IDEA TO IPO JANUARY 2014 SYLLABUS Course Directors: G. Steven Burrill, CEO, Burrill & Company Charles S. Craik, PhD, Professor, UCSF School of Pharmacy; & Director, Chemistry and Chemical Biology Graduate Program, UCSF Teaching Team: Michael Keyoung, Managing Director, International Group, Burrill & Company Tania Fernandez, Director, Burrill & Company Stephanie Marrus, Director, Entrepreneurship Center at UCSF Location: Genentech Hall, Mission Bay Campus, UCSF, various rooms. See weekly schedule. Dates: January 6 to March 27, 2014. Monday evenings starting at 5:15 pm. 2- 3 hours per class, varies weekly depending on content. This course can be taken for credit and is listed as BioChem 241. http://biochemistry.ucsf.edu/courses.html Course Objective This course is about commercialization -- starting and growing a healthcare/life science business that has the potential to scale to a significant enterprise. The content is geared to researchers, post docs, clinicians, residents, PhD and Masters students. We presume no business background. The course will teach you how to take an idea, assess whether the value proposition appeals to the market, determine the market potential, understand all of the elements that comprise a life sciences venture so that you are able to access capital and move forward on a path toward commercialization. You will learn the fundamental skills required to assess a concept or product in the framework of a business opportunity. We include all types of healthcare/life science products and services -- therapeutics, medical devices, diagnostics, tools, digital and e-health. You will experience the entrepreneurial mindset, solve problems, change plans as you gain more information and develop a network of connections. Entrepreneurship research shows that teams are more successful in ventures than individuals. To mirror real life, you will work in a small team on an idea – either yours, a classmate’s or an idea from outside the course such as IP from UCSF’s Technology Management group. You will develop a business plan that guides you in qualifying the opportunity, engages the founding team and helps you attract support from others. The plan will provide milestones and the resources needed to achieve them. You will think through your business model – the way in which the venture will make money – and confirm the model’s viability with the marketplace. Our intent is for this course to give you the skills to create a high-potential, for profit commercial enterprise. You may use this skillset to start a company; to work in an entrepreneurial venture or to bring an entrepreneurial approach to a large company. The teaching team, mentors and lecturers include serial entrepreneurs, venture capitalists and domain experts who can help you refine your plans. The final pitch is delivered to investors in life sciences and healthcare. Objectives and Teaching Methods The objective of this course is to provide an understanding of how to start a company and the issues that can arise in the entrepreneurial process. The course will be taught by experts from the business community who will share their experiences and knowledge. Students are expected to be highly participative and prepared. The course is experiential, meaning that students will gain hands on experience in creating a business plan for their idea. Lectures are held on Monday evenings unless there is a Monday holiday. There are occasional Thursday nights in addition. Guest Speakers The course makes liberal use of guest speakers from the business community in Silicon Valley and San Francisco who provide real world experiences and a network for students. These guest speakers are top tier professionals in their fields and give students exposure to the commercial world. Deliverables The main requirement of this course will be a business plan on a venture of the student’s choosing. Students will work together to develop an idea for a venture, research its potential and develop the resources needed and timing. The course ends with a formal pitch to a group of investors. Parts of the business plan are due on the following schedule: Opportunity assessment: January 27, 10am Business plan outline: February 3, 10am IP section. February 10, 10am Product development plan February 24, 10am Budget, financials, & financing strategy: March 10, 10am The final business plan is due on April 4th and must be submitted in soft copy to the Course Directors and the Teaching Team. Final slides are due on March 24 at 9 am, the date of the presentation. Please have hard copies available for the Teaching Team. Mentors Mentorship is an important element for success of a venture and we have assembled a group of experienced business people to help guide you. Every team will be assigned a mentor who is interested in working on your venture and who has committed to spend an hour a week talking with your team. Our mentors come from the Silicon Valley ecosystem and work with startup ventures, lending their expertise in the “pay it forward” culture we are so fortunate to have in the Bay Area. They will guide you through business issues that emerge as you explore your idea, support you in preparing an investor pitch and cheer you on in the final pitch presentation. Time Requirement: IMPORTANT, PLEASE READ This course is intensive and requires considerable time to be devoted to it. In addition to 2-3 hours of class time weekly, you will need to work with your team on various aspects of the business plan, connect with your mentor and prepare the week’s deliverables. Your total weekly time commitment is estimated between 10 and 15 hours. (If you are a first year grad student, you won’t have time to take this course with your other commitments.) This is a class for those who are motivated. It is very demanding. By accepting a place in the class, you simultaneously prohibit someone else from taking it and you establish obligations to your fellow business plan team members. Please accept this responsibility with serious intent. Students who become "free riders" on their team will receive a grade penalty. Do not sign up for this class unless you are ready to make the commitment and fully engage! Admission Course application forms are available on the Entrepreneurship Center website http://ita.ucsf.edu/entrepreneurship-center/education/courses/idea-ipo . You may apply as an individual or as a team. Acceptances will be limited based on course capacity. When you are notified of your acceptance, you must come to the first course session to be formally admitted. The course takes place over a 12 week period. If you anticipate missing more than one class, you will need to discuss your situation with the teaching team. UCSF Credit This is a 3 credit course and may be taken on a Pass/Fail basis by UCSF students. Berkeley Startup Competition We encourage you to participate in the Berkeley Startup Competition, which will be in process during this course, http://bplan.berkeley.edu/. Any team with a member who is a UCSF or Berkeley student, alum, staff or faculty can apply. The competition provides an excellent opportunity to gain another mentor, expand your networks, gain experience in developing a plan and pitching. The competition is divided into tracks, with a separate Life Sciences track. The overall winner of the competition has often come from Life Sciences and not only wins visibility but also prize money. Prereadings You are expected to complete the pre-readings before the first class on January 6th. While some of the readings come from the tech world, they are generally applicable to life science/healthcare and you should focus on the broad learnings. Here is the list: Noam Wasserman, Harvard Business School, Surprising facts from Founder’s Dilemma: Anticipating and Avoiding the Pitfalls that can sink a startup, http://www.kauffman.org/uploadedFiles/foundersdilemmas-surprising-facts.pdf Quora, What does it feel like to be CEO of a startup? http://www.quora.com/Startups/What-does-it-feel-like-to-be-the-CEO-of-a-start-up Knowledge @ Wharton, How Entrepreneurs Identify New Business Opportunities, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2370 Sequoia Capital, Elements of Sustainable Companies and Writing a Business Plan, http://www.sequoiacap.com/ideas Books (optional) Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist - Feld, Mendelson, Costolo Business Plans that Work: A Guide for Small Business - Timmons, Spinelli, Zacharakis The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company - Blank and Dorf Technology Ventures: From Idea to Enterprise - Byers, Dorf, Nelson Do More Faster - Cohen and Feld Readings The textbook is How to Start and Grow a Life Sciences Company: Practical Advice for Startup Companies and Incubators, edited by Jennifer L. Miller, Ballard Spahr. The book will be available at Genentech Hall before the first class. See the readings attached to each class in the class schedule below. Class Schedule Overview Class # Day Date 1 Monday 1/6/2014 Opening Class 2 Thursday 1/16/2014 State of the Industry 3 Tuesday 1/21/2014 Market Assessment 4 Monday 1/27/2014 An entrepreneur’s story. Business Plan/Model 5 Monday 2/3/2014 IP Pitching 6 Monday 2/10/2014 Forms of Organizations Startup 101 7 Thursday 2/13/2014 Students Practice Pitch 8 Tuesday 2/18/2014 Clinical/Regulatory 9 Monday 2/24/2014 Reimbursement 10 Monday 3/3/2014 Sources of Capital 11 Monday 3/10/2014 VCs Lessons Learned 12 Monday 3/17/2014 Practice Pitching Idea Pitches Financials 13 Monday 3/24/2014 Final Pitches 14 Thursday 3/27/2014 Feedback Session January 6 Overview and course orientation. Why this course can make a difference in your career. Success stories from the past. What it’s like to be an entrepreneur. Review of the syllabus and course expectations. Berkeley business plan competition briefing. Mixer to informally discuss ideas and meet potential teammates. Charly Craik, Michael Keyoung, Tania Fernandez, Stephanie Marrus Readings: Heather Bieber, Top 50 Healthcare Startups, http://www.worldwidelearn.com/educationarticles/top-50-health-care-startups.html RockHealth, Ideas we’d like to fund, http://rockhealth.com/2012/08/ideas-wed-like-to-fund/ (digital health) Ideastostartups, Have you a problem worth solving for your startup? http://www.ideastostartups.com/customer-development/do-you-have-a-problem-worthsolving-for-your-startup-28-questions-to-ask-your-potential-customers/ Text, p 4-9 January 9 Students submit ideas to Teaching Team for review January 9-14 Mentors give feedback on ideas January 14 Students submit final idea proposal January 16 State of the Life Sciences Industry. The annual analysis of the life science industry: opportunities, challenges and trends for the next year. Learn what innovation looks like in 2014, the role it will play in addressing global problems, and how companies will fund it going forward. This is also part of the Entrepreneurship Center’s Speakers Series and will be open to the community. Class will be held in Byers Auditorium, Genentech Hall. Steve Burrill, CEO Burrill & Co. Readings: Burrill & Co, Biotech 2013: Capturing Value January 21 a) Opportunity assessment. B) 2 minute idea presentations by class participants. How do you know if anyone wants the product/service you plan to provide? Who are the customers. How to engage them to give you feedback before you develop the product/service. The scrappy entrepreneur’s way to research the market without a budget. What information investors expect to be credible. Stephanie Marrus, Director, Entrepreneurship Center at UCSF Readings:. Geoffrey Moore, Crossing the Chasm summary, http://www.squeezedbooks.com/articles/crossing-thechasm.html Steve Blank, Customer Development Process, Part 3, http://www.youtube.com/watch?v=NXR_O_Hwuws Steve Blank, No Business Plan Survives its first contact with a customer, http://steveblank.com/2010/11/01/no-business-plan-survives-first-contact-with-a-customer%e2%80%93-the-5-2-billion-dollar-mistake/ Mixer after class to meet mentors. January 24. Teams finalized, mentor matching January 27 An entrepreneur’s story. What it was like to start a company. Business plans and models. Why it’s important to have a business plan. How the plan changes: pivots. What goes into a business plan, framework. Nassim Usman, PhD, CEO, Catalyst Biosciences Readings: Being an Entrepreneur: http://www.benmilne.com/2012-hard-lessonslearned/?goback=%2Egde_4691164_member_202751458 Stanley R. Rich and David E. Gumpert, How to Write a Winning Business Plan, http://hbr.org/1985/05/how-to-write-a-winning-business-plan/ar/1 Zacharakis, Spinelli and Timmons, Business Plans that work: A guide for Small business, http://books.google.com/books?id=CJRDHjMGx7EC&pg=PR5&source=gbs_selected_pages&cad =3#v=onepage&q&f=false Business Models http://techcrunch.com/2011/01/08/business-models-and-teenage-sex/ http://money.howstuffworks.com/5-influential-business-models.htm#page=10 http://blogs.hbr.org/cs/2012/08/business_model_innovation_thro.html Executive summary: http://www.garage.com/resources/writingexecsum.shtml http://www.gsb.stanford.edu/ces/resources/venture_capital.html Video: Guy Kawasaki, Art of the Start, http://www.youtube.com/watch?v=jSlwuafyUUo February 3. A) Intellectual Property. b) Pitching What investors want to know about your venture. The 10 key slides to prepare. What not to say. How long the pitch should be. How to manage the meeting. What to expect. Sean Solberg, Davis Brown Law Firm Naeem Zafar, Lecturer, Center for Entrepreneurship in Technology, UC Berkeley February 10. A) Forms of organization. B) Startup 101 Legal structures for companies. Founders stock, how it works and how to divide it. When you need a Board of Directors and what its role should be. Nuts and bolts/Startup team building. Understanding the issues about organizing a founding team. Recruiting strategies for key hires in an early venture. Compensation. How to leverage advisors and consultants. When to hire and when to get contract help. How to find an office, leasing, equipping it. Dealing with service providers. How to set up an accounting and payroll system. Healthcare coverage. TBD Reading: Text p 16-21, 39-40, 96-103 February 13 Students Practice Pitching Session. Students will present their companies and receive mentor feedback. February 18 Clinical/regulatory. How clinical trials work for therapeutics, devices, diagnostics. How the FDA operates and what to expect. The importance of regulatory strategy. Deciding whether to file ex-US first. The murky regulatory situation for digital health. TBD February 24 Reimbursement. Wade Aubry, MD, Former Senior Vice President & Chief Medical Officer, Blue Shield of California (invited) Who will pay for your technology/invention/app? Payer’s motivation and how to engage them. Formulary decisions by insurers. Outcomes based research. Comparative effectiveness. Bundling payments for total cost of care. Role of health plans. Perspectives on devices, therapeutics, diagnostics, digital health. Reading: PriceWaterhouseCoopers Health Research Institute, Unleashing value: The changing payment landscape for the US pharmaceutical industry. http://pwchealth.com/cgilocal/hregister.cgi/reg/pharma-reimbursement-value.pdf (you need to register on the site to download this) February 28 P Practice pitching. Test your first rev pitch out on investors and mentors to get early feedback. This will be an opportunity to learn what’s missing, what needs to change and give you time to redirect before final pitches. Mentors and Teaching Team March 3 Sources of capital. Life science venture capital. Angel investors. New sources of capital now that the venture model is in trouble: foundations, corporate ventures, crowdsourcing, etc. Sources of capital for digital health ventures. How the investment process works. Key terms in an institutional round. Financials and budgeting. Understanding your financial needs in year one and longer. Building a budget. Calculating the amount of money to get to a milestone. Cash management. Reports you need to monitor the amount of cash you’re spending. Reg Kelly, Mission Bay Capital and others invited Readings Budget templates: http://office.microsoft.com/en-us/templates/startup-budget-TC101877332.aspx http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=10&ved=0CFwQFjAJ&url= http%3A%2F%2Fmyphliputil.pearsoncmg.com%2Fstudent%2Fbp_turban_introec_1%2FStartUpBudget.xl s&ei=PbJAUYWDDuGIygHxtIDgAg&usg=AFQjCNFTMyE9kRNxFUST0MLXXTQ3tP1vJw&sig2=nGxkS50xKGS qQcMnLLSd7g How much does an employee cost? http://web.mit.edu/e-club/hadzima/how-much-does-an-employeecost.html Breakeven analysis: http://entrepreneurs.about.com/od/businessplan/a/breakeven.htm Readings: Text, p 67-69, 81-91 www.thefunded.com. A website with inside information about vc’s, fundraising http://venturebeat.com/category/science/. A blog with information about ventures, investments, deals http://venturehacks.com/. Another blog with good information about startups and trends. Price Waterhouse Coopers Moneytree Report, https://www.pwcmoneytree.com/MTPublic/ns/index.jsp Paul Graham, How to be an angel investor, http://www.paulgraham.com/angelinvesting.html Text p 23-35 March 10 Lessons Learned. Lessons learned. A venture capitalist who has invested and taken roles in a number of companies shares his insights. Leighton Read, Alloy Ventures March 17 Pitches dry run Mentors and Teaching Team March 24 Pitches to a panel of investors March 27 Feedback Session Feedback on the investor pitches. Key takeaways. Next steps on your venture. Steve Burrill, CEO, Burrill & Co. Course Director Biographies G. Steven Burrill, CEO and Founder, Burrill & Company Steve Burrill been involved in the growth and prosperity of the biotechnology industry for over 40 years. Mr. Burrill founded and has been Chief Executive Officer of Burrill & Company, a venture capital and merchant banking firm, since 1994. Prior to founding Burrill & Company in 1994, he spent 28 years with Ernst & Young, directing and coordinating the firm's services to clients in the field of biotechnology, life sciences, high technology, and manufacturing worldwide. He currently serves on the Boards of Directors of AliveCor (Chairman), Catalyst Biosciences, Depomed (NASDAQ: DEPO), NewBridge, Novadaq (NASDAQ: NVDQ), Targacept (NASDAQ: TRGT) and XDx. Previously he served as Chairman of the Boards of BioImagene, Abunda Nutrition and Pharmasset. Mr. Burrill is a founder and currently serves as Chairman of the Board of the National Science and Technology Medals Foundation (NSTMF). He chaired the National Research Council study on linkages in biotechnology between Japan and the United States and was also involved with the US-Japan Science and Technology Agreement Study of Technology Transfer Mechanisms between the US and Japan. His other non-profit activities include serving as Chairman of the Boards of Directors of the Life Science Foundation, the World Council for Ethical Standards, the Vilas County (Wisconsin) Economic Development Corporation (VCEDC) and as Vice Chairman of the National Health Museum. He is also on the Boards of the Bay Area Science Infrastructure Consortium, BayBio (Emeritus), the Buck Institute for Research on Aging, the California Healthcare Institute (Emeritus), The Exploratorium (Emeritus), the Gladstone Foundation, the Kellogg Center for Biotechnology, the MIT Center for Biomedical Innovation, BIO Ventures for Global Health (BVGH), the Harvard Medical School Genetics Advisory Council and the NIH Scientific Management Review Board. He serves on the editorial boards of Scientific American, the Journal of Commercial Biotechnology and Life Science Leader and on the advisory boards of the Center for Policy on Emerging Technologies (CPET) and BioAg Gateway, City of Madison. He is an advisor to the University of Illinois Institute for Genomic Biology, the University of Wisconsin-College of Agriculture and Life Sciences, the University of Minnesota College of Biological Sciences, University of California, Davis, and Duke University, and is an adjunct professor at University of California, San Francisco. He also serves on the Advisory Boards for the Department of Biology at San Francisco State University and the Biotechnology Master’s Program in the Department of Biology at the University of San Francisco. He serves on the BioNJ Diagnostics and Personalized Medicine Committee. Mr. Burrill earned a BBA degree from the University of Wisconsin, Madison. Charles S. Craik, PhD, Professor, UCSF School of Pharmacy Charly Craik is on the Faculty in the department of Pharmaceutical Chemistry, where his lab focuses on structure-function analysis of proteases and their inhibitors. He co-leads the Chemistry and Cancer Program at the Helen Diller Family Comprehensive Cancer Center and is Director of the Chemistry and Chemical Biology Graduate Program. He received his Ph.D. in Chemistry from Columbia University in New York and carried out his postdoctoral research at UCSF with Dr. William Rutter. He joined the UCSF faculty in 1985 and has published over 200 research articles on various biochemical topics. He has co-authored two books, and served on advisory panels for the National Institutes of Health, the National Science Foundation, the National Academy of Sciences and the Department of Energy. He has organized several international meetings on topics including Protein Engineering, Drug Discovery, and The Biology of Proteolysis. The current research in the Craik lab focuses on the chemical biology of proteolytic enzymes and their natural inhibitors. A particular emphasis of his work is on identifying the roles and regulating the activity of proteases associated with infectious diseases, cancer and development. These studies are providing a better understanding of both the chemical make-up and the biological importance of these critical proteins. Dr. Craik founded Catalyst Biosciences, a drug discovery and development company that is creating novel catalytic biopharmaceutical products based on engineered human proteases. Catalyst has raised venture capital from top tier venture investors including Burrill & Co. He and Steve Burrill collaborated to start Idea to IPO 12 years ago in response to a need they saw to educate researchers on starting companies. Teaching Team Michael Keyoung, Managing Director, Pan Asia, Burrill & Company. mkeyoung@b-c.com Dr. Keyoung has more than 15 years of healthcare and life sciences experience through his role as scientist, surgeon, consultant and investor. At Burrill & Company, Dr. Keyoung manages Burrill’s PanAsia Equity Fund, oversees Burrill’s U.S. and European public portfolio companies and leads our Pan-Asia transaction business as well as our global arbitrage efforts across multiple countries in Asia. Previously, Dr. Keyoung was a co-founder of a life sciences healthcare investment partnership in New York. Dr. Keyoung also served as an advisor and consultant leading life sciences venture capital firms, medical devices, pharma, and biotechnology companies. Previously, Dr. Keyoung was a Howard Hughes Medical Institute fellow and received his clinical surgical training at University of California, San Francisco and biomedical fellowship at Memorial Sloan Kettering Institute and Rockefeller University in New York. Dr. Keyoung performed preclinical drug discovery research for Aventis (now Sanofi-Aventis) and Merck while at Cornell and participated in cutting-edge translational clinical trials at leading academic centers. As National Institute of Health-Medical Scientist Training Program scholarship recipient, Dr. Keyoung received both his Medical Doctorate and Doctor of Philosophy degrees in Neuroscience and Neurology from Cornell University Weill Medical College and Memorial Sloan Kettering Cancer Center. Dr. Keyoung has over 35 articles, book chapters and presentations in publications such as Nature Biotechnology and Nature Medicine. Dr. Keyoung has served on the Board of Directors at New York County Medical Society and Board of Overseers at the Cornell University-Weill Medical College in New York and currently serves on the boards of private biopharma companies and organizations in the U.S. and in Asia. Tania Fernandez, Director, Burrill & Company. tfernandez@b-c.com Dr. Fernandez has more than 15 years of experience in the fields of oncology and molecular biology. She secured her doctorate at the Cancer Research Institute, India, having been awarded the Indo-U.S. scholarship from the National Institutes of Health (NIH). She won the Young Scientist Award and the most outstanding doctoral thesis award at Bombay University. She previously gained operational experience at Hoechst Pharmaceuticals, Mumbai, India. After completing her doctorate, she specialized in the fields of protein chemistry, protein delivery systems, and genetic engineering at the College of Medicine, Texas A&M University. In 1999, she joined the National Cancer Institute at the National Institutes of Health as a post-doctoral associate and was appointed staff scientist in 2000. Her work at the NIH resulted in two awards for excellence in biomedical research. Her research has been published in top scientific journals and she has been an invited speaker at national and international conferences. She completed courses in biotech startups for Scientists and Technology Transfer while at the NIH. She is an active member of the National Institutes of Health BioScience Business Interest group, The NIH Stem Cell Group, the Women in Bio group and the Women’s Technology Cluster (now Astia) where she assists with mentoring biotech companies and evaluating them. Stephanie Marrus, Director, Entrepreneurship Center at UCSF Office of Innovation, Technology and Alliances. Stephanie.Marrus@ucsf.edu Stephanie Marrus is Director of the Entrepreneurship Center at UCSF and is responsible for delivering programs and courses enabling scientists and clinicians to create entrepreneurial ventures based on UCSF technologies. She leverages her participation in the Silicon Valley ecosystem to attract resources and state-of-the-art entrepreneurship thought to the UCSF campus. In the short period of time she has been at UCSF, she has created a vibrant community of entrepreneurial focus on campus. During a 25-year plus career, she has been involved as a corporate executive, business consultant and mentor with hundreds of companies in science- and technology-based industries, many with their technological roots at MIT, Harvard, the University of California and Stanford. Her consulting clients have included venture capitalists, CEOs, National Science Foundation grantees and foreign government entities. In addition to her business career, she served as Deputy Secretary of Economic Affairs for a Massachusetts governor where she took the lead on economic development and business policy. She has been President of a medical research foundation and serves on the Advisory Board of a social venture startup accelerator. She has been a guest lecturer at Stanford University and UC Berkeley. Her academic titles have included Faculty in the Center for Entrepreneurship in Technology at UC Berkeley, Entrepreneur-in-Residence at the Haas School of Business, UC Berkeley; Adjunct Professor, St. Petersburg State University Graduate School of Management, Russia; and Entrepreneur-in-Residence, King Abdullah University of Science and Technology, Jeddah, Saudi Arabia. She holds an MBA from the Wharton School, University of Pennsylvania, an MA from Columbia University and an AB from Cornell University. Teaching Assistant Kyra Davis, Program Manager, Entrepreneurship Center at UCSF, Office of Innovation, Technology and Alliances. Kyra.davis@ucsf.edu, 415 502 1612 Kyra graduated from UC Berkeley in 2008 and earned a Masters in Management with honors from the London School of Economics with a focus on innovation. In-between she cofounded a startup enterprise working with indigenous weavers in Southern Chile, raised seed funding and managed an international team. She was selected to participate in the Chilean government entrepreneurship program, Startup Chile, and spent time living in Chile.