Biomedical Engineering Reference
In-Depth Information
more effectively. The role of the technology transfer office is, in
effect, imagined to be a way of streamlining the process of identifying
opportunities for development and recruiting interested investors:
the technology transfer office thus mediates between institutional
scientists and entrepreneurial investors. Yet critics of this model of
entrepreneurialism suggest that commercialization through the
translation of basic science into viable technological applications
does not occur in a linear manner (Miozzo and Walsh, 2006).
Significantly, it is not clear that the translation process is as linear as
is often assumed in the entrepreneurial model of scientific
development.
1.1.2 Negotiating'thevalleyofdeath'
Criticisms of the linear translation model aside, venture capitalists or
other investors often provide the seed funding and management
experience to get a product to proof-of-concept stage. Once the
proof of concept has been established, this is the point where venture
capitalists typically want to withdraw their investment or see some
profit on the money invested. At this point there are a number of
options for an emerging company in negotiating this phase, each one
of which is essentially a variation on one of three main alternatives.
The first option is to merge with another company, hopefully making
enough money to not only pay the founding partners and investors
back, but to make a profit in the process. The second option is to go
public, ideally raising enough capital both to develop the company
further and to pay back initial investors, while the third option is to
license out proprietary technology to another company which can
develop it further while paying royalties that can be used to pay off
initial investors.
This period of transition is commonly known as the 'valley of
death'. The biggest hurdle for emerging biotechnology companies is
negotiating the process between the initial start-up phase and providing
a return to their initial investors. While merging with another
company, going public or licensing proprietary technology out are
