Gay Yuyitung – Executive Director, McMaster Industry Liaison Office
Launching a startup company requires commitment, dedication, and perseverance. As one of
Canada’s most research-intensive universities and a proud sponsor of Lions Lair, McMaster
University and our team of experts at McMaster’s Industry Liaison Office (MILO) know that
researchers often need support to transfer their discoveries from the lab to the market.
McMaster researchers disclose more than 80 inventions and creative works to the McMaster
Industry Liaison Office every year – and many of these inventions form the basis for new
startup companies that generate social and economic benefits for Canadians and the world.
Enedym, Empirica Therapeutics (acquired by Century Therapeutics), VoxNeuro, Altus Assessments, Elarex and Synmedix are just a few McMaster-affiliated startups that have seen incredible success in recent years. Cumulatively, McMaster startups have created over 500 highly skilled jobs in Canada and over 800 worldwide. They have generated over $20 million in annual revenue, raised over $570 million in financing, and have a market cap of $715 million.
Starting a company truly takes a village. Not only do you need to secure intellectual property rights to your inventions to create a competitive advantage, but you will also need to develop your technology into a product or service that is scalable and meets a customer need, as well as identify and acquire investors, suppliers, partners and customers to transform your innovation into a successful business. Our team at MILO is available to support researcher-based companies and has put together a guide to help all founders.
Things to Consider When Starting a Business
Developing a Business Plan
Entrepreneurs should build a thoughtful business plan that can help them develop their technology and attain sufficient revenue to sustain and grow their company. Having a business plan will come in handy when meeting with investors and pursuing funding. It is important to note that this plan is not fixed – it should be revisited frequently to reassess the state of the business.
A business plan should be clear, concise and include the following:
Pursuing Investors & Funding
The process of transforming a technology into a viable product typically requires significant investment from venture capitalists (VCs) or angel investors. VCs and angels are private investors who take on high risk ventures with goals of high returns. Return requirements vary based on industry and stage of funding, but many investors seek 10X their initial investment over 5 years.
Angel investors are typically high net worth individuals who have a personal interest in
funding new companies. They are often willing to invest in earlier stages and with smaller
amounts of money than VCs in exchange for equity. They can take passive or active roles in
the startup.
Compared to angels, venture capitalists can invest larger amounts of money in a company,
in turn receiving more equity. VCs also exercise control and bring experienced management
talent to help guide and grow the company. Sometimes they invest in several rounds of
funding and are part of a larger consortium of investors in the company.
Startups may also investigate and pursue funding from non-traditional sources such as
government grants, bank loans, and crowdfunding (GoFundMe, Kickstarter, Indiegogo, etc).
Avoiding Potential Pitfalls
Creating a new company is a high-risk endeavour. Some common problems that can cause academic startups to fail are:
We hope this guide can act as a starting point for commercializing your research. Read the full startup guide here and for more information and resources, please visit research.mcmaster.ca or contact MILO at [email protected]
