Key Tips for Building a Successful Life Sciences Company

Starting a company in the life sciences sector comes with its unique set of challenges and learning opportunities. From establishing a solid foundation built on a strong business case and clear legal documentation to effectively engaging your investor base, each step of the formation process requires careful consideration and strategic planning. 

Below are key insights to help founders prepare for the hurdles they may face and build a successful company: 

1. Making Your Case. Identify an unmet need with significant market potential. Understanding the global market and establishing a viable business model are as important as the technical aspects of your potential product or service. Investors look for competitive advantages, so, in addition to appropriate IP protections, a well-articulated business case can significantly enhance your company's attractiveness to potential investors. 
2. Setting Up Shop. Choosing where to incorporate your business is a critical early step. Many new businesses prefer to incorporate in British Columbia or Alberta due to the flexibility offered by those corporate statutes. That said, deciding where to incorporate is nuanced, and another Canadian jurisdiction may ultimately be a better option depending on your specific business needs. 
3. Retaining Top Talent. Culture and effective management are key to success. Incentivizing founders and employees is vital for your company’s growth and stability. Issuing shares and options, with appropriate vesting and reverse vesting, is an important tool generally used to align interests. Legal guidance on timing, purchase price and equity plans can help companies provide these benefits in a tax-efficient manner.
4. Keeping the Peace. Disagreements among founders can pose significant challenges to an emerging company. It’s essential to identify clear roles and responsibilities at the outset and have appropriate legal documentation, such as shareholder agreements, to manage potential conflicts and outline the process for resolving disputes.
5. Keeping Investors Invested. Building relationships with potential investors early on helps build trust and transparency that can significantly influence their decision to support your company. Frequent touchpoints at key milestones and market inflections can help keep investors and potential investors engaged in the company’s progress and help founders get the most out of their investor relationships. 

Have more than five minutes? Watch our recent Blakes Breakfast Speaking Series on this topic presented by Life Sciences British Columbia or contact any member of our Life Sciences group to learn more.