Marc Beer, Co-founder and CEO of Renovia, Inc., Shares Expert Advice on Funding Your Business
As CEO and co-founder of Renovia, Inc., Marc Beer routinely secures funding for the testing and development of new products. Over the last 25 years, he has also held leadership positions in a variety of companies and foundations.
Beer is no stranger to spearheading successful funding efforts. In this article, he’ll share his best advice on funding a business of your own.
Funding is often the first hurdle when it comes to building a business. It’s the reason some aspiring entrepreneurs stumble right out of the gate. With Beer’s tips, you’ll soar over the funding hurdle and build a profitable business.
About Marc Beer
Marc Beer’s career spans more than 25 years in the development and commercialization of biotechnology, pharmaceuticals, devices, and diagnostics. In August 2016, Beer founded Renovia, Inc. with his partners Ramon Iglesias, MD and Yolanda Lorie.
Beer holds a BS in Business from Miami University. After college, he worked in various sales and marketing positions at Abbott Laboratories and Genzyme. He was eventually promoted to the Vice President of Global Marketing at Genzyme. There, Beer helped launch gene-based applications to treat a range of rare disorders around the globe.
In April 2000, Beer became the founding CEO of ViaCell. Under his leadership, the company rapidly expanded and was eventually acquired by PerkinElmer. Beer then served as the CEO of Aegerion Pharmaceuticals, a biopharmaceutical company dedicated to innovative therapies for patients with rare diseases.
Beer has also held leadership positions at Erytech Pharma, Good Start Genetics, Inc., and OvaScience, which specializes in treatment options for infertility. He is the Founding Chairman of the Board, chairman of the compensation committee, and member of the audit committee of Minerva Neurosciences, Inc. Beer is also a member of the board of directors of the Joe Andruzzi Cancer Foundation.
About Renovia, Inc.
Renovia, Inc. is a women’s health organization devoted to cost-effective treatment for pelvic floor disorders, which affect an estimated 250 million women. The innovative company works to offer improved products for first-line diagnosis and treatment of these disorders.
Marc Beer intends to spearhead the company’s development by blending innovative and proprietary sensory technologies with a digital health platform. Patient-based app technology and data management provide valuable information that can produce new treatment options.
Renovia’s first product, Leva, was approved by the Food and Drug Administration (FDA) in 2018. Beer obtained funding from the Longwood Fund, an investing group focused on health care issues. Series B funding was led by the The Perceptive Advisers of New York and Ascension Ventures of Missouri. Four Renovia products were developed and tested with this funding.
Tips on Funding Your Business from Marc Beer
Funding your first business venture may seem intimidating. If you know where to look, however, the number of available funding sources may surprise you.
Read on for Beer’s advice on the many funding options to consider.
First Step: Create Your Business Plan
Before you dive into funding your business, take the time to complete a thorough business plan. A business plan should include an executive summary (what your business does, what market need it solves, what sets your business apart), a company overview, industry analysis, competitive analysis, and a plan for marketing, operations, and finances.
It may sound like a lot of work, but no one is going to invest in your business if you don’t have a plan. A plan will also help you determine how much funding you need to secure.
Beer points out that a good business plan provides evidence that your business will likely succeed. It demonstrates how you expect to earn money to repay your investors.
Put in the work ahead of time, and your funding efforts — and the business itself — will be far more successful.
Personal Funds, Friends, and Family
With your business plan completed, you now have a general idea of how much money you’ll need to get your business up and running.
Start by looking at your own accounts. The more you fund yourself, the less you’ll have to worry about being dependent on others. Additionally, showing that you have a vested interest in your business makes investors more likely to chip in.
Consider your savings, lines of credit, and credit cards. Of course, Beer cautions, it’s important to use credit cards wisely. You don’t want to go into debt or irreparably damage your credit score.
You can also turn to friends and family. Use your business plan to indicate that you’re not asking for a handout; you’re looking for investments in a legitimate and well-thought-out business idea.
Once you’ve gathered as much money from these sources as you can, it’s time to expand your funding efforts.
Does your local area have a small business development center? If you’re unsure, try looking at a local chamber of commerce or a nearby university. Additionally, the Small Business Administration has over 60 locations nationwide.
These local organizations can connect you with other entrepreneurs and provide networking opportunities. Often, these organizations can also help you apply for local loans and find effective ways to fund your business.
If you’re unable to secure loans from a traditional financial institution and if your business meets government standards for your industry, you may qualify for a loan directly from the Small Business Administration.
Crowdfunding campaigns enable groups of people to donate varying amounts of money to a cause or idea they’d like to support.
To begin, you create a campaign and a target amount of money you’d like to raise. You can also provide incentives for people who contribute, such as T-shirts or the ability to pay in advance for future delivery of your product.
Crowdfunding campaigns require marketing your product. This may be a profitable route if you have a significant social media following already, or if you’re confident that your product/service will fill a high-demand gap in the market.
Beer explains that before going the crowdfunding route, you should carefully read the contract. Some sites won’t allow you to access the money until you’ve met your goal.
Another option is to trade stock in your company for money from investors. You won’t incur debt, and moving forward you can leverage the investor’s network and contacts. However, you will be giving up a degree of control and ownership of your business.
Alternatively, you can exchange services for capital. For instance, a tech company might arrange to provide technical support for office tenants in exchange for free office space. Consider what you need and what you have to offer. You may be able to come up with creative ways to cut costs.
If your business lacks collateral, says Marc Beer, it may be difficult to secure a traditional bank loan. Rather than filling out extensive paperwork that’s likely to be denied, you may choose to pursue a micro-loan.
Some micro-lenders cater to entrepreneurs looking to fund a new business. They have a more flexible underwriting process and can provide quick capital. Interest rates may be higher than interest on a bank loan, however.
Traditional Business Loans
Of course, you can also go the traditional route and pursue a bank loan that will provide even more opportunities for growth. For a bank loan, you’ll need a way to prove that your business can be profitable.
The approval process is lengthy, and you will also need a solid credit score. However, bank loans are the best way to procure a large amount of money.
Angel investors are individuals looking to invest in new businesses or business ideas that they find promising. Usually, you’re more likely to receive funding from angel investors once your business is up and running successfully.
However, you can always contact angel investors early on. If they aren’t interested immediately, they may become interested once your business develops a positive track record.
Venture capitalists invest money from their clients in companies that they believe can provide a high return on investment relatively quickly. When working with either angel investors or venture capitalists, you’ll need a solid exit strategy. They may expect to see a return on their investment in a set window of time.
You will also need a very thorough business plan. While angel investors may invest upwards of $10,000, venture capitalists can make investments in the $1 million range. People will not invest these large sums of money unless your plan is carefully compiled and rock-solid.
Beer advises that the best way to meet venture capitalist is through your network of other entrepreneurs. If your contacts are limited, visit the National Venture Capital Association’s website. Connecting with a stranger may be challenging, but the payoffs for your business will be huge.
Finally, Beer says, your 401(k) may come in handy. With the latest tax code, you can use your savings without penalty under certain conditions.
Following the correct steps is essential and can be complicated. It’s wise to consult with someone who has experience building a C corporation and understands the best retirement plan to select for rolling over assets.
Again, having a solid business plan is essential here. You should be confident that your business can succeed before taking a risk like investing your savings.
Finances don’t have to be an insurmountable obstacle in starting your business. Create a solid plan, then weigh the benefits and drawbacks of the many funding sources available to you.
With so many options, you’ll hopefully find a few that are right for you and your business. The process may be long, but it’s also worthwhile. As Marc Beer says, once you’ve secured the money you need, you can get to work and live your dream.
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