We fund some of the nation’s earliest and brightest innovators and entrepreneurs—university students dedicating their time to inventing something new and bringing it to market in order to effect worthwhile social change. This is not an easy proposition. Being an entrepreneur is hard enough in and of itself, let alone doing it as a student who is trying to get a degree at the same time, has no entrepreneurial experience, and is trying to perfect complex new technology, all with the goal of helping people and the planet.
Recently, members of 13 E-Teams we’ve funded traveled to Cambridge, Massachusetts to get venture development training intended to help with all this. We asked students about the challenges they’re facing as they try to develop and commercialize their products.
1. Intellectual Property
Every student needs to understand her or his school’s Intellectual Property policy (assuming it has one). If you’ve invented something of real value while in school, it’s doubly important. You need to understand your rights and obligations: unlike faculty and graduate researchers, whose contractual relationships with an institution are usually quite formalized, undergraduates and masters students aren’t generally regarded as being employed by their university in the traditional sense. Accordingly, student-generated IP can lie outside the boundaries and can raise a unique set of issues about ownership.
Our advice: Learn your school’s IP policy. There’s a lack of consensus among institutions right now on how to manage IP generated by undergraduates; policies vary. Finding out now can help minimize conflicts down the road.
2. Perfecting the Product
E-Teams typically have complex science behind their inventions. Having a great idea but not knowing exactly how to execute on it is a challenge a lot of teams face. Team members from Spinthesis, a North Dakota State University startup, found that perfecting their spider silk replicating technology was one of their biggest challenges. Team member Brad Hoffmann said, “A lot of it is the bio-based materials, so jumping into the biological aspect of everything was the biggest challenge. We’re so technically focused that we don’t have that knowledge. It was actually a really steep learning curve.”
Our advice: E-Teams can leverage their PIs, cohort peers, and other mentors to work through technology challenges.
3. Balancing School with Venture
Being an entrepreneur is a time-intensive job, bordering on a life-consuming obsession. Most young entrepreneurs are working on their innovations on top of finishing school, so it’s no surprise that balancing the two is a big challenge. For Mary Dwyer and Anushree Sreedhar, leaders of a team from Cooper Union that created a small, fire extinguishing ball called SEAL, they found that a rigorous course load has them struggling to find time to work on their invention.
Our advice: We always point to Covey’s Time Management matrix, which helps entrepreneurs identify what’s urgent and what’s not. Prioritizing is key! Remember, hundreds of E-Teams before you have found a way to make it work.
4. Finding the Right Partners
All businesses need to secure the right partners, like manufacturers, suppliers, or joint technology developers. But alignment between company and partner doesn’t always exist.
A team called cerVIA from Columbia has found this out. In trying to develop an imaging tool for low-income countries that increases the accuracy of cervical cancer screenings, Olachi Oleru of cerVIA says that in their search for a manufacturing partner: “Even though we have a very clear idea of what we want the product to look like and what we want it to do, partnering with a bigger manufacturing firm is the best thing for us to do with so little capital. But they want to push their idea onto our product. It’s hard to keep the integrity of it.”
Our advice: Do extensive due diligence on partners to identify one where there’s potential for mutual benefit. Both sides want to gain as much as possible while giving up as little as possible. It’s up to the team to decide what’s reasonable and what’s not.
5. Getting Funding
No surprise here—a major challenge E-Teams face is getting funding. This manifests itself in two
ways: 1) getting enough pre-seed funding to support prototype development and the earliest stages of venture development, and 2) bridging the gap between fledgling venture and one pulling in significant angel or VC investment dollars.
Many of our teams testify that before they found us, they couldn’t find enough funding to make pursuing the idea worthwhile. That was the case for Blu Horizon from the University of Puerto Rico Mayaguez, led by Kevin Olavarría and Abimelec Mercado. Their product, Anani, measures water usage in households and delivers the data to customers in an easily digestible format. Finding good funding is hard for teams, especially in Puerto Rico. Using the Stage 1 E-Team grant money, Kevin and Abimelec traveled to Cambridge to work on market discovery—finding the best market for Anani.
Our advice: Securing major investment money to propel a venture forward remains a big challenge for E-Teams or any other entrepreneur. As you move beyond grants, it’s important to line up milestone objectives with funder expectations. Pursue angel investment and early-stage venture capital when there’s a clear value proposition, evidence of product-market fit, and an initial, vetted business model.