Non-dilutive capital for biotech startups, Part 3

This article is the third, and final, part of a series on non-dilutive capital opportunities, such as ARPA-H, for life science and healthcare founders. Be sure to check the first two parts of the series where I discuss BARDA and CDMRP as well as NIH SEED grants. 

What is ARPA-H?

The ARPA-H (Advanced Research Projects Agency for Health) grant is a federal government funding initiative established to drive innovation and breakthrough research in health and biomedical fields. ARPA-H was officially established by the US Congress in 2021. It falls under the US Department of Health and Human Services (HHS) and operates in collaboration with the National Institutes of Health (NIH). 

At its core, the purpose of ARPA-H aims to catalyze transformative health innovations that can significantly improve health outcomes. It focuses on high-risk, high-reward research projects that have the potential to revolutionize various aspects of healthcare.

It supports projects that may face challenges in conventional research funding due to their innovative or speculative nature. The grant program targets a broad range of health issues, including chronic diseases, infectious diseases, mental health, and personalized medicine. 

For life science and healthcare startup founders, ARPA-H represents a non-dilutive capital fundraising opportunity. Non-dilutive capital refers to the financial capital you can obtain without giving up any equity or ownership of your business. At the early-stage (pre-Series A), you need to understand how equity dilution impacts the bottom-line of your startup. Non-dilutive capital can help alleviate the financial impacts to your startup and can come in the form of federal grants, such as ARPA-H. 

However, ARPA-H grants are not just for pre-Series A startups. Robert Wegner, Director of Business Development at Euroleader, points out that “later-stage companies can run their IP through grants.” He goes on to explain that later-stage companies use grants “to help fund their R&D that's not a direct focus of the company itself.” 

Preparing for ARPA-H

Preparing for an ARPA-H grant involves key steps for life science and healthcare startup founders to ensure their proposals stand out and meet the specific requirements of the funding agency. Here are 10 steps to help you prepare to apply and defend your application:  

1. Understand the ARPA-H focus areas

Knowing the agency's focus areas can help you ensure your startup aligns with ARPA-H’s mission and goals. Equally important is to articulate clearly how your startup addresses the focus areas. 

2. Develop a strong proposal

Clearly define the health problem your startup addresses and use data and evidence to demonstrate the significance and urgency of the problem. Set clear, achievable milestones that demonstrate progress at each stage of the project. Explain how your approach is different from existing solutions, and why it has the potential to succeed. 

3. Focus on health impact and scalability

Clearly articulate in your proposal the potential health impact of your startup. Explain how it will improve healthcare outcomes and benefit patients. Discuss the scalability and sustainability of your solution. Show how it can be scaled up and sustained beyond the funding period.  

4. Build a strong team

Assemble a team with the necessary expertise and highlight the qualifications of key team members and their roles in your startup. If you have partnerships with other organizations, researchers or institutions, highlight those collaborations, too. 

5. Prepare a detailed budget

Provide a detailed budget and justify each expense explaining how it contributes to your startup’s goals. In addition, understanding financial forecasting and why it is important to potential investors is vital. Be prepared to demonstrate financial forecasting and how it influences your budget.

6. Plan for evaluation and metrics

Develop an evaluation plan to measure the success and impact of your startup. Be sure to include specific metrics and methods for assessing progress. 

7. Comply with requirements

Carefully review and follow the ARPA-H application guidelines and requirements. Ensure all necessary documents and information are included and that your startup complies with relevant laws, including ethical, regulatory and safety issues. 

8. Seek feedback and revise

Don’t submit your first draft. Continuously refine and improve your proposal. Have your proposal reviewed by peers or experts in the field. Incorporate their feedback to improve the quality of your submission. Revise and refine your proposal to ensure clarity, coherence and a compelling narrative.  

9. Practice your pitch

Be prepared to pitch your project if required. Develop a concise and compelling pitch that highlights the key aspects of your proposal. Try to anticipate potential questions and prepare clear and confident responses. 

10. Stay informed and build your network

Participate in ARPA-H workshops, seminars and networking events. These can provide valuable insights and connections. Engage with the broader research and startup community. Building relationships can provide support and open doors for collaboration. 

Following the steps above can help improve your chances of securing an ARPA-H grant and help to advance your innovative healthcare solutions. However, given the competitive environment for being awarded an ARPA-H grant, you should consider doing even more.  There are lesser-known secrets and tips that can help with your chances of success. 

Give yourself an advantage

Fortunately, there are further steps you can take to help put yourself in the best possible position to beat your competition when it comes to being awarded ARPA-H grants. Here are seven steps you can do in addition to the preparation steps above that can help you get ahead of other applicants: 

1. Know the decision-makers

Research the backgrounds and interests of key decision-makers at ARPA-H. Tailor your proposal to align with their priorities and perspectives. If possible, engage with program managers or attend ARPA-H events to understand their expectations and build relationships. 

2. Emphasize the transformative potential

This advice is tied to steps #2 and #3 in the preparation steps above. ARPA-H looks for projects with transformative potential. Clearly articulate how your project could lead to groundbreaking changes in healthcare. 

3. Highlight interdisciplinary approach

Showcase how your project integrates insights from multiple disciplines. ARPA-H values innovative solutions that break traditional boundaries. 

4. Demonstrate technical mastery and feasibility

Provide detailed technical explanations and data that demonstrate your deep understanding of the problem and the feasibility of your solution. Where possible, include preliminary data or prototypes to show that your idea has been validated at some level. 

5. Craft a compelling narrative

This advice is tied to step #9 in the preparation steps above regarding practicing your pitch. Your application should tell a compelling story that captures the reviewers’ attention. Make the narrative engaging and easy to follow. 

6. Leverage external support and endorsements

If you can, include letters of support from respected figures in the industry, or academia, to add credibility to your proposal. Wegner suggests that “partnerships with universities seem to go a long way” with ARPA-H decision-makers. 

7. Stay persistent and resilient

If you don’t succeed initially, seek feedback and learn from it. Use this feedback to strengthen future applications. Keep up with ARPA-H’s evolving priorities and focus areas. Adapt your proposals to align with these changes. 

Conclusion

Federal grants, like ARPA-H, are very competitive when it comes to being awarded a grant. You should be prepared to do the work necessary to make your startup and your proposal stand out. By incorporating the strategies mentioned in this article, you could enhance your chances of securing an ARPA-H grant and driving your innovative healthcare project forward. 

Acknowledgement

Thank you to Robert Wegner, Director of Business Development at Euroleader, for his contributions to this article.