510(k): A premarket application made by a company or institution to the Food and Drug Administration (FDA) for approval of a medical device (most often class II, occasionally class I or III) based on a predicate device that has already been approved by the FDA. 

Academic entrepreneur: An academic who seeks to translate science and technology into health innovation by patenting or licensing their work and/or collaborating with industry to transform medicine. 

Accelerator: A program designed to help startup companies drastically increase their business scope within a short period of time. Through intense training and mentoring, accelerators help startups de-risk ideas and prepare them to pitch to investors. 

Angel investors: Wealthy individuals who use their personal assets to invest in startups, typically in early stages, before venture capitalists. 

Articles of incorporation: The legal document that establishes the existence of a corporation and outlines the type of corporate structure.   

The Bayh-Dole Act: A 1980 law that allows small businesses and nonprofit organizations, including universities, to commercialize inventions funded from federal research. The act requires any profit made from the commercialization of government-funded research by companies to be shared with the inventors. Also known as the Patent and Trademark Law Amendments Act.  

Biologics: Biological products usually derived from living cells and used in the diagnosis, prevention, treatment, or cure of disease. They may exist in the form of therapeutic proteins, monoclonal antibodies, gene therapies, or vaccines. 

Biosimilars: A “generic” version of biologics. A biosimilar is based on the reference biologic and is used to treat the same indications.  

Breakthrough device: A drug or device that is intended to treat a serious condition and for which there is preliminary clinical evidence indicating that the drug/device is better than any available therapy.   

Bridge loans: Short-term loans that last from a few weeks to a couple of years and which provide interim financing, pending the arrangement of a larger and longer-term financing agreement.  

Capitalization table (Cap Table): A list of shareholders and their relative share allocation. 

Class I device: A medical device that is low-risk but is still subject to general Food and Drug Administration (FDA) regulations to ensure continued safety. Regulations might include prohibition against misbranding, requirements for device listing and registration, and adverse event reporting standards. 

Class II device: A medical device that poses a greater risk than a class I device and therefore requires stricter Food and Drug Administration (FDA) regulation. Special controls for class II devices include labeling requirements, device-specific performance standards and testing requirements, and post-market surveillance programs.  

Class III device: A medical device that poses the greatest risk and requires regulations beyond general and special controls. Class III devices require premarket approval from the Food and Drug Administration (FDA), which involves the submission of sufficient evidence proving their safety and efficacy. 

Common stock: Stock that is issued to founders and employees, to be paid only after preferred stock is paid out.  

Confirmation bias: A tendency for individuals to search for or favor recall of information that confirms their independent preexisting beliefs.  

Conflict of interest: The presence of a risk for an undue influence on primary goals due to a secondary goal such as financial gain. The mere presence of the risk, and not the actual occurrence of the undue influence, constitutes a potential conflict of interest.

Conformité Européenne (CE): The mark given by the European Union’s regulatory body to certify that a product is safe and performs its stated function. 

Current Procedural Terminology (CPT): A coding system published by the American Medical Association (AMA) that establishes five-digit alphanumeric codes describing medical procedures and services performed by physicians and other healthcare professionals. CPT codes fall into three categories: category I, II, or III. 

De-risking: A process that involves the improvement of the technical, product, or business feasibility of a startup and thus increases its likelihood of success.  

Dilution: A process through which the percentage of the company owned by the founders decreases. 

Disruptive innovation: An innovation that creates a new market and network that eventually overtake established organizations. In healthcare, disruptive innovation is the process of making changes, whether large or small, radical or incremental, to products, processes, and services that result in the introduction of a novel medical solution. 

Drug: The Food and Drug Administration (FDA) defines a drug as any compound or biologic that “affects the structure or function of the body, without regard to whether the compound is intended to influence a disease process.”

Expansion funding: Second-stage funding from venture capitalists, usually after the initial round of funding from angel investors. 

Humanitarian Device Exemption (HDE): A regulatory pathway that can be used for devices that treat rare diseases (defined as fewer than 4,000 patients per year). The process requires less clinical data or proof of effectiveness than other Food and Drug Administration (FDA) regulatory pathways.  

I-Corps: A program developed by the National Science Foundation (NSF) where university scientists and students learn entrepreneurial skills that enable them to take their research beyond the laboratory and discover the commercial potential of their innovation.  

Incubator: A program designed to help startup companies build and refine their business model. Through offering resources, services, and mentorship, an incubator can help an academic entrepreneur or a startup transition from ideation to commercialization.  

Individual development plan (IDP): A web-based career-planning tool created by the American Association for the Advancement of Science (AAAS) to help graduate students and postdocs in the sciences define and pursue their career goals.

Intellectual Property (IP): Intellectual creations such as inventions, artistic works, designs, symbols, names, and images. IP is protected by law, including by copyright, trademarks, and patents. 

Intrapreneur: An academic physician-scientist who works within a larger organization to bring innovative ideas and solutions to existing problems. In the business world, the goal of intrapreneurship is to enhance the organization’s value, whereas in the healthcare world the ultimate goal of intrapreneurship is to improve healthcare value. 

Invention: A new composition, device, or process. To qualify for a patent filing, an invention must be useful, novel, and nonobvious. 

Inventor: A person who has contributed intellectually to the creation of a patentable invention. If there is more than one intellectual contributor to an invention, the inventors are known as joint inventors or coinventors. 

Investigational Device Exemption (IDE): An application process for obtaining Food and Drug Administration (FDA) approval to test a medical device in human subjects as part of a clinical trial to collect safety and efficacy data. IDEs are usually obtained to support a future 510(k) or PMA application.

Investigational New Drug (IND): An application process for obtaining Food and Drug Administration (FDA) approval to develop a new drug and conduct clinical trials. An IND is required for any drug, biological product, or device that has not previously been authorized for marketing in the United States. 

In vitro diagnostics (IVD): Assays or devices used to test human tissues or body fluids outside of the body, and to generate results for clinical decision-making in disease prevention, diagnosis, prognosis, or treatment. 

Market research: Primary data collection that is generally quantitative in nature, most typically performed via a survey instrument and employed to capture feedback specific to a new product or service concept.

Market size: The potential market for a new drug, device, or procedure, calculated as the number of affected patients multiplied by the severity of the disease. 

Medical device: The Food and Drug Administration (FDA) defines a medical device as “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory which is … intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.” 

Minimum Viable Product (MVP): A product with just enough features to meet customer requirements and provide feedback for future development stages. 

Mobile medical application: A mobile app that meets the definition of a medical device and is an accessory to a regulated medical device or which transforms a mobile platform into a regulated medical device. 

Need specifications: All the elements required for an invention to enter the market, including medical attributes, stakeholders, regulatory requirements, reimbursement, potential acquirers, and marketing. 

New Drug Application (NDA): The process through which a company or an entrepreneur formally applies to the Food and Drug Administration (FDA) for approval of a new pharmaceutical for sale and marketing in the United States.  

Nondisclosure agreement: An agreement between two or more parties not to disclose intellectual property and confidential information shared as part of doing business.   

Non-radiolabelled agents: Contrasting agents used for nuclear medicine/positron emission tomography (NM/PET) that don’t contain radioactive materials. 

Orphan drugs: Medicines or vaccines intended to treat, prevent, or diagnose a rare disease or condition (one that affects fewer than 200,000 patients in the United States).

Patent: The official grant of a property right to an inventor, issued by the United States Patent and Trademark Office (USPTO). A patent prevents anyone but the inventor from making and using the invention for a set period of time. 

Pitch deck: A slide deck that offers an overview of the company, specifically prepared for investor meetings. 

Preferred stock: Stock issued to outside funding entities rather than to founders and employees. Preferred stock is paid out before common stock.  

Premarket approval (PMA): The strictest Food and Drug Administration (FDA) device regulatory pathway, required for any device for which there is no existing predicate and for almost all class III devices, which are frequently life-sustaining or life-altering.  

Principal investigator: The lead researcher on a project and often the person who holds the grant for a federally funded project. 

Prior art: Any publicly available description, reference, or physical manifestation of an invention that serves as evidence that the invention is already known.

Program officer (PO): A staff member at the National Institutes of Health (NIH) who administers grant portfolios and can advise researchers on SBIR/STTR grant applications.  

Prototype: A mockup of the intended product that can be built in a short time with minimal effort. 

Radiolabeled agents: Contrasting agents used for nuclear medicine/positron emission tomography (NM/PET) that contain radioactive materials. 

Rapid prototyping/Rapid validation: A process of testing an idea as quickly and inexpensively as possible in order to gain insights early on about how to improve the idea and to save more time and resources for making these improvements.

Regulatory exclusivity: A type of government protection for a biologic against competition, granted by the Food and Drug Administration (FDA). 

Reimbursement structure: The process by which physicians and hospitals deliver products and services and then receive payment from third-party payers. Reimbursement consists of three factors: coding, coverage, and payment. 

Request for proposal (RFP): A document soliciting business proposals from companies for the development of a product or service. 

Runway: The amount of time a company theoretically has before running out of money, based on the rate at which it spends cash.

Scientific review officer (SRO): A staff member at the National Institutes of Health (NIH) who is assigned to a particular study section and can provide guidance prior to the submission of a SBIR/STTR grant application. 

Significant financial interest (SFI): An interest in an outside entity as a result of which an individual receives or holds the potential to receive financial benefit. 

Small business: A business employing fewer than 500 full-time employees. 

Small Business and Industry Assistance (SBIA): A department of the Center for Drug Evaluation and Research (CDER) whose mission is to help small pharmaceutical businesses and industry understand the regulation of human drug products, and to assist them in finding the resources they need to allow for an efficient IND application process. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs: A class of government grants and contracts provided to small businesses in order to help create companies, advance research, and bring products to market that address specific federal agency goals. SBIR and STTR grants are the largest source of seed funding in the world. 

Social entrepreneur: An entrepreneur who seeks to identify and bring about potentially transformative social, cultural, or environmental change by leveraging concepts employed in traditional entrepreneurship.  

Stakeholder: An individual or an organization with an interest in the outcome of a project or a business. 

Stanford Biodesign: An ecosystem for academic entrepreneurs to investigate and discover new ideas to effectively and efficiently address healthcare needs. Its systematic approach to innovation covers need specification, prototyping and testing, regulatory considerations, and reimbursement.

Technology gap: The market opportunity for introducing a new technology or the improvement of an existing technology. 

Technology transfer: The process of getting early-stage technology in the hands of the public, usually in the context of commercialization from research institutions to outside companies. 

Term sheet: A document generated by a venture capitalist (VC) summarizing the economic and noneconomic terms on which the VC is willing to invest. 

Theranostics: A process where a contrasting agent is used both for diagnosis and either therapy or guiding intervention to allow the personalized treatment of patients.  

Valley of death: A situation where advances in research have pushed new technologies into the realm of possibility, but the market pull is not yet large enough to sustain further interest. 

Value proposition: The particular value a company promises to provide to customers through its proposed product or service, including the specific ways it will address customer needs. 

Venture capital (VC) firm: A firm that consists of one or more professionals who invest third-party capital in development- or growth-stage companies.