I’ve been told to provide an assessment of the competition in the market, what does this mean?

When completing an assessment of the competition for your product that is in development there are a number of factors to consider. It is critical to have a clearly defined market and product definition to enable this analysis. It is important to evaluate both existing products and those in development to prevent bringing a product to market that doesn’t have a clear competitive advantage.

A common mistake made by many startup companies is not to include products that approach the problem in completely different ways. For example, someone that is developing a diagnostic product based on a PCR assay might only include other PCR based assays in their analysis rather than including ELISA or mass spectrometry based assays. An advantage of looking broadly for what might be competition can be that potentially new uses or markets for your product or product derivatives can be identified.

The VC I talked with sounds interested and said they were going to start due diligence soon, how long before funding flows?

A lot longer than you might think. Before making an investment, VCs will want to carefully look at your company and technology. The due diligence process usually lasts for several months and will involve a very deep look into your company, its finances, management, sustainable advantage, corporate structure, intellectual property, plans, assumptions, etc. The good news is that most VC’s enter due diligence thinking they would like to do the deal. But do expect the VC to look at everything very carefully and ask you to fix whatever is not in order.

Darren Fast, Ph.D.
President
Solalta Advisors
49 Nutley Circle
Winnipeg, MB R2N 1S2
204-229-8831
dfast@solalta.com
www.solalta.com

Do you have questions on investment options? Send your questions to Katherine Taverner