Business and Diagnostic Testing

Topics: Business, Salary, Value added Pages: 3 (976 words) Published: October 12, 2013
NanoGene Technologies, Inc is a life sciences start-up based on nanotechnology. The firm was founded by an unusually large number of people; five employees of the Eastern Institute of Technologies Advanced Materials Sciences Lab (AMSL). The founders worked in different sections of AMSL, but they were working on a set of technologies that were linked in the human genome project. Together, the founders developed techniques and compounds that caused the genes to ‘stretch out and straighten up’ making it much easier for labs to do the cutting and manipulation that is required in diagnostic testing. NanoGene planned to use this technology, which is owned by the Eastern Institute of Technologies, to begin to sell the patented substrate material to diagnostic testing labs around the world. As the business model of NanoGene formed, the founders decided to equally split the equity among the five members and all of them would have the same salary of $120,000. Will Tompkins, one of the founders, was named the CEO. In the first year, NanoGene secured the required intellectual property to the technology by offering the Eastern Institute of Technologies 15% in equity and a 3% royalty on sales. Will Tompkins used one of his contacts, an active angel investor, to obtain the angel funding of $600,000 at $2.25 million post-money valuation. The value proposition, customer segment, and revenue streams are fairly straight forward. NanoGene’s technology offers their target customers, diagnostic testing labs around the world, an easier and faster way to complete diagnostic testing. The sales of the substrate material will provide NanoGene with its source of revenue. Currently, NanoGene is trying to recruit Paige Miller, a Havard Business School graduate who has been doing some consulting for NanoGene. Additionally, NanoGene is in their Series A funding. NanoGene is looking to raise $10 million which will be sufficient to fund them for 18 months, to prove their technology, and to...
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