As technology entrepreneurs develop their businesses, it is common to encounter the “valley of death” – a period early in the development of a company when sales have not yet begun but capital is desperately needed to build the business. Companies have to traverse this valley of death to reach the stage when sales begin and institutional investors feel confident injecting the major growth capital funds required.
For some types of entrepreneurial companies – especially those engaged in the development of new chemicals, polymers, materials, energy products or bio-based products – there is another significant hurdle to overcome. These companies need to be able to prove that their innovations will scale-up from the bench to the manufacturing plant. This stage of development requires access to specialized pilot plants and scale-up technologies – expensive infrastructure required to prove that the chemicals or materials can be produced cost-effectively in volume.
So what are entrepreneurs to do when they reach this piloting and scale-up phase? Building one’s own pilot-plant is a daunting, time consuming and very expensive task. Raising the capital for this constitutes part of the valley of death for these companies. One option is to approach contract manufacturers (called toll manufacturers in the chemicals industry), but this again poses challenges since toll manufacturers seldom want to produce small batches of an experimental chemical, polymer or material and those who will charge a high price for accessing their facilities, plus you may have to wait in line.
To read the full, original article click on this link: Capacity : Fall 2010 | Features | Tech Park Has Impressive Past And Exciting Future
Author: Simon J. Tripp
