Situation
An MIT professor asked Enrique to help with one of his colleagues, who had started an MIT-spinout company that was emerging from the lab and needed to fine-tune its go-to-market financials and business scenarios to raise money.
Challenge
The company’s innovative platform technology invented at MIT enables novel life science R&D to accelerate basic research and drug discovery. The company’s products and services empower the development of improved therapeutics faster, with the opportunity to expand sales across customer types to facilitate widespread adoption. The company asked for advice on positioning its business to be attractive to venture investors.
Approach
Enrique engaged with the company’s co-founders (the CEO and the MIT Professor who invented the technology) and worked with the CFO, and CMO to refine the company’s business model to clearly show its virtuous cycle from novel research that leads to customized assays that become high-margin catalog consumables for direct sales to customers or are integrated into high-value services for clients. We developed a simple financial model showing the business’s high-margin, high-growth potential, which could be achieved through synergy between catalog products (>70% gross margins) and differentiated services ( >50% gross margins with automation and increased volume). We built models for ramping up revenue by customer type and sales channel (field reps, outbound and inbound marketing, and distribution) and sensitivity views based on different levels of market penetration.
Results
These efforts were well received by investors and were instrumental in the company receiving a $4.5MM Series A investment. We also introduced an investor who invested $3MM in a subsequent convertible note for the company’s Series B financing round.