksen, Ph.D., an associate professor of Pharmacology at the University of Houston, has founded three different Biotech companies since he's been at UH: Alzeca Biosciences, Teomics, and Swift Front.

Alzeca was the first company he co-founded with Dr. Ananth Annapragada, from Texas Children's Hospital back in 2009.

"The mission of Alzeca is to develop an inexpensive non-invasive diagnostic test for the detection of Alzheimer's disease and other neurodegenerative disorders," Eriksen said.

The second company was Teomics that he founded to "develop better diagnostic tools for scientific and medical research."

Finally, the third, and most recent, startup Eriksen founded was Swift Front.

"The mission of Swift Front is to develop a fully automated high-speed microscope platform that can be used to generate three dimensional images of whole organs or other huge objects at speeds 1000 to 10,000 times faster than what's commercially available today," he said.

According to Eriksen, there are three key things every faculty who wants to start a company should think about:

1. Mind the culture gap

Scientists evaluate research by considering whether it makes an original contribution to our understanding of the world. Businesses have a different rationale, which, by and large, is to make money. This engenders a huge culture gap. Your greatest, latest discovery in the lab may have no immediate practical application, and will never be of interest to businesses, unless it has the opportunity to become commercialized. As opposed to a company with an established business model, startup companies like yours will have neither an established technology, nor an established base of customers. As a founder of a startup, your primary mission is to identify who is going to buy your technology, and why they are going to buy it. Get out of the building to discover your customers.

2. Remember there is no single path to commercialization

It's a very long road from an idea in the lab to a commercial success. There are many ways to go from the laboratory bench to the store, and commercialization is just like any business process. It's part art, and part science; part inspiration and part perspiration. There are no shortcuts to becoming successful. So, if anyone tells you at the start that your idea is a guaranteed winner (or not), don't believe them. There is a lot of hard work that has to be done to see if an idea can make it.

3. Stay self-funded as long as possible

Starting a business is one of the hardest things you'll ever do. It takes time, energy, and money… a whole lot of money. More money than you have in your bank account (probably). Does that mean you need to find an investor? No. Avoid taking investments too early in the company. Whether you head to the bank, call a rich family friend, or tap an investor, you give up control as soon as you hold out your hand for money. Retain control of your business's money, and you will keep control of your business.

Money is the Biggest Obstacle

Obstacles are inevitable when starting a new business. "Money makes the world go round, and one of the most challenging obstacles for any new company is to have enough money to keep moving forward," Eriksen said.

Eriksen said his first company, Alzeca, was "self-funded for several years." In order to move the company forward, they needed to seek non-dilutive forms of funding to develop their technology.

Types of Non-Dilutive Funding

  • Grant Awards
  • Bank loans
  • (Forgivable) Loans from Family and Friends
  • Licensing and Royalties from Products
  • Tax Credits
  • Crowdfunding

Eventually, Eriksen and his team at Alzeca were ready for human trials and needed millions of dollars to do so.

"By this point, we were fortunate that we had an excellent team of founding members, consisting of myself, Dr. Annapragada, a founder with deep business experience and a CEO who did a lot of the actual fundraising for us. Together, the team was able to recruit investors with deep pockets, allowing us to move this technology forward," Eriksen said.

Basic Checklist for Starting a Company

Beyond understanding the larger concepts behind starting a company and that money is essential, here are a few things to remember, according to Eriksen:

  1. Ask other entrepreneurs for advice
  2. Identify your target audience/customers
  3. Believe in your idea and don't let anyone tell you otherwise. Work hard and see for yourself if the idea will work
  4. Seek out what resources your university offers for entrepreneurs
  5. Avoid taking investments too early in the company. Retain control of your business's money, and you will keep control of your business.
  6. When it's time to expand, use non-dilutive types of funding
  7. Have a strong team behind you that wants to see the company succeed

What's The Big Idea?

Any aspiring entrepreneur who is considering starting a new company, but has no previous experience, should ask other entrepreneurs for advice. UH offers a number of programs that support faculty entrepreneurs such as the regional iCorps program and a growing Office of Technology Transfer and Innovation at the UH Technology Bridge. Be sure to check out your technology transfer office at your university to see what programs are available to support you as you get started.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton is the communications coordinator for The Division of Research.

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Building Houston

 
 

Optellum and Liongard have hired two new members to their executive teams. Photos courtesy

A couple of Houston tech startups have recently announced new appointments to their C-suites. A med tech company with its national headquarters in Houston has a new leader, and a Houston software has a new exec focused on strategy.

Optellum names new CEO

Jason Pesterfield will lead United States operations for Optellum. Photo courtesy of Optellum

Optellum, a medical software startup based in the United Kingdom and has its United States HQ in Houston, has appointed Jason Pesterfield as CEO to lead growth in the U.S. clinical market. Optellum AI-based software enhances early lung cancer diagnosis and therapy with its medical device software platform, Virtual Nodule Clinic.

Pesterfield was previously the president and CEO of Veran Medical Technologies, a leader in image-guided lung cancer diagnosis. He brings 25 years of leadership experience in the medtech sector. Optellum was founded by Václav Potěšil, Lyndsey Pickup, Timor Kadir, Professor Sir Mike Brady, and Jérôme Declerck.

"It took us almost a year to find the right successor who shares our vision and has the right expertise to take Optellum on to the next stage of growth," says Potěšil in a news release. "I am really excited to work with Jason, to make Optellum's platform available to every clinician in the USA and around the world, and to help them diagnose their lung cancer patients as early as possible. With Jason on board, I can focus on advancing Optellum's vision to transform early lung cancer therapy through partnerships that harness the power of AI software combined with molecular diagnostics, robotics and interventional devices, and drugs."

Liongard announces chief strategy officer

Patrick Schneidau is the chief strategy officer for Liongard. Photo courtesy

​Houston software-as-a-service company, Liongard, has named Patrick Schneidau as chief strategy officer. The company, founded in 2015, was a 2021 InnovationMap Awards finalist and reported that the team was looking to expand by around 70 new hires over the next year.

"Liongard is an incredible Houston growth story," Schneidau tells InnovationMap. "Our founders, Joe Alapat and Vincent Tran, have built a first-class team that allow technology service providers to operate at 10x by providing unprecedented insight and data into the systems deployed in the modern IT stack. In a rapidly growing market, they are quickly becoming 'must have' technology. I'm excited to join to team to accelerate their growth into new markets and with new products."

Schneidau spent over a decade at Houston-based PROS before serving in C-level positions at two other Houston startups — Commtrex and Truss. He's also previously served as talent committee chair for Houston Exponential.

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