My Library and Courses
Last Update: Saturday September 18, 2021

Key Idea: Raise Money The Old Way

At the beginning stages of Biosite, the need for rapid testing was laughed at by the big boys in the diagnostic industry. This fact would have made getting a bank loan impossible.

Key Question:


Even if the founders put up their homes as collateral, bankers would turn to the institutions who owned the market for their research to corroborate the validity of the plans placed before them by Kim, Ken and Gunars. Bankers do not take big risks. They only take little risks. The bankers would have discovered that these three were renegades and would have passed on the opportunity to loan them money.

Q: What do you think we mean by the phrase, "Raise money the old way?"

A: Yes, get your money from family and friends. These three got it from friends who were former colleagues. The best part about this story is Kim, Ken and Gunars not only are productive and smart they happen to have friends who  understood their idea on a deep level and they just happened to have several million dollars available to risk in this investment.

You might be surprised if you look around your own industry to find people who have already made it big and who are willing to help you go to the next level.

Questions for this clip: 1 | 2

Think about it

What would you do with an infusion of cash? Do you have a growth idea that is investment worthy? Who do you know who would understand your idea?

Clip from: Biosite is helping to save healthcare.

San Diego: Early insights by three people, Dr. Gunars Valkirs, Kim Blickenstaff and Dr. Ken Buechler, opened the way to develop devices that are now used virtually every second of a day to aid hundreds of thousands of emergency medical technicians, nurses, doctors and patients to diagnose medical conditions faster and more accurately. In this episode of the show, you will see their little device, Biosite Triage® for rapid diagnostic testing, in action.

When they had the idea, everyone told them, "You're crazy. No way! It'll never work." 

They began their business in 1988. Today, it is a global organization with annual revenues over $250 million. And it is all based on a product line that never ever existed before they created it. The firm's first product, The Triage Drugs of Abuse Panel, was cleared by the U.S. Food and Drug Administration (FDA) in 1992.

They didn't stop there. They now test for congestive heart failure, heart attack, and a long check list of diseases with very strange names. Beyond their unstoppable energy and passion for continued research and exploration is the belief that their success to date does not begin to scratch the surface of the potential of diagnostics. Here you look into the heart of creativity.  

Editor's Note:  Since this episode was taped, Biosite was purchases by Innverness Medical Innovations.

Go to all the Key Ideas and Videos of this episode...   
Go to the homepage for this episode...   

Biosite, Inc.

Kenneth Buechler, co-founder, President, Chief Scientific Officer

9975 Summers Ridge Road
888.BIOSITE (Customer Service)
San Diego, CA 92121

Visit our web site:

Office: 858.805.8378

Business Classification:

Year Founded: 1988

Raise Money The Old Way

HATTIE: How did you get people to give you money?

KIM: Well we were lucky. Two of the senior folks at Hybritech, Ted Greene and Tim Wollaeger, went off and raised money to have a fund called Biovest.
We really didn't have a solid business plan. They knew us, they had seen what we had done within Hybritech, and they thought oh boy the chance to get those three guys back into a lab somewhere excited them. So the way we did the deal was, they gave us a half million dollars, I think they had 6 million total, so they wanted to have half in the first round and half in the second round. And basically, we rented an office space to write that business plan and set out to work on the product idea that we come up with.

HATTIE: So they bet on the horses, not the document.

KIM: Oh absolutely. The document was pretty ugly.

GUNARS: So the real struggle came after we finished the proof of principle, how do we get enough money now to develop the product. And that's where we had to go to the outside venture capital community and that was a very difficult and torturous process.

The first opportunity we had identified really was that there was no rapid way to do a test for drugs of abuse in the hospital. So this isn't really what you would call employment screening, it's to determine whether a patient that arrives in the Emergency Department is in some way compromised by an overdose of either elicit drugs or of prescription drugs. And so that was the first idea and that's what we completed in 1992. The product came out in 1992.

We were profitable at the time and we decided to reinvest a lot of our resources back into a larger scale research and development program. There are several rounds of venture capital financing. None of those rounds were very large for us, so we had to continually prove progress toward the goal of developing this product. Plus we had to bolster our market research so we could prove to our investors that when this product is ready, yes there is a market for. It's big enough to be interesting to you and so you should give us some more money. Continue to give us venture-capital money until we're able to get the product on the market.

I think it took a total of about $21 million in investment before we got the product on the market. So the venture capitalists really cashed out in 1997 when the company went public.

HATTIE: OK so from 1988 to 1987, they sat with you?

GUNARS: That's right.

HATTIE: How did you keep them happy?

GUNARS: Well you continue to make progress, you become profitable so they don't have to inject money into the company anymore. They feel at least comfortable that you're building value.


Not a member yet? Learn!  Be empowered! Join us!