We often get the questions:
What is the right moment to participate in the Venture Challenge?
How does it compare to other programs such as offered by many university incubators?
From a distance many of the programs seem very comparable as they all talk about ‘getting investor ready’, ‘build a business plan’, ‘validate your business idea’, ‘improve your entrepreneurial skills’, and in a sense they all touch on those aspects. Yet, there is a big difference in what the programs really offer and at what stage of startup development they are focused. Talking to Venture Challenge participants that have been in other programs and looking at what other programs Venture Challenge alumni participate in we come to the following insight.
Usually, the first step is to enroll in a ‘general’ program that will expose you to the basics and give you a feeling whether entrepreneurship suits you and setting up a startup could be something for you. These programs (such as the Venture Academy in Leiden, Science-based validation in Utrecht, Ace-Explore in Amsterdam) are typically not specifically focused on Life Sciences but give you a general feel of what is takes to start a business and get you to work with general startup tools such as the business model canvas. Often the science or technology is not really talked about as it is all about the customer need. This is great for a start, and you will find out if you really enjoy looking at your research results in a more commercial way.
However, as many of our Venture Challenge participants told us, these programs often cannot consider the specific requirements that a Life Science startup faces, such as regulatory and clinical validation requirements, reimbursement, or the fact that it takes 10+ years to get to the market. Some of the startups (such as drug development ones) will never bring anything to market themselves. Whereas in general the biggest risk for startup is the market risk, and your goal is to get to product market-fit by iterating your product using customer feedback. This is not the case for Life Sciences startups. It is typically clear what the market opportunity is, and the risk is in the science or technology. This requires a different approach that is taking all these factors into account.
That is where the Venture Challenge comes in. In the Venture Challenge all the participants are in Life Sciences or medical technology, and we take much more time to understand in-depth what your science or technology is about. This is important because a typical Life Sciences startup will not enter the market in a few years because of the beforementioned regulatory and clinical validation requirement. This means that you need to try to predict the market in ten years from now and not only look at what solutions are out there today, but also what will come in the next decade or so. In a sense you are much more comparing science and technologies rather than products. You also see this in the way investors typically look at Life Sciences startups. For them the science is key, so much of the work in the Venture Challenge is about understanding the science, determine where it would fit into the (future) market needs and what (pre-)clinical validation is required to demonstrate that the science will work as envisioned.
For this the Venture Challenge does not use standard tools such as the Business Model Canvas, but a set of tools specifically designed to assess the potential of new life science technologies. It originates from within a large company where it was used to identify future innovations and adapted to work specifically for ‘deeptech’ startups such as in Life Sciences. In the past 15 years this approach has proven itself as an excellent tool to build a first business case for Life Sciences startups.
But the Venture Challenge is not an incubation program. It runs only for a period of about 10-weeks and gets you your first plan, insight in what further validation you will need, what will be your likely starting opportunity and how much money is required. We also make sure that you are connected to the right investors that will typically not yet invest in you at this stage but will give you further input on what you need to do to really become investor ready. This in general can take up to a couple of years, usually depending on what further validation is required. And then, an incubation program (such as offered by Unlock_, Ace, or Utrecht Inc) can be very useful combined with pre-seed grants and loans. These programs typically provide office and lab space as well as coaching and mentoring and practical support on setting up your legal entity, finance etc.
In summary. When you are not sure whether the path of entrepreneurship is something for you, you best enroll in a local entrepreneurship program at your own university. If you find out that it excites you, and you have some proof in the lab that your science might work you can apply for the Venture Challenge to build a plan. We typically see people also applying for a Take-off 1 grant around this time. Most of the participants do not have a company established yet at this stage.
After the Venture Challenge you have a much better view on what it takes in terms of time, money, and team requirements. You can then start thinking about setting up a legal entity, negotiating a license agreement with your university etc. And when you are ready to fully commit to the startup you enter an incubator.
Do you have remaining questions after reading this or do you want to learn more on how to apply? Contact Chrétien Herben at firstname.lastname@example.org.