Start to Partner at Digital RESI November

22 Oct

By Karen Deyo, Senior Investor Research Analyst, LSN

Partnering for Digital RESI November launches next week, giving registered attendees access to RESI’s unique partnering platform. This platform allows attendees to filter search results with a high degree of precision.

At RESI, unlike other conferences, requesting a meeting with an investor does not require a company to spend most of the initial meeting finding out if they are a fit for the investor or not. Companies can easily winnow down to a list of investors who are interested in their sector, indication and stage of development before requesting a meeting, making it easier for them to identify investors who are a fit for them. Investor profiles are written by Life Science Nation (LSN)’s Investor Research team in a phone interview with each investor, as a requirement before registration.

With our transition to virtual events, the RESI Partnering Platform now has an integrated video conferencing system, allowing companies to simply log in to the platform and initiate their meetings through their schedule. Make sure to look at the tutorial video below, to see all the features offered by our system!

PARTNERING TUTORIAL

Digital RESI November partnering launches next week, but you can still sign up for the conference, taking place November 17-19, 2020 by visiting www.resiconference.com.

An Interview with CSC Leasing on Their Custom-Built Leasing Solutions

22 Oct

Ryan Magner

An Interview with Ryan Magner, Regional Director, CSC Leasing Company

By Ashley Zborowski
Director of Business Development, LSN

As a sponsor for both Redefining Early Stage Investments (RESI) and 4D Meets AI, CSC Leasing’s Ryan Magner chats with Life Science Nation (LSN)’s Ashley Zborowski about their firm, vision, and practices around equipment leasing to early-stage companies in life science, and what makes them unique in the market.

Ashley Zborowski (AZ): Please introduce your firm, product and marketplace.

Ryan Magner (RM): CSC Leasing is a boutique family-owned equipment leasing company based in Richmond, VA, serving clients across the US and internationally. In our 35 years of business, we have financed nearly $1 billion in transactions. Our foremost goal is to help companies obtain the equipment they need to achieve their goals, at the lowest possible cost. We do this by providing innovative and competitive leasing programs—which are flexible and tailored to meet the unique needs of our clients—always with a focus on the long-term relationship. Our core business is serving emerging growth companies in life sciences with a focus on seed stage to early institutional investment rounds. Since our portfolio is owned, capitalized and managed solely by CSC Leasing, we can be agile, flexible and efficient. Clients will always work directly with our team throughout their lease term.

AZ: Why is leasing so important to early-stage firms?

RM: For early-stage firms, preserving cash and raised investor equity dollars is always paramount. By helping early-stage companies finance their equipment purchases, they can extend runway and preserve cash for higher ROI activities. Leasing is a non-dilutive vehicle which is important to many companies that are seeking financial partners. Establishing a leasing agreement is also traditionally easier to obtain than traditional lending which can require more substantial business requirements and milestones.

AZ: You seem to equate leasing with funding; can you explain that?

RM: Like equity funding, we are putting our own capital to work for a company, but it is in the form of equipment procurement vs. a direct cash injection into a business. In the case of a sale leaseback transaction for existing assets already purchased, we can help companies get cash back on their balance sheets as well. Many companies chose to establish a lease line of credit with CSC to compliment other sources of funding in order to reduce or eliminate the need for substantial one-time cash outflows for depreciating assets.

AZ: Do you have a process for assessing a client’s needs? How does that work?

RM: Always an introductory call and/or meeting to introduce CSC and learn about their company and what they are trying to accomplish by leasing equipment. After gathering some initial information, we will begin a customary due diligence which requires the same types of information many companies will have provided to equity investors or for grant funding. Depending on the size of the transaction, we can typically turn around a term sheet proposal within a week or two, sometimes requiring another round of due diligence for asks over $1M. Our credit committee meets five days a week and we have invested in expanding headcount there, so we’re able to turn around decisions much faster than others in the non-bank financial services space.

AZ: Can you please describe what a perfect life science firms looks like to your leasing firm?

RM: Like many equity investors, we will be looking at the team, technology, financials, runway and who the other investors are. We pay particularly close attention to the equipment and financials, so being organized around providing all the required information up front will expedite the process. We typically like to see 12+ months of cash on-hand but can sometimes get comfortable with less if there are additional upcoming grants, financing rounds or highly desirable equipment. Having experienced founders with a track record of building successful companies or substantial domain expertise is important, as well.

AZ: Tell me more who is a perfect target for your leasing service? Could you give us some examples of life science clients you are now working with and what the deals looked like and how they grew?

RM: We take as much pleasure in helping a company preserve cash to get to their Series A round as we do in working with companies all the way up through an IPO. Our portfolio of life science clients includes companies that have raised hundreds of millions of dollars through name brand VCs, as well as emerging growth companies that have raised from friends and family. Unlike many others in the space, we’re willing to finance smaller transactions to first build the relationship and trust, with the goal of creating a longer-term partnership. Recently, we were able to approve a $10M sale leaseback for existing equipment to a leading therapeutics company in Cambridge to help them preserve cash as they worked towards Series C milestones and eventually a successful IPO. On the emerging side, another start-up therapeutics company in Cambridge required $500K in new equipment for a lab build-out after raising their Series A and not wanting to use fresh equity dollars for constantly depreciating assets.

AZ: It sounds like capital-intensive start-ups are your best customers; can you talk about the market segments these clients are in?

RM: While life science has always been a target market due to the high-capex nature of the industry, other industries like food and beverage, technology, and manufacturing and logistics have proven to be a stable client base for us, given their demand for equipment leasing. With regards to the segments within life sciences and biotech, we are commonly working with R&D-stage therapeutics companies, pharma manufacturing, 3D bio printing, shared lab space, and medical devices, to name a few. Ultimately, we are unique in that we are working with companies that are likely going to run out of cash at some time during the lease, so we are trying to identify clients that have a high likelihood of being able to raise the next financing round, or in the case of revenue generating operations, achieve profitability.

AZ: Why do you remain vendor-agnostic, as opposed to selecting the best-of-breed and staying with them?

RM: Due to the asset management nature of our business—as it’s our only collateral—we have expertise in many types of equipment, however we always let our clients determine what is the best type of equipment for them. We then simply take the purchase orders negotiated by our clients, which often can include discounts, and execute them on their behalf. Additionally, we are also able to look at used equipment purchases as a way for companies to recognize further cost savings. CSC can be additive to the procurement process via our lease administration team, and handle logistics like ordering, shipping and helping with tax exemptions for R&D.

AZ: Do you purchase and then lease, and how do you determine how to take that risk?

RM: Yes, we purchase the equipment on behalf of our clients after getting the umbrella master lease in place. There is always the risk working with early-stage companies that things won’t go according to plan and we will have to take delivery of the equipment back to our warehouse. At that point, we try and remarket the equipment using various channels in order to recoup some of our investment, which can help mitigate the risk. With that being said, one of the benefits for our clients is that CSC is not only a family-owned business, but we’re not a broker and we hold our own paper. As a non-bank leasing company, that gives us flexibility to say yes when others say no and look at our client base through a long-term lens. We saw it very recently during COVID-19 that companies couldn’t get into their lab spaces or accomplish milestones according to plan, so that required some restructuring of lease agreements and trying to be a partner to our clients during a really difficult time, which we hope is mutually beneficial in the long term.

AZ: Why do you refer to your service as non-dilutive capital when you are a leasing firm?

RM: Many early-stage lenders have what is called a warrant component to their terms. That means that at some point in the future, the lender will be able to claim a negotiated portion of equity in the business, which is dilutive by definition. While CSC is not a traditional lender in that we are leasing the equipment to our clients, we are still putting our own capital to work in order to purchase those assets in place of the company, all while being able to do it with a cleaner financing that requires no warrants.

AZ: How do you help an early-stage company with financing?

RM: Due to our structure and comfortability in the early-stage space, we can extend financing to many companies that will not qualify for traditional bank loans or vendor financing. If our capital allows a company to extend their runway, meet milestones and successfully raise the next round of capital from institutional investors, that is a mutually beneficial result. When we invest our own capital into a business, our interests will always be aligned with theirs—we don’t succeed unless they do. Additionally, if we can be helpful in using our network of clients and investors in life sciences for references or to make introductions that could influence a future financing round, that would be added value we strive to achieve.

AZ: Do you have a message for our readers about your firm?

RM: At CSC, we are always willing to speak with founders or companies that would like to learn more about equipment leasing before beginning a process with us. We also have no problem spinning up a deal to arrive at indicative pricing so you can evaluate if it makes sense for your business. We’ll be the first to tell you if we think we’re not the best fit for helping you achieve your research and development goals and will always try to point you in the right direction. Please don’t hesitate to reach out! To learn more about equipment leasing, you can contact Ryan directly at rmagner@cscleasing.com.

To learn more about 4D Meets AI and sign up for the early bird rate (until October 24), visit www.4dmeetsai.com.

Introducing Longevity, Health & Innovation Panels

22 Oct

By Rory McCann, Marketing Manager & Conference Producer, LSN

Longevity, Health & Innovation, the newest partnering conference from Life Science Nation (LSN) and Mary Furlong & Associates, brings early-stage companies together with investors and strategic partners to network and start relationships around the needs and trends of the longevity market. View our panels of market experts and investors leading the conversations toward innovation.

You can learn more and sign up at the super early bird rate (until October 24) by visiting www.longevityhealthinnovation.com.

Hot Investor Mandate: Venture Arm of a Global Innovation Group Invests in Early-Stage Biotech Companies Across All Indications

22 Oct

A firm founded in 2018 invests in early-stage biotech and pharma companies. The firm invests in seed to Series A investment while it can also provide later funding (follow-up investment). The firm also seeks to In-licensing and NewCo spinout for later-stage research projects. The firm also has 30,000+ square feet of chemistry/biology incubator space in the USA. The firm also shares the same investment philosophy with its parent company, a global innovation incubator and investment group supported by Chinese partners.

The firm mainly looks at the biopharmaceutical industry. The firm prefers to work closely with scientific innovators to advance discoveries rapidly through key value-inflection points.

The firm does not have specific company requirements.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

Hot Investor Mandate: Western Europe VC Firm Seeks Opportunities in Unmet Need Therapeutics, Diagnostics, Devices in Early Stages of Development

22 Oct

A newly established venture capital firm headquartered in Western Europe leverages the experienced resources from a dedicated life sciences consulting firm (a separate entity), and is able to invest in and support in early-stage technologies with a derisked strategy. The firm has a pan-European focus and is sourcing globally within industry, start-up communities, and business accelerators, for high potential opportunities.

The firm is interested in proprietary, differentiated therapeutic products addressing high-unmet medical need and platform technologies supporting next-generation patient diagnosis, treatment and disease prevention. The interest areas also include genomics, AI, diagnostics, medical devices, rare diseases, next generation personalized medicine, and more. The firm is interested in early-stage opportunities – pre-clinical assets with a valid proof of concept, devices with a working prototype are all good fits in terms of stage of development.

The firm will look at each opportunity carefully, and is most interested in those with business potential with a 3-5 year runway to strategic partnerships, acquisition by large life science companies or an IPO. The firm will prefer to lead investments and will take a very active role in their portfolio companies, often being involved in the operations of these companies to support their growth and enabling research that generates important, proof-of-concept data.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

Hot Investor Mandate: USA Venture Capital Firm Invests Up to $5M in Novel Digital Health Technologies in USA & Canada

22 Oct

A USA-based venture capital firm with a single LP looks to make growth-stage investments in the form of preferred equity, ranging from $1M-$5M initially, with additional capital reserved for follow-on financings, typically up to $10M over the life of the investment. The firm usually leads rounds, but is also open to syndicating with other investors. The firm looks to do 2-4 deals a year, and invests in U.S. and Canadian companies. Prospective companies may have some business overseas as long as they are headquartered in the U.S. or Canada.

The firm makes about one-half of its investments in healthcare, and is open to any healthcare companies that do not require FDA approval for their product/service. However, the firm focuses on B2B-oriented healthcare services and healthcare IT solutions. Some of the firm’s recent healthcare investments include a mobile telemedicine triage service company that provides mobile diabetic retinopathy eye exams as well as an EMR system to help orthopedic surgeons increase productivity.

The firm typically looks for growing companies with a run rate of at least $1M or a signed contract that would put them at a $1M run rate. The firm has no strict requirements in terms of management team, and will work with first-time entrepreneurs. The firm looks to take a board seat along with an investment.


If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

Hot Investor Mandate: USA Investment Firm Looks for Seed & Venture Stage Medical Device & Diagnostics Companies in North America, With West Coast USA Focus

22 Oct

A venture capital firm based in the USA has raised 3 funds to date and is currently investing out of its 3rd that closed at $20M. The firm makes primarily equity investments ranging from $250,000 to $5 million over the lifetime of the investment, with $100K-$500K as an initial investment. The firm has close relationships with several large Japanese medical technology corporations and also looks for ventures that they can introduce into the Japanese market. The firm prefers to invest in companies located in the West Coast if the US, although they are also open to review opportunities in North America.

The firm is looking for seed and venture-stage medical and diagnostic device companies. In these areas, the firm is most interested in single use therapeutic devices. The preferred regulatory pathway is a 510(k) submission, but PMA applications are also considered. Sectors with the most interest would be interventional  cardiovascular and neurovascular devices, less invasive surgical instrumentation, and point of care diagnostics. The firm remains open-minded to other types of devices and indications as well.

The firm looks for professionalism in a venture’s management team and is willing to work with firms that do not yet have a complete management team in place. The firm does not always look to take a board seat in portfolio companies, however they look to add value by developing corporate partnerships in Japan at the appropriate time.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

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