By David Lindsay, Co-founder of Oncora Medical
If you’re thinking about starting a company with VC money, I have a few tips for you! My company, Oncora Medical, is a Philly-based digital health company that just raised a $1.2M seed round; it builds predictive analytics software for radiation oncologists. While fundraising for Oncora, I learned some valuable lessons.
1. Act on good advice. When a venture capitalist takes time out of their day to discuss your business with you, validate them by actually implementing their advice. They may have agreed to introduce you to a potential advisor, key opinion leader, or future collaborator. Follow up with those introductions in a timely manner and try to learn as much as you can from the interaction. If the person you are meeting with gives you a specific suggestion about your product or service, make sure you at least look into the value of their suggestion. If you make progress in the areas that they have identified, you have the perfect excuse to reach back out to them with results. A month or two after the initial email, shoot them a specific update email.
I did this with Oncora after meeting Dr. Gary Kurtzman, the managing director of Safeguard Scientifics’ healthcare practice and lecturer at Wharton. He first took a phone meeting with me back in January of 2015, and strongly advised me to break our “software platform” into three discrete products. Over the next month, our team developed product names (and logos) for the three key components of our software. Dr. Kurtzman is now chairman of our board of directors, and one of my closest advisors.
2. Don’t take low probability shots. One of my advisors once told me something that felt somewhat contrary to the standard sound bite, “You miss 100% of the shots you don’t take.” Paraphrasing, he basically said, “If you miss a bunch of shots, your coach is going to bench you.” When you ask for money and get a no, that is not a good thing. It lowers your confidence (hopefully not too much), but worse, it can make other VCs think they should say no, too (no one wants to buy something that no one else wants).
You can avoid this problem by not asking your VC contacts for money until you are ready (ask for advice instead). You can also phrase your request for money in the subjective. For example, I would always ask VCs the following question during calls: “for you to make an investment in a company like Oncora, what would you need to see in terms of traction, clinical partnerships, etc?” Then go do what they tell you to do and update them in a month (without being too annoying). Then once you have some traction, start asking.
3. Be genuine and nice. This should go without saying, but don’t lie or exaggerate about your progress. VCs are investing in YOU, not just your idea and your traction. When things go wrong with product development (which they inevitably will), your investors want someone they trust at the wheel. When you are genuine, things are just better.
Bio: David Lindsay is on a leave of absence from the MD/PhD program at the University of Pennsylvania and has a BS in neurobiology and MS in mathematics from UConn. He is one of the founders of Oncora Medical, a health technology startup in Philadelphia.