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LIFESCIENCELEADER.COM THE CMO LEADERSHIP AWARDS 2015 51 CMO, it's important that your scientists see eye-to-eye with theirs. One attendee noted a situation where a biotech hired a head of outsourcing who did not seem to fully understand the company's chemistry. When it came time to select a partner, instead of speaking to knowledgeable sources in the industry, he opted to hire a broker to help with the search process. "We have been negotiating with them for six months," noted the attendee. "In the meantime, we have already proved the concept and produced the molecule, and are ready to patent our work. How do you avoid these situa- tions?" While the panelists empathized with the situation, they did not offer much hope. "The chances the CEO will fire the guy he hired are about zero," noted one of them. "It will be left up to you to decide how you want to handle the situation." The lesson to be learned is that much of what happens in the start-up phase — the funding, hiring, etc. — is all about rela- tionships. If your best scientist for some reason has a falling out with your CMO, the decision to dump the scientist or the CMO is never an easy one. "This is a small community," noted another speaker. "You never want to throw someone under the bus in order to prove you were right. There is a lot of business out there, and we will walk away from any relationship if it doesn't make sense. There has to be a comfortable fit between the two firms. If we don't have a fit, then it doesn't make sense to be involved." USE CAUTION WHEN CHOOSING YOUR BOARD As one panelist noted during this session, if there is money in front of you, you should take it. But if you have the luxury of being able to choose what money to take, you should also perform due dili- gence on the investors you're considering. Realize going in that there will be VCs who will be good to deal with and those who are not. For a young CEO starting out in the industry, your investors and board will be important parts of your life. All of your investors and board members will expect you to spend some amount of time inter- acting with them. The panel recommends you find folks who will support you in the relationship. "It is not uncommon for investors to come up with random suggestions that are meant to be helpful, but which are often quite ridiculous," noted one panelist. "Someone recently shared their solution to this problem with me, and I found it to be quite ingenious. If you go to a meeting and try to get everyone to agree with you, you will spend a lot of time arguing with them. Instead, try listening to their com- ments while smiling and nodding. When the person stops talking, move on to the next slide. The barrier to moving on to the next slide are the words "no" or "stop." If you don't hear those words, just let them talk, and then move on. It doesn't matter if you agree with them or not." "I was once in a similar situation," noted another panelist. "Sometimes you get an investor who can only be described as a wild card. You don't know them, you don't necessarily trust them, and you never know what kind of crazy ideas they will present. With one, I was always wondering how we would be able to move forward with his ideas. People would agree with him because everyone wanted to get along. Afterwards, I would call up the board chair and ask if we were really going to do what was suggested. Generally, we would have a discussion and then fix the situation behind the scenes. These are issues you need to be prepared to deal with." Preplanning for these meetings is also a big help. For example if there is a data package that you want, talk with the investors ahead of time to understand their concerns and know their perspec- tive going in. Having that knowledge ahead of time will help you to know if you have their support or if it will be a battle. You always want your board meetings to go as smoothly as possible and with as few votes as are necessary. Another good suggestion: If you are in a situation where you have 20 or 30 angel investors, the best thing to do is put them into an LLC. Then have one representative You can paralyze yourself with analysis, but it pays to spend a week doing research to ensure a new technology will work. It is not uncommon for investors to come up with random suggestions that are meant to be helpful, but which are often quite ridiculous.