Starting a biotech company is not an easy task! Formation of a biotech company is not about instant celebrity of the scientific founders of the company and open floor offices with exposed brick in fancy lofts. To form a biotech company, the founder(s) must hire an experienced attorney in doing biotech start-ups. There are many questions and issues that arise when forming a biotech company that are too complicated for most founders to handle. Below, we provide some practical information about the steps required for the formation your biotech start-up.

The first questions that come in the mind of the founders of a biotech start-up are the following: Who will own the company and how the ownership will be divided? How the biotech start-up will be managed? What IP will the biotech own? How the biotech will be funded? Do we need seed funding or should we aim for a series A round of funding? How our biotech will compensate its owners? And most importantly what is the main product that the biotech will develop?

The Intellectual Property (IP) strategy of the biotech start-up is critical in the early stages of the company. Overall, the four main types of IP assets include the trademarks, copyrights, trade secrets and patents. A useful resource for understanding how patents are handled in the United States is the website of the US Patent and Trademark Office ( while the World Intellectual Property Organization ( is a key source for understanding the rules for global IP procedures.

All the US universities have a Technology Transfer Office that is responsible for the collection of invention disclosure reports from academic faculty and generation of patent applications with collaborating law firms. The technology transfer office personnel could also potentially identify and introduce business partners to the faculty. However, the founders should have in mind that most of these offices have a huge amount of applications, they are understaffed and in some cases it would be preferable if the founders of the company work with an outside law firm in order to establish the biotech start-up. Once the patent is in place then the business partner of the biotech start-up could license the IP, paying all the patent costs to the technology transfer office.

When the patent is licensed into the biotech start-up company, the academic founders of the company usually serve the company as a consultant, member of the scientific advisory board or as member of the board of directors. It is important to know that academic founders usually do not serve as executives and members of the management team, as the founders are already employed by the licensor and this can set the stage for conflicts of interest. The academic founders could be members of the executive team by signing an agreement with their university, working potentially as part-time faculty or in some cases by quitting their academic positions.

All the people in the biotech start-up should be individuals that the founder(s) trust, knowing their work habits and idiosyncrasies very well. The core persons that create a biotech start-up usually include 2-5 individuals, including 1-2 scientific founders, a business partner who will serve as the CEO and in some cases a seed investor.