The Challenge: High R&D Costs and Equity Dilution Risks

By 2022, BioNexis Therapeutics, a promising medical product research company, had developed two breakthrough products: a non-invasive glucose monitoring device and an AI-driven diagnostic platform. However, taking these products from prototype to regulatory approval and commercialization required massive R&D investment.

Key hurdles included:

1. Capital-Intensive R&D

   • Clinical trials, laboratory validations, and regulatory testing demanded over ₹400 Crores in funding.

   • Venture capital was available but required heavy equity dilution (up to 35%).

2. Equity Protection Concerns

   • Founders feared losing strategic control if they raised additional rounds through equity financing.

   • Early investors pushed for faster ROI, creating misalignment on long-term R&D priorities.

3. Regulatory Costs

   • FDA and CE approvals required multiple phases of testing, documentation, and external audits.

   • Compliance-related expenses risked draining the limited cash runway.

4. Limited Awareness of Non-Dilutive Funding

   • Leadership team lacked visibility into global grants, government subsidies, and collaborative R&D funding opportunities.

5. Investor Perception Risks

   • Heavy dilution early on could lower valuation in future rounds, making BioNexis less attractive to strategic partners.

The Solution: Prime PI’s R&D Funding and Equity Protection Engagement

BioNexis partnered with Prime PI’s Funding Advisory Team to secure substantial non-dilutive financing while protecting founder equity. The engagement spanned 11 months, focusing on funding strategy, compliance structuring, and investor positioning.

The 5-Step R&D Funding Strategy by Prime PI

1. Comprehensive Funding Landscape Mapping

• Identified 35+ relevant grant and subsidy programs in India, Europe, and the US.

• Shortlisted opportunities under India’s BIRAC (Biotechnology Industry Research Assistance Council), EU Horizon Europe program, and US NIH Small Business Innovation Research (SBIR) grants.

2. Funding Application & Structuring

• Created tailored funding proposals aligning with eligibility criteria.

• Applied for Horizon Europe health-tech R&D grants (€2.5M) and NIH Phase II funding ($1.8M).

• Aligned applications with regulatory pathways for FDA and CE approvals.

3. Strategic Partnerships for Joint Funding

• Connected BioNexis with a Finnish research institute for joint R&D collaboration, increasing grant approval chances.

• Formed a consortium with two European hospitals to strengthen clinical trial funding bids.

4. Equity Preservation Plan

• Designed a balanced capital stack:

  • 60% non-dilutive grants & subsidies.

  • 25% strategic VC infusion with limited equity dilution.

  • 15% internal accruals and debt financing.

• Structured convertible debt instruments to delay equity dilution until valuation scaled.

5. Investor Confidence Building

• Created a non-dilutive funding tracker dashboard for transparency.

• Reframed the company’s pitch to highlight grant wins as risk mitigators, boosting investor trust.

• Secured letters of intent from strategic investors for future funding at higher valuations.

The Impact: Equity Protection While Accelerating R&D

Key Achievements

• Secured ₹210 Crores in non-dilutive R&D funding from BIRAC, Horizon Europe, and NIH grants.

• Reduced planned equity dilution from 35% to just 12%.

• Accelerated FDA and CE approval processes by funding regulatory testing without exhausting internal reserves.

• Established long-term partnerships with EU medical institutions, strengthening credibility.

Revenue & Business Impact

• Extended cash runway by 24 months, enabling uninterrupted clinical trials.

• Increased company valuation by 2.7x within one year.

• Attracted a strategic acquisition offer from a European med-tech firm at 4.5x higher valuation than pre-engagement levels.

• Positioned BioNexis as a global innovation leader while retaining founder control.

Conclusion: R&D Funding as a Catalyst for Growth Without Dilution

Through Prime PI’s R&D Funding and Equity Protection services, BioNexis Therapeutics transformed its financial strategy—unlocking growth capital without compromising founder ownership.

Three key lessons for medical product companies:

1. Non-dilutive funding is critical for capital-heavy industries like med-tech.

2. Strategic partnerships with research institutes enhance funding eligibility and credibility.

3. Equity preservation strategies strengthen long-term investor confidence and valuations.

By leveraging grants, subsidies, and strategic funding models, BioNexis scaled its R&D pipeline while protecting equity—proving that innovation and ownership can go hand in hand.