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I don’t know if there is some sort of mathematical equation you can put to this, but it would certainly appear that the smaller the investor’s check, the bigger the headache they become to an entrepreneur.

You might think the opposite would be t

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

rue, that smaller investors would only expect to play a minor role in the business while the larger investors would make all of the important calls. What you’ll find in practice, though, is that raising and managing small chunks of capital from

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

small investors is incredibly laborious while the more manageable investments come from much larger investors.

Less Money = More Time

Smaller business investors seem to have disproportionately more time to invest than they have money. These ar

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

the guys who are putting $5,000 into your company and think they’re Gordon Gekko, trying to run the company like some big time investor. All this extra time that they have to manage these investments actually sucks the life out of your deal bec

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ause you have to constantly manage their expectations to the nth degree of detail.

Certainly getting help from a small business investor to grow your business is a nice thing, but not if it involves being micro-managed to death over every decisi

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

on. A good small business investor will understand that their role is to invest in the company, not run the company. You want their invested capital working for your business, not another pseudo manager to contend with.

Small Checks Take Longe

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

Raising smaller amounts of capital doesn’t translate into reducing the time it takes to get a check. In fact, sometimes the smaller amounts take more time because the people writing those checks really can’t afford to invest (read: gamble) tha

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

t money to begin with.

They need to be certain of every last aspect of the deal to the point where they over-analyze the deal completely. Before you know it, you’re jumping through all of these hoops over a few thousand dollars. It’s a huge wa

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ste of time.

Even if you do manage to land these small business investors, you can be certain he’s going to be on the phone with you every 15 minutes trying to get a status update on his investment. He’s got the time, and the investment is incr

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

dibly meaningful to his overall personal wealth. You’ve become his living, breathing stock ticker that he constantly wants to see updated.

Big Kids Run Faster

Believe it or not, it actually takes just as long to raise larger amounts of capital

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

as it does smaller amounts. That’s because the larger investors (the big kids) tend to have less time to spend on any one deal. They have lots of deals to choose from, so they have to get to the point quickly and make a decision quickly.

For

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

an entrepreneur raising capital, this is the best thing in the world. Ideally you want as much flexibility with the capital that you raise as you can muster. You want an investor who pays attention to the important points of your growth, like m

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

nthly earnings, not daily expenses. That’s what you’re there for!

That’s why a bigger investor is usually a much better option when raising capital. They can make decisions about the investment faster, they can fill up your investment requirem

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ents faster, and they can leave you the heck alone so that you can grow the company a lot faster.

Too many cooks in the kitchen

With fewer small business investors you also overcome the problem of “too many cooks in the kitchen”. Startup compa

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

nies need to make lots of decisions very quickly and decisively. The company runs a lot better as a dictatorship than a democracy. The more votes you create by adding more investors the longer the process becomes to make a decision.

You can ov

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

rcome this problem by giving certain small business investors “voting rights” and giving other small business investors the right to keep quiet, but don’t kid yourself – you’re going to hear from the guys who don’t have voting rights whether you

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

like it or not. So the best antidote is to simply have less people at the decision table.

Less is More

As you’re thinking about raising your next round of capital, don’t think in terms of lots of small business investors with a little capital

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

– think in terms of one (or two) investors with a whole lot of capital. You don’t score any additional points for racking up the greatest number of investors. If there are any points to be scored, it’s from getting as few investors as possible

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

n order to get your requirements fulfilled.

When growing a new business, every moment of your time has an incredible amount of value. The more time you spend placating overzealous small business investors, the less time you spend doing what you

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

all came there to do in the first place – growing the company!

Wil Schroter’s latest book “Go BIG or Go HOME – How the next generation of startup companies think BIG, grow FAST, and dominate markets overnight” is available at www.WilSchroter.co

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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