The Road to Commercialization: Do Life Science Incubators Deliver on Their Promise?

By Dennis Ford, Founder & CEO, LSN

Providing shared space, services, equipment, and expertise to budget-conscious scientist-entrepreneurs who are looking to prove a hypothesis and launch a company is the mission of life science incubators. And they have helped many start-ups.

However, increasingly, scientist-entrepreneurs are disappointed with what they’re finding. LSN hears a lot of complaints because we are in dialogue with a lot of the firms that populate these incubators. They acknowledge that incubators are less expensive than going it alone. Still, they say the lab space is too expensive, the promise of seeding seasoned players who can augment the founding team often goes unfulfilled, and there’s little to no tactical fundraising support.

The last point is particularly important since the life science industry is poised at the entryway of a new golden age. However, this advancement will not happen without capital. The lack of fundraising support will stymie not only the technology of individual companies but also the growth of the industry.

“Packaging” a company is a core function that I-Banks and underwriters perform when preparing a firm for an IPO. They spend many months grooming and coaching the fundraising executive team, getting the story straight, developing the brand and message, and creating professional marketing collateral in order to have a successful road show. These key elements have not yet been incorporated into early stage fundraising, despite an obvious and compelling need to raise capital.

In addition, although many incubators profess to have strategic partner connections, in reality, these connections can fund only a limited number of opportunities.

Incubators are largely out of synch with new fundraising best practices. What incubators offer from a marketing perspective is “pie in the sky” strategy and “perfect pitch” role-playing scenarios, leaving the scientist-entrepreneurs generally clueless as to how to prepare for raising capital and unprepared for the reality of connecting with a partner in the marketplace. Everybody understands their marching orders, but hardly anybody has been given the training and tools to carry out the mission. LSN calls this void “the last three feet,” which involves understanding how to put a tactical fundraising campaign together that enables the vetting of target investor fits, meeting these investors, and securing allocations.

Of course, it’s easy to criticize and point out flaws, and most of the senior staff at the incubators I am familiar with are working overtime to improve overall efficiencies. The incubator executives genuinely want to help commercialize the technology of their constituents. And no one disagrees that there is more to do and a need for more compelling programs to facilitate commercialization. However, to have a profound impact, successful incubators must focus on tactical programs to help the scientist-entrepreneurs navigate “the last three feet” to get their products to market.