Entrepreneurial Funding for Medical Research Companies

By Thomas N. Cerovski

The funding of entrepreneurial concerns with venture capital is commonly done in many industries and for many types of companies. The process to obtain venture capital is similar across these industries with some exceptions. One such exception is the field of medical research. Entrepreneurial funding in the medical research field is characterized by a different style for a business plan, more amounts and a diversity of funding opportunities, and a process for free publication and evaluation of proposed medical innovations in medical journals. Generally speaking, innovations in this industry are more quickly rushed to production because of their value to human life. This rush to produce for human consumption has a corresponding emphasis on the identification of research areas and specific funding.

The business plan for a medical company looking for outside funding is slightly different than those for companies in other industries. It is much more important to identify the medical issue of concern and the technological break through that the innovation brings to the table. A strong management team is also important, but their is little need for a long and successful track record. The is very little emphasis need on sales and marketing because the process will be "self marketed" if the technology is sound and saves lives.

Because medical research is conducted to enhance, improve and prolong human life, it is a specific business industry with interests and a focus on more than profits. The federal and state governments, major corporations, and altruistic groups often provide funding opportunities that are not available to entrepreneurial companies in other industries. The federal government provides billions of dollars in grants to medical companies, especially to small companies with a specific research goal. The results of this research help to promote the public health, confirmation of government regulatory concerns, a healthier military fighting force, and a constantly improving standard of living for the masses. The monies for this subject research are available form the National Institutes of Health, The Food and Drug Administration, the Department of Defense, and the Department of Agriculture. These sources are sorted by subject and are usually associated with very specific research goals that must be met to obtain funding.

The industry also has informal clearing houses that provide a network that brings together medical researchers with technology to investment mangers with capital. These business contacts provide a competent medical evaluation of the proposed technology and associated funding. As mentioned, the need to rush life-saving technology to the public is understood well by investors in this industry, and the revenue that can be obtain by a medical "home run" promulgates their interest.

Medical "home runs" are reviewed and published in medical journals, usually for a modest charge if the technology or process advances the medical profession. It is in the interest of the publication to provide cutting edge technology and interesting reading to their subscribers to maintain a profit. As such, a medical technology can be marketed nearly for "free" if it can be published is a leading journal. It is highly recommended that papers be developed for publication whenever capital is sought in this industry.

Entrepreneurial funding in the medical industry is different than other industries because the emphasis of the business plan is different, there are more opportunities for public and private funding, and a process exists for the publication of the proposed innovation through medical journals. Some websites of interest in this area include medical finance and publications:

http://www.nih.gov/grants - this website at the National Institutes of Health provides a subject/category view of medical research monies and grants available to small companies. The site contains contact information and references to the process and forms required to apply for federal grants.

http://www.idinmagic.com - this website is a privately funded database of all government grants available to companies. This includes large government agencies and small concerns. The website can be searched for potential matches to an entrepreneurs' research area for a fee.

http://www.nejm.com - this is the website for the New England Journal of Medicine, one the leading medical journals that publishes innovations in medical research. The journal often publishes work that is not yet ready for general consumption and is a great source for free advertising is a paper can be published. Contact information for paper submission is available on the website.

http://www.ama-assn.org - this is the website for the Journal of the American Medical Association, one the leading medical journals that publishes innovations in medical research. Contact information for paper submission is available on the website.