How to avoid the Death Valley Curve
The Death Valley Curve is a common term used in traditional venture capital funding. It is a colloquial term used to refer to the time span from when a start-up receives an initial capital contribution, to when it begins generating revenues. During the Death Valley Curve, additional financing is usually scarce, leaving the firm vulnerable to cash flow requirements.
The Death Valley has always been a problem with traditional venture capital funding, mainly due to the venture capital company’s focus on profitability and the drawing of fees for itself. Other issues also contribute to the company struggling to bridge the valley, including:
· Inadequate product, doesn’t solve a problem
· Wrong read of market — push rather than pull, as the founders perceive a need but the market doesn’t agree
· No access to capital
· Demotivated management
· Time spent raising capital detracts from business
· Investment terms unattractive/unacceptable
But innovators need not despair, HeartChain has created a new way to raise capital with far less restrictions than VC and less risk of falling into Death Valley. By using blockchain technology and cryptocurrency HeartChain will help early-stage medical researchers raise off balance sheet, non-dilutive funds.
HeartChain has developed a platform upon which it offers ICOs for innovation products, to its members. Each ICO offers Innovation Product Tokens (IPT) that represent the early-stage cost of production of the innovation product. Members sponsor these innovation products through the purchase of the IPT. When the product comes to market, the tokens can be redeemed for the new retail value of the product, or donated back the innovation company for further research.
The potential for product inadequacy or reading the market incorrectly will be alleviated by the large sponsor base. Those buying the IPT, your sponsors, are potentially your future clients. The outcome of this collective wisdom of crowds, will be mean the better underwriting deals, as well as the better IP, better team, better products and better execution plan will be chosen to proceed.
HeartChain is also offering expertise as well as funding. The HeartChain management team has more than 153 years of combined experience in developing medical and biotech products and raising the funds to get them to market. The team will work with each innovation company to help it structure the proposal for its ICO, as well as advise on how to bring its product to market successfully. This will include support such as:
· Definition of the clinical problem
· Ensuring the product solves a problem in a unique and innovative way
· Description and sizing of the market opportunity
· Competitive landscape and alternative treatments, if any
· Scientific and clinical innovation of the new enterprise
· IP strategy and intellectual estate building required to go to market
· Key milestones and clinical phases
· Business and distribution model
· Financial projections
· Management team and advisors
· Potential partners and collaborator
· Future expected price of the utility product when on the market
· Reimbursement environment
· Regulatory path
· Potential M&A
This unique platform gives innovators an opportunity to bring their life-saving products to market faster, without diluting ownership or control of their business. Innovators also receive supporting expertise with less bureaucratic interference than venture capital creates. Individuals and organizations have the opportunity to sponsor the innovations of their choice and benefit financially when the products come to market.