This post lists vetted service providers at different price points.
Biotechnology and medtech startups have many unique challenges that are not faced by young companies in other industries. However, there are basic services that all startups need to either contract out or bring in-house. It often makes the most sense for biotech and medtech startups to go the contracted services route, but there are so many vendors out there that choosing which ones can be confusing. This overwhelming number of options causes some startups to put off the decision, which leads to disorganization and in severe cases, legal trouble.
As recommendations are a wonderful way in which to find the best services, this post lists vetted service providers at different price points, and why your startup needs them just as much as it needs R&D.
Besides real estate, people are usually the next highest cost at a startup. Therefore, it makes sense to take care of these expensive resources, prevent them from becoming liabilities, and attract the most talented ones.
Human resources software that incorporates payroll can help a startup to make sure their employees are compensated accurately and on time. These softwares can also simplify the process of onboarding new employees, guiding both the company and the new hire to make sure forms are completed correctly.
Correct form completion is only one of the legal concerns that comes along with hiring people. The laws that govern human resources are complex and violations can cost a company dearly. These include employment laws that determine whether a current or former employee has standing to sue an employer. Purpose-built software for human resources will take these laws into account and provide the employer with a base-level of compliance.
In order to attract top job candidates in the first place, it is helpful for employers to be able to offer benefits. Human resources softwares can manage these benefits and some even help startups to provide better benefits than they could by themselves.
Thus, a way to manage human resources without having to learn all the ins and outs of the field makes sense for the vast majority of startups. These services are good options, and provide perhaps the biggest benefit of all—time savings that biotech and medtech startups can put toward product development and fundraising.
Gusto is a cloud-based payroll and human resources system. They offer basic payroll, onboarding, workers compensation admin, paid-time-off, and direct deposit for as little as $25 per month for one employee. Gusto’s higher price tiers incorporate additional benefits administration, more nuanced onboarding, and better customer support, making it a solution that can grow with a young company. One of their biggest benefits is their ease of use, such that little to no human resources or payroll knowledge is required in order to use the system.
Insperity is a certified professional employer organization (PEO), which means they co-employ people with their client companies in order to handle payroll taxes for them. The “certified” aspect means that the IRS has examined the PEO and designated them as such. It is essentially a stamp of approval that the PEO is doing things correctly. By being a co-employer, Insperity can take advantage of its size and offer benefits to its clients that are far beyond what a small company could provide on its own. They provide startups with a competitive advantage in attracting top talent.
Additionally, Insperity provides services like safety training and risk assessment—particularly important in industries like biotech and medtech where employees work with hazardous chemicals and potentially dangerous equipment.
Most people know this trope used in television and film: A business hires an accountant who is then horrified to be presented with a shoebox full of receipts and expected to make sense of them. Sadly, this situation occurs in real life unfortunately often. For a business, keeping track of money coming in and going out is of paramount importance. Startups frequently have a more difficult time borrowing money, so overspending can easily lead a young company to a premature death. Plus, keeping track of accounts makes it much easier to complete tax returns accurately and avoid legal trouble with the IRS.
Many startups assume one of two extremes when it comes to accounting; either they think accounting services are unaffordable and try to keep track of everything in Microsoft Excel, or they think they have to hire a certified public accountant to do bookkeeping. Instead, startups can take advantage of relatively inexpensive software solutions and services to keep things organized. Either a little bit of accounting skill or a few hours per month from a bookkeeper in combination with software is often enough to make sure a startup knows exactly how much money it is spending at all times.
In terms of online accounting software that is easy to learn how to use, Xero is a great option. It is low-cost and has a user-interface that does not require a degree in accounting to understand. Their repository of articles and courses in Xero Central allow a complete beginner to link their bank accounts, perform reconciliations, and generate invoices.
The most well-recognized name in accounting software, Quickbooks, has an excellent online platform that is more expensive than Xero but is definitely not exorbitant. Especially for biotech and medtech companies that may utilize grant funding, Quickbooks may be a good choice. Quickbooks reports are instantly recognizable by grant funding agencies and making life easy for the funders is always a good idea. However, Quickbooks Online is somewhat less user-friendly for non-accountants. That is where hiring a bookkeeper can help. Quickbooks Online offers QBO Live Bookkeeping, a service where Quickbooks’ employees onboard and reconcile accounts for startups.
For a company that has either more transactions than it can easily keep up with or more complex requirements, a bookkeeping service that assigns an individual to each account may be the best choice. Supporting Strategies has a main bookkeeper as well as a backup assigned to each client, so that accounts are reconciled efficiently and client questions are answered rapidly. Besides account reconciliation, Supporting Strategies also keeps track of accounts receivable, reminding clients to collect any outstanding payments that are due, and notifies clients of any abnormal account activity. They can work with any cloud accounting software that the client prefers, but they provide a discount for Quickbooks Online as they are part of an affiliate program.
The common wisdom is that once lawyers get involved, the lawyers are the ones who win. However, the risks associated with putting off the help of legal counsel significantly outweigh the rewards for biotech and medtech startups. There are a number of different situations in which these young companies need legal advice and services. From simple incorporation to capitalization to intellectual property, there are many ways in which a startup can make mistakes that cost them dearly. To learn more about intellectual property and how to protect it without breaking the bank, see this previous post.
It’s true that legal services are expensive, but luckily many firms recognize that startups have limited resources and work to make their terms feasible. Since so many factors determine the price that a company will pay for legal services, these firms are listed without relative price comparisons.
Well-known in the life sciences, WSGR has a thriving life sciences patent and innovation practice. It is actually the largest in the world, according to their site. They have expertise in many areas of the life sciences including biotech and medtech. Besides intellectual property, they also have corporate, litigation, and regulatory expertise. WSGR is also known for working with startups to develop terms that work for both parties.
Knobbe is another firm well-known for intellectual property law. They focus on science and technology including biotech and medtech. Rather than encompassing many different types of law, they are solely an intellectual property firm, so they could be a good fit for a startup that only has patent protection needs.
This firm has the longest and broadest selection of services, including not only intellectual property and corporate law, but also employment, crisis management, strategic solutions, and more. Their Orange County office is intellectual property focused, but McDermott Will & Emery is a global firm and well-suited to a growing company.
While a Microsoft Excel spreadsheet can suffice for purchasing, it’s also going to cause a startup to miss out on the best pricing available, generate more manual work in accounting, and likely result in errors such as duplicate buying. These issues can come up in any industry, but luckily there are specific applications and companies that assist biotech and medtech companies in their unique purchasing processes. These range from free platforms that allow startups to find better pricing to full-service purchasing partners that negotiate discounts, place orders, and track shipments.
Though it began as a price comparison website to help scientists learn when they were overpaying for chemicals, LabSpend has evolved into one of the few free platforms startups can use to place orders and keep track of inventory. LabSpend allows companies to input their account information for different suppliers such as VWR, Fisher Scientific, and Millipore-Sigma to see their own account’s pricing. Startups can set up approval processes, track inventory, and store Safety Data Sheets all within the software. Plus, the chemical pricing comparison tool is still available.
Quartzy started as a completely free-to-use platform for purchasing and lab management and has since grown so popular that they recently instituted paid tiers. There are still two free versions, one for non-profits/academia and one for up to 5 for-profit users. One of their selling points is the number of products in their catalog—over 10 million. Another aspect that saves many startups money is their “Effortless Quotes” tool, which compares prices on the specific product in question.
For the startup that needs more involved purchasing support, HappiLabs offers “virtual lab management,” which includes not only placing orders, but also price comparisons, price negotiation, researching products and CRO’s, supplier account setup, regulatory paperwork management, bookkeeping and financial reporting, and handling customer service issues with suppliers. These higher value services cost more, but for some labs the time savings are worth it.
While this list of services is by no means exhaustive for biotech and medtech companies, it is a good starting place—especially for a startup with a limited budget. Making a point to utilize these services early on may seem like overkill, but it is much easier to institute a way of operating when a company has just a few employees than when there are ten and everyone has become set in their ways. Additionally, these tools all accomplish the valuable task of saving a startup time over the long run, even if setup takes a little while at first.
Furthermore, these services are not the only good ones out there. There may be applications, software, and firms that are better suited to your company. However, much of the time savings that a startup gains by using these can be wasted by spending an inordinate amount of time evaluating all the services out there. In almost all cases it is possible to switch to a different vendor if the first one doesn’t work out. Good services will in fact make it easy to switch because they believe strongly enough in their product that they expect their clients to be happy with it.
As in many cases, deciding which services to utilize is more important than making sure that it is the perfect one. Especially for a startup without fully formed processes, services have to be tried out for the company to learn what it is they really need. This is a normal part of developing company operations as a startup, so the earlier the founders begin, the better.
Do you have a great company in the bioscience or medtech industry? Do you need wet-lab and/or fabrication space to develop and test your product?
