Most small med-tech companies we’ve encountered talk fondly, even wistfully, of non-dilutive funding. And why shouldn’t they? Non-dilutive capital is every start-up CEO’s dream – free money, right? So, what’s the downside? There is indeed very little downside if the granter of the money says, “do whatever you want with it.” Witness the recent tax credit many companies in Massachusetts just received (equally, in odd-numbered sums that temporarily reduced many burn rates, yet made no one feel special). There’s just nothing wrong with that kind of cash.

But, in many cases, the non-dilutive genie grants three wishes: one wish belongs to the company and the other two belong to the genie. As companies contort and stretch their research aims, however subtly, to fit the RFP, they begin to stray from their core product development program (a.k.a. the reason for their existence and the purpose for which they received dilutive capital).

So, your mission may be to develop the newest and coolest coronary stent, but when some farming organization comes along and offers “free money” if you can adapt your stent to revolutionize cow milking, it is hard to resist. Squint a little and you start to see the synergies, the fundamental and uncanny similarities, between the human vasculature and the bovine teat. Why you never saw this connection before is the real question! Of course, the R&D powering the “coro-dairy” stent program will shave years and millions of dollars off my core product development path, right? Wrong.

Now you have entered the danger zone. Moving from agricultural to sports analogies, Terry Francona asks the Red Sox to train for baseball, however, he doesn’t demand that the team devote 20% of its training effort to mastering cricket as well. There might be some crossover between cricket and baseball skills (beyond the quaintly archaic uniforms), but more likely such a plan would have the Red Sox wondering why they haven’t sniffed the series for another 86 years.

Remember, most startups only get one, or, if they are lucky, two shots on goal to create value (sports metaphor usage is in overdrive now, and we aren’t done yet). Lining up those shots with laser-like precision, and then executing the hell out of them, should be a start-up’s job #1, 2 and 3. Taking on research projects that distract the company from that focus can be a detriment to ultimate success.