SulfotoolsClean Peptide Technology
A team of talented chemists from Technische Universität Darmstadt is eager to launch a company in the field of peptide chemistry. Here’s how I have supported them.
In August 2014, Professor Harald Kolmar, a university professor at TU Darmstadt’s biochemistry department sent me an email. Harald and I know each other form my days at that university. Post graduation, we had twice spoken about my intentions to one day build life science companies. In his email, Harald explained that a team of chemists in his working group had developed a new technology for the synthesis of peptides. This technology promised to reduce the use of hazardous and toxic chemicals from thousands of tons per year to almost zero which in return would massively affect synthesis costs.
The team, Harald said, was eager to commercialize their technology through an academic spin-off company. However, they were lacking expertise from a business perspective. Harald wanted to know, if I was interested in the project. Of course I was. So I got in touch with the inventor of the technology, Sascha Knauer. At the end of a first phone call, we decided I should meet the whole team (then a team of three chemists). During that meeting, I learnt more about the technology and the team’s strategy to bring it to the market. We brainstormed different business model options and then discussed their financing strategy.
Applying for Public Funding
Sascha and his team intended to apply for EXIST Transfer of Research, a support program of the Federal Ministry of Economics and Energy which promotes technology-based business start-up projects in the pre-start-up and the start-up stage. The purpose is to support research teams at universities or research institutes so as to enable them to provide proof for the technological feasibility of their product idea and to prepare the business start-up. Funding includes staff expenses for up to four staff members and 250,000 Euros for materials and equipment. The average funding period is 18 months in the pre-start-up phase. During a second funding phase, the newly founded companies can be supported with up to 180,000 Euros to continue product design, for instance up to the prototype realization and to be able to solicit external funding for their company. All in all a fantastic deal, if you get it. So what do you have to do in order to get that kind of non-refundable grant. You have to write a project proposal which is pretty much a business plan according to rules laid out by the Federal Ministry of Economics and Energy. Don’t get me wrong. I do get why there needs to be some sort of quality control mechanism. After all, I’m not only an aspiring entrepreneur but also a tax payer.
After our meeting, Sascha and his two colleagues decided I should join them in their efforts to commercialize the peptide technology. In the following weeks, we had a closer look into what needed to be done in order to hand in a compelling project proposal in January of 2015. Everyone was assigned certain parts of the document to work on and I tried to guide them in the right direction as to how we should present information and which parts we should put a particular focus on. Months of doing extra hours after having done the work for my day job followed. I needed to not only get an in-depth understanding of the technology and its USPs, but also think about ways of how to position it in the market. And I was responsible for the financing section of the project proposal / business plan.
Science4Life Venture Cup
We also decided to take part in Germany’s most renowned annual business plan competition specialized in Life Sciences and Chemistry – Science4Life Venture Cup. The competition is sponsored by the provincial government of Hesse and sanofi and is separated into three phases:
The first level of the competition is to generate a brief, concise description of your idea and of potential customers. All ideas are evaluated by scientists and economists.
20 x participation in one-day-workshop with experts from the Science4Life network
3 x inauguration at the conceptual phase ceremony in Berlin
The second level of the competition is to generate a brief, concise description of the future business. Business ideas are evaluated, along with a company’s representation and a forecasting market evaluation. A convincing executive summary is the key part.
10 x 1,000 Euros
20 x two-day workshop with individual coaching by experts of the Science4Life network
In the third phase of the competition teams establish a complete business plan with the help of seminars and workshops given by experts of the Science4Life network. After finishing the business plan, it will be evaluated by our panel of experts.
1st – 5th place participation four-day-workshop (founders’ workshop)
1st place: 25,000 Euros
2nd place: 10,000 Euros
3rd place: 5,000 Euros
4th and 5th place: 3,000 Euros
6th to 10th place: 2,000 Euros each
I was in charge for the documents of all three phases and I am very proud to say that we were successful all the way. We were invited to the one-day workshop after the first level of the competition, we were one of the top 10 teams that received 1,000 Euros in the second phase and we made the top 5 in the businessplan phase. This allowed us to participate in the three-day founders’ workshop which was an amazing experience. The final award ceremony took place at the German Central Bank in Frankfurt on 13th July 2015. We came second. This is not only a fantastic result, but also a massive door opener for Sulfotools.
Prof. Dr. Maas (CEO of Sanofi), Sascha Knauer, Christina Uth, Martin Bellof and Tarek Al-Wazir (Hessian Minister of Economics, Energy, Transport and Regional Development)
Photo by Nathalie Zimmermann
I am a firm believer that it is very important to get market feedback for a start-up’s technology and business model as early as possible. At the end of the day, nobody wants to develop a product or technology only to later realize that nobody gives a [insert word of choice] about it. Of course, step one is always to secure intellectual property. But after that, founders need to get out of their lab and find answers to some very important questions (particularly in a b2b environment):
- Which companies are potential customers?
- Who are the decision makers within these companies?
- What kind of data or proof do the decision makers require to become paying customers?
Some people argue that this approach can be viewed as showing weakness and that you should always disclose as little as possible as to where the product or technology development is at. Perhaps I’m too romantic about business in general, but I strongly disagree with that mindset. I view transparency or honesty (name it as you wish) as an asset. The market will eventually find out where the development of a product or technology is at and if it creates value or if it doesn’t. It will happen. So why not be open about it from the start. At least this leaves founders with the opportunity to involve future customers in the development process. Plus it builds up credibility and trust, both of which are enormously important if a start-up wants to succeed in business.
For Sulfotools, we went with that approach. We discussed the technology with different stakeholders and key opinion leaders in the industry. Feedback was great. It did not only help gear R&D efforts better towards future customer’s requirements but also led to discussions around potential collaborations. Plus, it also helped raise confidence in the technology. Not that Sascha and the team were lacking confidence, but at the end of the day, it does help to hear that the market is interested in an invention.
Parting Ways and Conclusion
Post Science4Life, the Sulfotools team and I decided to part ways. Sure, we had been quite successful so far. However, for some reason during the months we had worked together, we had noticed that our ways of working were very different. It felt like we just didn’t click as a team. So we decided it was in the best interest of the future company to move into separate directions. Let me be honest – I would have loved to lead the commercialization of the Clean Peptide Technology. I believe it will change the way peptide are being manufactured forever. However, I also strongly believe that a team of company founders needs to be able to withstand future company crises. And as of today, I’m not sure the team would have. Entrepreneurs desperately need to assess the team prior to founding the company. When you realize a team doesn’t work, don’t be afraid to change it. The company is always bigger than individuals. So, for the sake of Sulfotool’s future success, I needed to take a step back.
From now on, I will be standing at the sideline, interestedly watching Sascha and Christina fighting to turn the peptide industry upside down. Still, I am very proud of the fact that I was part of Sulfotools’ very first steps. The last nine months also led to an awful lot of realizations which helped me grow personally and professionally. And I strongly believe, this experience has made me an even more valuable future team member for other teams. To me that is all that matters.
(20th July 2015)