Although most new entrepreneurs seek capital from family, friends and angels, it also helps to court backers who are experts in the product you've created. Consider Molecular Biometrics, a Boston startup whose technology helps doctors select viable embryos for in vitro fertilization. Founder Jim Posillico, 63, raised $2.4 million in seed capital from about 40 physicians around the world.
"We began with ob-gyns and fertility doctors whom I knew from my previous career as vice president of medical affairs at Ares-Serono [now EMD Serono], which makes fertility drugs, and the women's health company Cooper Surgical Inc., where I was chief scientific officer," Posillico says. "These doctors saw the market opportunity and brought in their friends. It gave us the story to approach venture capitalists."
Researchers at McGill University in Montreal originally developed Molecular Biometrics' technology. The lion's share of the angel money went to set up an off-campus lab as the company's research collaboration with McGill was winding down. "We still weren't being paid, but now we could cover expenses for travel, intellectual-property costs and clinical trials," explains Posillico. "We also contracted with a manufacturer to build the instrumentation and sample cells we needed to assess embryo viability."
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