Fascinated by science and the son of two medical doctors, Justin Barlow demonstrated a passion for scientific research and a desire to discover new drugs since he was a child. Upon completing his Ph.D. in biochemistry from the Harvard University at the age of 28, Justin accepted a position as a quality-assurance scientist with Benson Labs, a chemical manufacturing company that provides basic chemicals to pharmaceutical companies.Benson also serves as an outsourcing agent to manufacture over-the-counter basic chemical drugs such as acetylsalicylic acid and simple prescription drugs such as Levothyroxine. Although Benson maintains a small R&D group that focuses on product enhancement and quality improvement, they do not invest in fundamental research that would lead to new drugs.

Although the job at Benson provided Justin with a nice salary and offered excellent career opportunities, it did not provide him the opportunity to pursue his dream of discovering new drugs.Thus, his passion for drug discovery led him to conduct his own research at nights and on weekends in the lab at his parents' medical practice.He focused his attention on producing a drug that could better treat type II diabetes.Unfortunately, two years of hard work did not result in a promising avenue for an effective treatment.However, he had observed that one of his drugs appeared to slow the aging process in laboratory mice, an observation that he confirmed with subsequent controlled tests.He realized the potential for a huge quality-of-life drug.If he could replicate his success in humans, a person in their eighties could have the body and appearance of someone in their twenties!

Having worked as a part of bio-tech drug teams in graduate school, Justin realized that he would need at least $20 million in capital to further develop the drug, obtain a patent, complete the testing required for phase I, phase II, phase III clinical trials, and obtain FDA approval to bring the drug to market.Through one of his former professors, he arranged a meeting with Joe Init, a partner in a local private equity company, Init, Tumake, Money & Associates, LLC (ITM), who had experience funding bio-tech startups.Joe expressed an interest in Justin's drug, but he wanted half ownership in the company and would agree to supply only $500,000 seed money at the present time.Joe indicated that he would supply larger amounts of capital only if Justin achieved a series of increasingly challenging benchmarks.Justin was disappointed to give up so much ownership of his "baby" and realized that the phasing of investment would slow down his envisioned path to the marketplace.Having no other options, however, Justin agreed to Joe Init's plan

Why does Joe Init want to limit his capital investment at the beginning and phase it in over time only as Justin achieves certain benchmarks?

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