|transkript 2.2024 CATALYSER

Life Science Startup Magazine

No. 2/2024

AMELIE REIGL

STORYTELLING FOR SUCCESS INVESTMENT

FINANCING IN ECONOMICALLY CHALLENGING TIMES

MAxL – MUNICH ACCELERATOR LIFE SCIENCES & MEDICINE Perfect conditions for successful start-ups

P Start-up incubator for life sciences and medicine of the future P State-of-the-art laboratory infrastructure, co-working and community spaces P Tailored incubation process & training programs P Coaching and mentoring from experienced entrepreneurs and experts P Partnerships with industry key players and strategic partners

www.maxl-biotech.org

CATALYSER 2.2024 I 3

CONTENTS

3

EDITORIAL

4 J UST SOME CRAZY THOUGHTS

Patrick Rose reveals three moonshot projects worth investing

Dear readers, Dear startup enthusiasts, We are delighted to share the second issue of our Catalyser magazine with you – the navigator through the world of life science startups and innovations with all their challenges and triumphs that make entrepreneurship so fascinating.

6

SHARE WHAT YOU DO

Barbara Stegmann: Successful founder and personal brand

9 STORYTELLING FOR SUCCESS

Our inspiring hero story by Barbara Stegmann is a lesson in perseverance and demonstrates how important it is to build a strong personal brand to succeed in today's business world. A particularly significant hurdle for academic startups in current times of economic uncertainty is to receive funding. Grit Zahn and Marco Janezic shed light on fundraising strategies and provide insights on how startups can secure investments even in a recession. With a twinkle, we demystify "investor jargon" in this context and explain the terms that every founder should know.

Why communication is an important key to success for startups

11 CHANGING DIRECTION

When and how to pivot your business successfully

In the startup industry, communication as well as flexibility are important components on the path to success. Amelie Reigl, expert in science communication, shares her insights and tips on how startups can effectively convey their key messages. With Siro Gottardi, we discuss when and how a strategic realignment makes sense, and why a pivot can often be intimidating but also opens new opportunities.

Pictures: © Life Science Factory; living brain GmbH

In this issue, we also dare to think big: Patrick Rose discusses moonshot projects that might have the potential to change our future. Additionally, we get an exclusive insight into the prototyping area of the Life Science Factory, which reveals the creativity and innovation flourishing in the startup hub on-site.

Join us on this journey full of insights for life science startups focused on the German market and inspiration for your own projects. We hope you enjoy this issue of CATALYSER and, as always, we look forward to your feedback.

Yours sincerely, Irina Reimer and Svenja Hodel

13 BUILD IT YOURSELF

Advantages of prototyping for life science startups

15 GIMME SHELTER

Financing in economically challenging times

17 INVESTOR JARGON FOR FOUNDERS

Understanding frequently used terms of investors

IMPRINT Adress: Life Science Factory Management GmbH, Annastr. 27, 37075 Göttingen; E-Mail: info@lifescience-factory.de; Website: catalyser.de; Publisher: Svenja Hodel, Irina Reimer; Editors: Frau Wenk GmbH, BIOCOM Interrelations GmbH; Idea and concept: Life Science Factory Management GmbH, Frau Wenk GmbH; Design: Michaela Reblin; Printed by: Königsdruck, Berlin; Cover picture: © dieWissenschaftlerin

4 I

CATALYSER 2.2024

JUST SOME CRAZY THOUGHTS INNOVATION SPRIND stands for the Federal Agency for Disruptive Innovation. But what exactly is disruptive innovation?

And why do we need it?

Patrick Rose is a fan of Star Trek. One of the projects that he would like to realise is inspired by the franchise - a space elevator

himself as a fan of Star Trek and the Marvel films, sees courage as a factor that is in short supply in Germany. “Germans often lack the grit and the passion to think big about something big and crazy.

BACKROUND

ABOUT PATRICK ROSE Since November 2022, Patrick Rose has been Innovation Manager at SPRIND. He celebrates unique perspectives and distinct approaches that challenge conventional thinking, he says about himself. Before taking his position at SPRIND, Rose was Chief Scientist at ONR Global and gained many years of experience as an Adjunct Assistant Professor in the Department of Epidemiology and Public Health at the University of Maryland School of Medicine.

The sentiment is very different in other countries, such as the USA. Here, people are working on really crazy ideas.” He adds, “If you ask postdocs in the Baltic countries, for example, which one of them has ever thought about founding their own company, almost everyone raises their arm.” In Germany, on the other hand, hardly anyone would come forward. Rose finds this very regrettable because there is more than enough potential. Germans are too afraid to make mistakes. Most academics in the life sciences would rather stay at university than try out new things.

Crazy and big ideas However, by putting its approach out there, the Federal Agency wants to foster a new way of thinking - crazy and big. SPRIND

Picture: © Felix Adler

How about a 300-metre-high wind turbine that harvests wind at high altitudes and converts it into electrical energy? Does that sound crazy? It’s not at all, says Patrick Rose, Innovation Manager at SPRIND. The Federal Agency is on the lookout for exactly those types of absurd moonshot ideas.

Rose and his team offer people, who would like to realise their ideas, a home and a space to try things out and show that even the supposedly impossible is possible. The aim is to create products, services, and systems that noticeably and sustainably improve everyone’s lives.

“There are no stupid ideas,” says Patrick Rose. “It’s quite the opposite. The more unusual a technology or vision of an application seems, the more likely we are to give it a go! There are no limits.” The aim is to advance technologies that nobody knows about yet but nobody will be able to live without.

The organisation thinks holistically and creates an entrepreneurial environment where it is possible to take risks and be courageous. Patrick Rose, who describes

CATALYSER 2.2024 I 5

Pictures: © stock.adobe.com/Radomir Jovanovic; stock.adobe.com/Patrick Helmholz; stock.adobe.com/Xavier; SPRIND

THESE ARE THREE PROJECTS THAT SPRIND WOULD SUPPORT IMMEDIATELY, SAYS PATRICK ROSE!

DNA AS A DATA STORE

BIOLOGICAL QUANTUM COMPUTER

STAR TREK REPLICATOR OF THE 1 ST GENERATION

“It may sound like utopia, but it’s not.

What the USB stick and the hard drive can do, our DNA can do at least just as well: store a huge amount of data and information externally. As the storage medium of the future, DNA offers a huge field that we believe should be explored as a matter of urgency. After decoding DNA more than 20 years ago, an algorithm can translate information into the nucleic bases that make up our DNA. These short DNA strands can then be put together in the laboratory to easily retrieve the data they contain. It is also plausible that we will use DNA to build smaller organic chips for computers.”

“Migratory birds use the Earth’s magnetic field to navigate. They have a magnetoreception sensor in their eyes that works independently of light. When flying, birds use this sensor to determine the inclination angle of the lines of the Earth’s magnetic field and thus always know exactly where they need to fly. The sensor functions like a magnetic compass. The entire process takes place at a quantum level. It would be possible to build a biological quantum computer using this mechanism as a model.

It can be demonstrated mathematically that quantum computers work much faster than a classic computer for all problems that can be solved by trial and error.”

“Who hasn’t seen those scenes from Star Trek when Captain Kirk goes to one of the replicator terminals on the Starship Enterprise and orders a cup of tea. In the science fiction series, the replicator is designed so that food and other things can be replicated simply by command. This is a project that we would like to realise and in which we are willing to invest money. So we really want to build the 1st generation replicator. The 3D printers are the first preliminary stage of the replicators. But it will be even more exciting if the replicator works assembles and produces objects at a molecular level.”

offers financial support and a network for optimising and finalising prototypes. If the SPRIND experts deem a project worthy of funding, it receives between four and fifteen million euros per year for further development.

“In the case of funding, we often set up project subsidiaries. We also finance projects via our SPRIND challenges with between €500,000 and €3 million. The financing is provided here as a pre-commercial contract for research and development services,” explains Patrick Rose.

Inspired by the latest Marvel film, Patrick Rose is thinking about how it might be possible to build a space elevator. But are there any other examples of projects that would immediately inspire him and the other experts at SPRIND? ·

The first challenge: Develop an end-to-end prototype that processes various carbonaceous waste streams into new products as a continuous bioproduction process

6 I

CATALYSER 2.2024

SHARE WHAT YOU DO HERO STORY Barbara Stegmann is CEO and co-founder of living brain. During an interview with Catalyser, she talks about her first steps in marketing, the challenges of the German healthcare market and the time when she almost lost her passion for her work.

CATALYSER. Do you remember the moment you had the idea to establish living brain?

Stegmann. Actually, there was no specific moment. I was studying psychology and met my future co-founder Julian during my time at the university. Julian suffered from severe epilepsy, he had two or three epileptic seizures every day and was taking everything you could get on the interna-

And he was lucky: he never experienced any of these impairments.

But I found it astonishing that his doctors said that although there were treatment methods, they didn't believe in them.

CATALYSER. What happened next?

Barbara Stegmann is one of the industry's most recognised voices on LinkedIn

tional market to stop them. None of it really helped. In the end, his only option was to have the part of his brain, that caused the seizures, surgically removed. He asked his doctors: "What are the risks?" His doctors replied that he could develop problems with his memory and that this could lead to massive cognitive impairment, such as problems with his attention, memory and concentration.

Then Julian asked: "If that happens, what do I do? What therapies are available?" And his doctors replied: "We have a few exercises with pen and paper, we have some things on the computer, but we don't really trust the methods."

Julian had the operation because it was the only way for him to be free of seizures.

Stegmann. At that time, Julian and I thought: "What is the problem?" Since cognition is a branch of psychology, we thought we could turn the topic into a student research project to impress our professors. So, we took a closer look. The therapy methods date back to the 1950s. They were never adapted, just digitised. What was striking was the huge problem with knowledge transfer: the exercises are so abstract that our brains are unable to apply them to everyday life. It's like trying to teach a child how to swim: At best, you allow them to go into the pool with floaties, but you don't give them a book and say, "Read this, then you'll know how to swim". That's when we started to come up with a concept. And ultimately, we decided to go for a VR solution.

CATALYSER. After founding your company, you probably asked yourself the question "How do I make myself and my company visible?". Do you still remember your initial ideas?

Stegmann. For me, awareness wasn't as important at the beginning as meeting the right people. Initially, we focused on going to startup events, healthcare and life science events. We specifically approached people who support healthcare startups.

Picture: © living brain GmbH

One simple formula applies to every newly founded company: If you want to be successful, you need to be recognised and heard. There are various ways to achieve this, whether it's press and public relations work, networking and participation in relevant events or cooperations with established companies, which can help startups increase their reach, which is still limited at the beginning.

In April 2019, Barbara Stegmann and Julian Specht founded living brain, a company that specialises in the rehabilitation of patients following an accident or illness. Based on innovative technologies, the company has developed a new treatment method that can be used anytime and anywhere.

To achieve this, living brain combines psychological learning strategies, therapeutic science and virtual reality.

Personal branding was an important piece of the puzzle for living brain when it came to raising the company's profile and increasing its reach. In this interview, Barbara Stegmann talks about her experiences on the way to creating herself as a brand and marketing herself as a successful founder.

CATALYSER 2.2024 I 7

First of all, it was important for us to build up a network with the right people. Making the product or the idea more widely known was not the main focus at the time.

At the time, I thought that we had to establish something solid before we could even start talking about our product. I always had the principle "Don't overpromise and underdeliver" in mind. After all, how disappointed will someone be if I promise them something and then can't deliver on it because my startup and my product aren't quite ready yet?

That's why it was all about building a network with the right people at first.

Picture: © living brain GmbH

CATALYSER. The life science market is considered complex. As a prospective CEO, what were the challenges for you in gaining a foothold in this market?

Stegmann. The healthcare market has completely different rules compared to other markets. It is heavily regulated - by many laws, by standards that you have to comply with, by requirements, regulations, etc. It is also very complex due to the different reimbursement methods that exist in Germany. After all, these are things that you can still read up on. But there are also things that you have to learn through experience along the way, for example the topic of reimbursement values: Why is it important to fit into a certain reimbursement code? What are the unwritten rules of the market? Alternatively, consider the topic of clinical trials, which are expensive, time-consuming and risky. One thing is clear: in the healthcare sector, startups first have to survive a very long "valley of death". Both the number of risks and the capital requirements of healthcare companies are disproportionately higher compared to many other markets.

Moreover, the healthcare market is relatively conservative. Sometimes, this makes it harder for young people to gain a foothold.

As a young CEO, you have to learn quickly, understand quickly and implement quickly.

It's not enough if you can do it in theory; you have to be able to apply it directly to your company.

CATALYSER. You mention that the healthcare market is conservative. You have now

introduced a new product and a technology-supported therapy method to this market. That was probably another special challenge, wasn't it?

Stegmann. The advantage is that if you are one of the first, you can still surprise people and establish standards because no one has done it before. The disadvantage is that many people are very skeptical, especially in Germany. There was also scepticism about virtual reality. Therefore, we conducted an acceptance study with living brain at the beginning, because we had often heard: "Older people? Stroke patients? As if they can use VR!" And we were told this by doctors as well as neuropsychologists or occupational therapists and almost even more frequently by the relatives of those affected. Whereas those affected were often totally motivated and said: "I can do it!”

For the acceptance study, we asked: Is acceptance among older people with a stroke worse or better than among people of the same age who have not had a stroke?

And is acceptance generally positive or rather negative?

Our study showed that acceptance is positive for both groups. Usability and user experience were positive for both stroke patients and healthy people of the same age.

We have learned for ourselves that many reservations can be anticipated if you have evidence. Emotional selling, i.e. convincing people on an emotional level, works for patients and relatives, but when it comes to decision-makers, for example in hospitals

or insurance companies, you need much evidence in clear terms.

CATALYSER. As an entrepreneur, you have certainly also had to put up with setbacks.

What moments of failure do you recall?

Stegmann. There were certainly a few moments when things didn't go so well, or at least not as we had imagined. Nevertheless, I wouldn't say that there were moments during which we ultimately failed. There were moments when we went the extra mile to learn something new and develop our product further.

CATALYSER. Can you provide one or two specific examples?

Stegmann. For example, I remember a situation when we set up our quality management system. We did this completely in-house. You have to know that: As a medical device company, you need to have a certified quality management system in accordance with a specific standard. There are companies that employ entire departments for this and have external quality managers who do it for them. We decided to set this up completely in-house. And we did it without any of us ever having done it before, let alone knowing how it works.

It took us 18 months. That was a time when I realised that we had reached the limits of what we enjoy doing. This time really brought us closer together. But it was also a time when we asked ourselves:

Gamification in the healthcare sector: Living brain provides innovative support for rehabilita­ tion programmes

8 I

"What are we actually doing this for right now?". It was an enormous amount of work and complicated and non-transparent in many areas. That was a time when we said: "We'll be working extra hours and will learn something." You can't call it a failure, because we received the certificate the first time around, but it was definitely a very stressful process.

CATALYSER. Have situations like this had an impact on your personal branding strategy?

Stegmann. When it came to the quality management system and certification, I tried to talk about it publicly on social media. I tried to share my learnings, also because I realised that it is unusual to set up such a system without external help. I was then able to include this in my personal branding: a competence that I had acquired. As a result, I was able to talk more about it.

I have the impression that what I do and who I am has changed me as a person and how I communicate to the outside world over the years. Through my work in the company, I have acquired skills that I can share and that I can use to support other people, for example with tips, tricks and best practices.

CATALYSER. So you definitely see a difference between the strategies you used for personal branding in the beginning and the ones you are pursuing now, right?

Stegmann. Definitely. When I started out, personal branding was hardly an issue for me - perhaps also because I didn't think I knew enough back then to be able to share anything. I am convinced that I am not alone in this. I think there are a lot of people who say: "I don't share anything because I'm not sure if what I'm saying is important enough." Something has changed for me with regard to this in recent years.

However, I also have to say: I used to have reservations about marketing and personal branding because I always had the "American" version in my head, this overselling: claiming things that aren't true.

CATALYSER 2.2024

CATALYSER. And what does it look like today?

Stegmann. This initial feeling of aversion only subsided when we founded a GmbH in 2019 and asked ourselves: "How do we do marketing now?". I started to "label" both marketing and personal branding differently in my head. It's not about selling something to others, but about talking about the good we do: We can help people with our product. We are not selling hope, but a therapy that outperforms the current gold standard.

"When it comes to decision-makers, you need evidence, you always need it in cold print"

We are better than the therapy available on the market. So it is actually our obligation to talk about it because we are doing something good with it and because we need to reach the people who can benefit from us.

I am still developing my personal brand.

But even in that case, I said to myself: maybe I can help other people by sharing my expertise and best practices or maybe by talking about my insecurities. I think we all have a lot of thoughts, perspectives or even fears that we don't talk about because we're afraid that someone else will judge them. But we are certainly not alone in this.

CATALYSER. What impact does your personal branding have on potential investors?

Stegmann. Personal branding is not just about social media; it's also about being present at events, giving keynotes or talking on panels. If you have a good network, you will be invited to audiences like this. If you talk about it, you get invited more often, etc.

I have had the opportunity to meet some

of our investors at many events. Many only became aware of me when I was on a panel for the first time or because they had seen an interview or watched something and then came into contact with us.

One of our investors wrote to me on Linkedin: "Hey, I just happened to see your profile, I looked at a few things, I think it's pretty cool. I saw you're doing a fundraising round. What does it look like? Are you still looking for investors?"

Ultimately, personal branding is "just" an extension of your own network. I have to make sure that people know what I do because it might be relevant and interesting for them, and I can help them, or they can help me. Personal branding is therefore a form of "socialising" and networking, although you don't necessarily talk to anyone directly, but rather present yourself and show what you can do and who you are.

CATALYSER. Is there anything else you can share with aspiring founders and perhaps especially female CEOs from your wealth of experience?

Stegmann. Look for a network of other female founders and CEOs! There are some very cool ones in Germany, for example Encourage Ventures or Mission Female.

There are female founder networks in many cities. Have a look around, check it out! I've experienced for myself that you're treated differently when you're a woman in this position. In the beginning, I thought it was because of my skills. It didn't even occur to me that it was because of my gender. When I started talking to other female founders and other female managers and investors, I realised that the things that happened to me also happened to them. We still have to break down prejudices in our society.

What else I can recommend to founders: Find something you really love about what you do. There are bad times and there are always times that are challenging. It's at times like these that you need to find something to hold on to. Something that you love about it so much that you keep going. Whether it's the money or the team or the mission, the product, the problem or whatever: you have to love something about it, otherwise you won't finish it. ·

CATALYSER 2.2024 I 9

STORYTELLING FOR SUCCESS COMMUNICATION "If you let data speak for itself, that's science. If you collect data specifically to prove what you've already decided to prove, that's not science, that's marketing," inventor Tom DeMarco once said.

Picture: Mockup: stock.adobe.com/Deeplab, Screenshots Instagram und TikTok (Life Science Factory)

formation. But that's exactly what I try to do on Instagram and TikTok."

DeMarco sums up the dilemma as to why many scientists shy away from marketing and PR very well. Yet, for startups in particular, both are absolutely essential tools.

Amelie Reigl demonstrates how it can be done. Using the name @DieWissenschaftlerin, her videos on Instagram and TikTok reach almost half a million followers. She talks about the difference between soccer and science and raises the question of whether ‘Dry January’ really makes a difference.

"I would like to make science more visible. To do so, I talk about everything that affects or concerns me in any way. I want to show my life as a scientist and how diverse it is," says Amelie Reigl about the content she creates. " My videos don't require any prior knowledge and I aim for each video to stand on its own. This also includes not using technical terms. As a researcher, you are trained to speak as precisely as pos-

sible when using terminology and I really enjoy that. However, it is a real challenge to speak in simple terms without losing in-

Making the whole team visible Presenting scientific contexts as comprehensively and entertainingly as possible on social media - is this also the formula for success for startups in the science sector? Amelie Reigl certainly thinks so - however, she advises against an overly hasty approach. First of all, companies need a plan, a vision and a goal as to what they want to achieve with their communication. It is essential that the entire team is involved in the creative process: "It's not just me as the founder who represents the company, but the company as a whole. And that's why everyone should have a say in how they would like to present themselves on social media or not," explains Reigl. " Particularly when it comes to science, there's room for creativity. Many startups in

BACKROUND

ABOUT AMELIE REIGL Amelie Reigl is a biologist and is doing her PhD at the University of Würzburg. For her doctoral thesis, she is developing a human skin model that is intended to be used for testing purposes and should thus reduce animal testing. She is also one of the leading German-speaking content creators in the science sector using the name @dieWissenschaftlerin. Launched during the 2020 coronavirus pandemic, she now has a community of almost half a million followers on TikTok and Instagram. Reigl aims to make the everyday life of a scientist visible, offering up-close insights into research and simple explanatory videos to help people understand science. Her own startup TigerShark Science is already waiting to be launched after her doctoral thesis is completed and will be dedicated to the aforementioned skin model.

10 I

CATALYSER 2.2024

this field have great visual images based on their work that are ideal for social media.

However, I also often see companies who quite intentionally don't show their product, thus creating a certain level of curiosity."

Reigl also points out that no company should necessarily use all channels from Instagram to TikTok. Instead, it is important to choose according to the objectives and then appoint a person who is in charge of social media, who is allocated the necessary time and who enjoys being in front of the camera from time to time.

Use PR early on However, LinkedIn is a channel that definitely pays off in terms of business goals and being seen by potential partners, customers or investors. The business network is the common denominator on which startups, business and science are equally represented. Not only Amelie Reigl shares this opinion, but also Alexander Hüsing, founder and editor-in-chief of the specialised business publication deutsche-startups.de: "In addition to your own website and traditional PR work, LinkedIn is an extremely important vehicle for being noticed in the first place. Initially, it's not about posting daily, but simply about being visible on LinkedIn as a company and founding team by having your own page and providing the most important information."

According to Hüsing, startups cannot start too early with visibility on LinkedIn, just as they cannot start too early with traditional PR work. On the contrary: "I find it hard to understand when companies shy away from PR work even though they have already founded a GmbH and set up

name definitely belongs in the subject line as well as a direct salutation in the message. In other words, it shouldn't say 'Hello editorial team at deutsche-startups', but rather 'Hello Alexander'."

Amelie Reigl, biologist and content creator

a website. To anyone who does this, I can say: there are a hell of a lot of journalists out there who would like to learn as early as possible that there is a team of people working on a specific topic."

Don’t call it „Press Release“ Especially when sending press releases or pitches, however, you should integrate as much individuality as possible in order to stand out from the crowd. Otherwise, the emails could easily get lost in journalists' inboxes. "I often have emails in my inbox with the subject 'Press release', 'Press news' or 'New startup'. None of that works for me at all," explains Hüsing, adding: "Founders should ask themselves before each mailing: 'How does this email look when it ends up in the journalist's inbox?' It should then be tweaked if necessary. For me, the company

Using hidden gems Even in the founder's story, there are often hidden gems that can add individual value to your pitch. Be it the company's location, which is particularly relevant for the local press, or the fact that the founders got to know each other at university, or the team has known each other since childhood. Hüsing's tip: "Founders need to learn to take a look at their startup and their history from the outside. Otherwise, a certain degree of 'operational blindness' automatically sets in, so that they no longer notice the truly interesting aspects of their story. To prevent this, it also helps to talk to people outside the company about your own business and its history."

The bottom line: Become visible Long story short: science startups should always invest time in social media and PR work to attract the attention of potential customers, partners, investors and journalists.

The sooner they become visible, the better - but this should not lead to hasty decisions.

The following applies to both communication channels: there must be a clear plan of what the company wants to achieve in specific terms and how it wants to do this.

It is important to identify the rough diamonds in your own company story in order to stand out from the crowd and attract attention in both social networks and press relations. ·

BACKROUND

Alexander Hüsing has been working as a journalist for more than 25 years and specialises in new companies and founders. With deutsche-startups.de, he has been reporting daily on news from the German Internet startup scene since 2007. Interviews, portraits of individual startups and founders as well as market overviews of interesting segments supplement the daily news. Background information on investors and business angels as well as guest contributions from well-known founders and other Internet personalities complete the comprehensive range of information on German startups.

Alexander Hüsing, founder and chief editor deutsche-startups.de

Picture: © dieWissenschaftlerin; DS Media

ABOUT ALEXANDER HÜSING

CATALYSER 2.2024 I 11

CHANGING DIRECTION STRATEGY The road to business success is not always a straight path. Especially startups often need to make adjustments or even serious changes to their business model. This process is called a pivot. But what about the life sciences segment?

Are the rules different in this area?

entirely. In fact, various studies show that around 80 % of startups have to give up their business operations within the first three years.

Possible reasons for a pivot Besides insufficient observation of the market situation, there are other reasons for a pivot. These are: • a product expansion, • a completely new product, • the customisation of a product, • changes in the business model.

Siro Gottardi advises startups in the life sciences to always assess the market’s needs and adjust their business models accordingly

Picture: © Peak Spirit

More and more scientists are stepping away from typical careers in research to found a startup. However, not all of these entrepreneurs are successful with their young companies at the first attempt. Sometimes, they have to pivot, adapt, or even make extensive changes to their business model.

Which factors need to be considered?

Classification makes all the difference “In highly regulated areas of the life sciences, it may often take longer than ten years before a company can launch its product on the market,” says Siro Gottardi from the management consultancy Peak Spirit in an interview with Catalyser. Peak Spirit sup-

ports early-stage life science companies in market entry and remuneration, and works with more than 100 startups every year.

Regarding market entry, the life science sector differs greatly from other industries. It usually requires significantly more financing than startups in other sectors. This is because much more research is necessary in life sciences. “It is fundamentally important,” says Siro Gottardi, “that founders consider the market before and also during the ongoing operation of the company and obtain feedback from experts.” They should also set goals that can be quantified. If this does not work, it can be one of the reasons why a startup has to pivot in order not to fail

Changing direction - a game-changer Many of today’s successful companies have carried out a pivot in the past. By changing direction well prepared, they were able to give their business model a lasting boost in all cases. Examples include Apple and Nokia. The latter was once founded as a paper factory. Apple started as a small computer company under the leadership of Steve Jobs. At the time, the focus was

“Entrepreneurs should always inform themselves about the market’s needs and constantly think outside the box.”

12 I

8 IMPORTANT STEPS TO PIVOT YOUR BUSINESS SUCCESSFULLY Measure your success

Not insisting on a single vision These examples show that success does not depend on one particular vision.

Founders should be open to other opportunities and develop the original idea further. “Entrepreneurs should always inform themselves about the market’s needs and constantly think outside the box,” advises Gottardi. If a pivot does have to take place, good preparation is essential. “This includes analysing the market in detail and talking to experts,” says Gottardi. It is the only way to ensure that the pivot is successful in the long term.

Get the whole team on board It is essential to involve the team in the process. The team members must be given the opportunity to contribute their opinions and help shape the pivot transparently. The product should also be confirmed by the market in a way that fundamentally ensures usability by a significant target group. If this is not the case, according to the expert, it often becomes apparent that the market is too small, and the product cannot be successful.

Better to act sooner It is also essential that companies consider the possibility of a pivot as early as possible. Market validation should occur nine to twelve months before a new financing round. “Entrepreneurs are often not able to let go of their vision. It is much better to be honest with yourself and regularly track

8 7

Perfect timing: plan and prepare all departments

6 5

Learn and adapt

Look for established partners Once a pivot has been carried out and the company’s realignment has been finalised, young companies should join forces with established partners from the relevant life sciences sectors. This offers advantages for all parties involved. “Successful, estab-

BACKROUND

ABOUT SIRO GOTTARDI Siro Gottardi is Chief Executive Officer at Peak Spirit. He provides advisory and business coaching for entrepreneurs, executives and investors in health technology and medtech companies. His core topics are: Go-to-market strategies, revenue models, sales growth and organisational development/scaling.

Analyse competitors and differentiate

2 1

your KPIs so that you have enough time to change direction.”

Choose how to pivot

4 3

Know your target market and its pain points

Establish new goals

Identify the need and reason for pivoting

lished companies gain new impetus through collaboration with startups or learn about forward-looking innovations that benefit their KPIs. On the other hand, startups gain important insights through cooperation and often valuable tips or mentors who can coach the young company’s managers at various levels. Ultimately, the partnership may also offer financial benefits for a startup. This is because established partners often suggest further developing a product together or offer access to additional funding.”

However, it is essential not to miss the right time for a pivot. The market situation should be monitored and evaluated over the entire period of research and development.

This applies to the life sciences sector just as much as to all other sectors. Good preparation is just as necessary before a pivot as before founding a company. This is the only way to prevent a company that started promisingly suddenly ceasing to exist. ·

Picture: © Life Science Factory

on selling basic computer accessories. The founders quickly realised that the business model could not be scaled up. The pivot plan: Apple was to build its own brand. It now has cult status.

CATALYSER 2.2024

CATALYSER 2.2024 I 13

CNC milling machines, 3D printers, 3D scanners in use: Maker's Factory at the Life Science Factory in Göttingen

BUILD IT YOURSELF

Picture: © Life Science Factory

PROTOTYPING Venturing into the uncharted realms of research often necessitates tools that don't yet exist. This very conundrum is what the Maker's Factory at the Life Science Factory in Göttingen resolves.

Besides fully equipped lab space, a unique prototype workshop can be found at the Life Science Factory. It offers startups and entrepreneurs the swift and cost-effective production of customised aids essential for their research. Whether it's innovative tools, tactile prototypes, or even specific projects like a device for measuring water quality in developing countries, the possibilities are nearly limitless.

Does this sound unconventional? Indeed, the concept of this prototype workshop is quite singular, catering to a variety of applications such as: • Rapid Prototyping • Creation of tactile models • Ad hoc development of individualised tools To facilitate these diverse applications, the Maker's Factory boasts a high-tech

machine park focused on additive manufacturing, equipped with the latest CNC milling machines, 3D printers, 3D scanners, and even lasers for cutting.

Swift Realisation of Ideas Startups have the opportunity to rapidly develop and produce a prototype based on their idea. This allows for quick testing with subjects and gathering feedback from stakeholders. Iteration cycles are short, enabling prompt enhancements, while rapid prototyping also helps save costs and resources.

Creating tactile models is crucial not only for medtech startups but also for those in pharmaceutical development. In this way, processes can be made visible that are otherwise rather invisible because they happen ‘inside the body’. These models can be used by startups during pitches to

investors, with examples including a cell printed on a larger scale or a heart model with arterial and venous inflows, created using a 3D printer.

Sometimes startups reach a point where processes stall due to the lack of the right tool. In the Maker's Factory, tools of all shapes and sizes can be created ad hoc, with the 3D printer often being the method of choice.

Tool Handling for Everyone Should startup staff lack experience with machinery and tools, they can undertake an introductory course with Maximilian Bieker, the manager of the Maker's Factory. He is the point of contact for all young companies utilising the 300 square metre space and he also advises entrepreneurs on developmental issues.

14 I

CATALYSER 2.2024

– without feeling intrusive. For this, Digity developed a custom fitting methodology – the so-called Digity Size Wizard. The exoskeleton is designed to feel like a second skin while providing a secure grip.

"For some users, this is their first-ever experience in a workshop. I encourage everyone new to us to try out the machines and discover their technical affinity," the manager emphasises. "There's an opportunity for everyone to learn how to handle the tools in no time, whether it's a laser cutter or a 3D printer."

and close to the final product or just a preliminary model not yet fully refined.

"Every life science startup can benefit from the workshop," Maximilian Bieker highlights. The main pain points for young entrepreneurs are time and money. And this is precisely where the Maker's Factory steps in with its unique concept.

Empowering startups The Maker's Factory primarily offers entrepreneurs guidance on implementing things themselves in the open workshop.

It's about 'learning by doing' and at the same time about the community of diverse researchers who assist and exchange with each other, rather than just a service. "This often leads to new ideas," notes Bieker.

Startups also have access to countless forums and open-source resources for file research and template design.

Maker's Factory success stories Digity builds Artus exoskeleton The startup Digity, based at the Life Science Factory, focuses on automated processes and developments concerning the human hand. The startup has developed an exoskeleton named Artus, consisting of tactile elements to support the wearer's hand during work and protect against injuries – particularly to the finger joints

Shadowing and advising If development stalls, Maximilian Bieker offers his ‘shadowing’. This means he accompanies entrepreneurs for a day in their lab routine and afterwards provides constructive feedback, helping them optimise processes or rapidly develop and build essential tools using a 3D printer. This approach allows for quick and precise resolution of everyday work problems.

Startups can control the quality and speed of implementation themselves. In the case of prototypes, depending on the materials and technology used in development, the prototype can be of high quality

WaterScope develops rapid water testing The British company WaterScope also finds its base at the Life Science Factory. The startup addresses a particular issue in developing countries – the fact that one in ten people in the world lacks access to clean water. To combat this existential inequality, WaterScope has developed a specialised device for rapid testing of water quality in terms of bacterial density. The device is intuitive and can be easily used by anyone. In developing the measuring device, the startup relies on robust materials and machine learning, enabling automatic detection within eight hours of whether the drinking water is contaminated, for example, with E. coli bacteria. ·

Maximilian Bieker is the manager of the Maker's Factory. He hosts introductory courses for startups on the correct use of machines

Picture: © Rabbitz Film AG (Siemens); Life Science Factory

At the Maker's Factory, startups can quickly develop and produce a prototype that visualises their ideas

Disinfectant dispenser from MAGNUS MAGNUS, a medtech startup, has developed an intuitive hardware solution for everyday medical use. Three years ago, at the peak of the COVID pandemic, the company launched the MAGNUS dispenser. Maximilian Bieker was involved as a consultant on this project.

It is a disinfectant dispenser that replaces the conventional door handle, combining door opening with hand disinfection. The innovative product is aimed especially at frequently used rooms with high hygiene standards.

CATALYSER 2.2024 I 15

GIMME SHELTER FINANCING 2023 was not an easy year for the life sciences sector. Investors held back, VC companies prioritised maintaining the existing portfolio and tried to extend the lifetime and reach of financing by focussing.

Grit Zahn. Yes, this is true. But it´s less frightening in a group. A Life Science Factory like this is also a shelter, providing support and very specific help, because the combination of the open premises and the lively dialogue with the rapidly growing network of experienced coaches has created a vibrant ecosystem with very short communication channels.

CATALYSER. How does such an arduous year affect a startup ecosystem?

Marco Janezic. It's true, investors are travelling with the handbrake on. If anything, low-risk, advanced projects were sought after and invested in. Even the big pharmaceutical companies are experiencing uncertainty, fear for jobs and a wave of restructuring became a common topic.

CATALYSER. No good times for startups?

Marco Janezic. Not really. Takeover candidates are being sought which are in later stage or with products on the market. Money is available, but not for the early startup phases. Investors are still sitting on a lot of money that they have been able to collect, but there has been a lack of impetus to spread this across the entire spectrum of opportunities. On the contrary, the herd has tended to jump on the diet wave, and everyone is trying to get a slice of the cake. If you´re not in there or some other hot areas, you´ve been held at distance with a firm restraint.

Picture: © Life Science Factory

CATALYSER. How can the Life Science Factory help with this?

Grit Zahn. The Life Science Factory is a very agile startup centre. You could already see that during the early days, which coincided with the coronavirus pandemic. Life Science Factory had to throw all the plans overboard and build a community through a lot of online work. The fact that this was successful shows that the Life Science Factory team has struck a chord with startups.

Marco Janezic, Managing Director Blue Ribbon Partners

"All the money from investors has to be spent. We will see strong financing again."

CATALYSER. Now the pandemic is over, and the next challenges are just around the corner. Isn´t it always hard, stormy, and risky in the startup universe, in particular for the beginners?

Marco Janezic. It helps that the Life ­Science Factory, as a startup centre of the companies Sartorius and others, is independent thanks to their support. This creates this protected space which, with its proximity to industry, also creates channels for the products but also reflects the special challenges of a marketable product in a very hands-on way.

CATALYSER. Many people are now hoping that everything will improve this year, that investors will turn their attention back to the startup scene and that the difficult phase is over. Do you see any signs of this?

Marco Janezic. Occasionally and in special cases. But I am cautiously optimistic, not yet euphoric. Some changes to the framework conditions are positive: the Federal Agency for Disruptive Innovation (SPRIND) has been released from some of its shackles and can now function better as an investor for risky project ideas, which was previously lacking.

The Growth Opportunities Act contains a lot of good news for founders, now it just needs to be passed. All the money from investors still has to be spent, so I think there will be a strong acceleration in this area.

16 I

CATALYSER 2.2024

Grit Zahn. It is important for me to emphasise that a lot has also improved on the startup side. The whole area of startups has become much more professionalised.

In Göttingen, it has been possible to successfully complete the development phase of an ecosystem. The Life Science Factory is an anchor for the scene; this critical mass can now develop and stabilise here, which is necessary to ensure that investors are also tied to the location in the long term.

life science startups to shape their business idea in a sustainable way and take it to the next level in the shortest possible time. We have investors days, we have the Startup Day Lower Saxony. So, we try to provide a mix of internal training and coaching and the open stage for presentation. And we see and feel the progress every project takes from the start in our multi expert nursery.

CATALYSER. If you could make a wish, what would it be?

CATALYSER. Startups find open doors at the Life Science Factory, but also have to face critical judgement. How do you balance these contrasts?

Marco Janezic. There has to be a selection process for the startups. It is important to us that the projects have already undergone due diligence, that a filter takes place, which is why we also have very standardised Member­ships in the Factory. The added value is the complete offer, the team and its network. We now also help startups with grants so that they can overcome the entry hurdle to the Life Science Factory more easily.

Grit Zahn, Coach at Life Science Factory, Head of Research, Eternygen

"Everyone must be willing to learn.

It is a shared journey, we grow together."

Marco Janezic. We have the ELSA programme jointly running with Fraunhofer AHEAD and Helmholtz Munich which helps

CATALYSER. How are the startups doing?

How do you interact?

Grit Zahn. The startups come from Göttingen, but not only from Göttingen. That has already expanded a lot, they come from very different places. And they bring very different experiences with them. How does the technology transfer work there, what gaps are there in the business plan, what is the situation with patents? Is founding a company the right way to go? We have a lot of question marks at the beginning and then try to develop solutions.

Grit Zahn. If have seen a lot of trouble with technology transfer in Germany, and still do with some institutions. There is improvement but a clear priority to help the founders is missing. There is no incentive for startups as it is for high impact publication.

Second wish is for simple financing tools for the quick start, without judgement or bureaucracy, that would be nice. More experienced interim managers, entrepreneurs in residence who pass on their experience, that would be a good addition too. · The interview was conducted with Georg Kääb, |transkript

BACKROUND

ABOUT GRIT ZAHN Grit is a biochemist and has been active in drug development for more than 20 years.

She has held a number of positions at many institutions and companies, working as a researcher at the Charité university medical center in Berlin; in drug development at the Jerini AG biotech company where she helped develop a product to market maturity; in technology transfer at ipal GmbH; and today at Eternygen GmbH, where she is head of research and also advises other biotech companies.

Picture: © Life Science Factory

Grit Zahn. I think the network of coaches is very important. We started out with three coaches, now there are 15 of us, who regularly exchange a lot of information about the startup teams. We learn a lot from each other with these different perspectives. And we can pass this on to the startups. It's true that they are welcomed with open arms, but then they have to make a lot of effort.

But we work together. We walk the path together and we learn together. When we give homework, we also help them to solve it.

Marco Janezic. As I said, the framework has improved but there is always space for more. Politicians who might not have been the first to spring to mind if it comes to the startup environment and conditions for a vibrant ecosystem are now very supportiv. I very much wish that the public will follow and embrace the founders that want to make the future a better place.

CATALYSER 2.2024 I 17

INVESTOR JARGON FOR FOUNDERS INVESTMENT Investors speak their own language, which young founders in particular must first learn to understand. They need to know these terms.

From ‘cap table’ to ‘vesting’: Startups are characterised by innovative business ideas.

But young companies often need financial support from investors to get off to a flying start and develop their full growth potential. However, investors often do not speak the same language as academic founding teams. We will briefly explain key investor terms below.

Picture: © peshkova - stock.adobe.com (Life Science Factory)

Cap table A cap table, short for capitalisation table, is listing all company shareholders based on their percentage share in the company. This is particularly important if there are several founders or additional shareholders. The cap table makes managing the startup’s financial interests and ownership structure easier. But beware: The more investors join a startup, the more diluted the cap table becomes. This makes it difficult for founders to secure future financing or negotiate favourable conditions.

Due diligence Due diligence describes the careful analysis and examination of a startup regarding its various aspects, such as the economic, legal, and financial dimensions. The analysis is conducted before crucial decisions are made, especially in the case of investments in the company.

Due diligence is carried out by experts who do not work in the respective startup or by external consultants. The aim of due diligence is to gain a comprehensive understanding of the facts, opportunities, and risks that arise for investors. Thus, the analysis helps to minimise business

risks and to increase the potential for successful cooperation.

Vesting - transfer of shares Vesting refers to the distribution of shares to the founders or employees of a company to motivate them in the long term. In the case of startups, this usually initially involves gradually releasing shares. It is a common practice to opt for a period of four years, during which founders are credited with 1/48 of the shares as “vested” every month. At the end of this period, the founders can leave the company

without incurring any losses. Important: Investors do not usually receive vesting shares or units.

Cash burn rate - avoiding insolvency How quickly does a startup “burn” or use up its capital? This information is given by the cash burn rate and is specified as an amount (“How much money is used each month?”) or as a period (“How long will the available money last?”). The value is calculated for startups not yet earning money and companies in crisis. The cash burn rate indicates how much money flows

18 I

CATALYSER 2.2024

from the business. It does not equal the loss incurred by the company and can differ significantly from the profit and loss account prepared. Startups should always compare the actual cash burn rate with the planned cash burn rate, as an increased value forces them to act more quickly. The cash burn rate is an essential indicator for avoiding insolvency and securing the company’s existence.

Pre-money and post-money valuation The pre-money valuation describes the company’s valuation before a funding round, i.e., before investors inject equity into the company. Among other factors, the startup is evaluated based on the turnover, profits, and experience of the founding team. The pre-money valuation is a decisive factor for investors in determining the value of the startup and the amount of the investment, as well as the future company shares. In contrast, the

post-money valuation defines the company value after a financing round plus the capital invested by the investors. The post-money valuation indicates the startup’s success: A higher rating shows that the company is growing and thriving. It also makes the company more attractive to potential investors.

Bootstrapping Bootstrapping is a way of starting a business without external funding. The aim is to avoid expenses while maximising income.

Bootstrapping requires founders to work with a limited budget and to follow a strict timetable in order to become operational and cash flow positive as quickly as possible. The founders retain full control of their startup as they do not have to work with investors and learn to operate economically and effectively. However, the startup's development options are limited with this form of financing. The main instruments

for bootstrapping are equity, money from friends and family, public grants and small bank loans. In the case of rapid growth and the subsequent decision to seek outside capital, investors are often impressed if a startup has managed to finance itself and grow on its own.

Smart Money Smart money refers to investors who provide startups not only with money, but also with their knowledge, strategic support, network and experience. Smart money investors, such as venture capitalists, business angels and accelerators, provide startups with valuable insights into the industry and the market, enabling them to grow more quickly and more effectively.

They can also help find business partners and build a network of key contacts. To ensure a successful collaboration, startups should always consider which investors are the best fit for their business. ·

April 29 - 30

Life Science Factory @ BioVaria, Munich

June 27 - 30

Life Science Factory @ Festival der Zukunft, Munich

July 2 - 3

Life Science Factory @ BayOConnect, Munich

ELSA Program, Goettingen

November 4-6

life science factory on tour

Life Science Factory @ Bio Europe, Stockholm

Bildnachweis: © Kjpargeter - Freepik.com

September - December

Catalyser 1.2023 I 19

PA R T

IN

Picture:

festivalderzukunft.com

E

R

SH

IP W

IT

H

Don‘t miss the most exciting gathering of tech thought leaders from startups, VCs, corporates, science, politics, arts and media!

Munich, 2024 June 27 to 30

N

FROM LIFE SCIENCES TO AI

lifescience-factory.com/de/catalyser/