Validating the Importance of a Global Target List

1 May

By Alejandro Zamorano, VP of Business Development, LSN

Alejandro 10*10

One of LSN’s Investor Platform clients recently provided some insight on his fundraising campaign. We encourage feedback from our clients as it helps us to validate our methodology and to integrate improvements into our product. Our client is a molecular diagnostics company looking to raise $3 million to $8 million to expand and perform some key clinical studies.

We first met the co-founder a few months before he elected to subscribe to the LSN platform. At first, like many emerging biotech and medtech entrepreneurs, he relied on the executive team’s personal network and referrals to find potential investors. He had a relatively large pre-existing network of almost 72 identified investor targets; thus, he felt that he did not need any additional help. The concept of “fit versus referral” was clear to him, but nevertheless, he felt sufficiently armed to pursue the campaign under his own steam.

In his first few months of fundraising, he reached out to his network and received responses from 36 of his prospects. He was then able to convert 25 of those responses into meetings, of which 11 remained interested in continuing the dialog. Despite his initial success, he soon hit a wall and was left waiting as his investor prospects began discussions internally. Weeks passed and investors delayed their decisions. It became apparent that in order to master the numbers game, he would need more prospects that were strong fits for his particular company. Before long, he resurfaced to LSN and elected to subscribe to the investor platform.

In the first 90 days of using the LSN Investor Platform, LSN was able to help this client identify and reach out to a global target list of 148 potential investors outside of his network. With the help of a clearly defined campaign strategy, and armed with all of the necessary cloud infrastructure to run an effective campaign, he was able to get 38 positive responses from investors he had previously not known about. He was then able to convert 17 of those responses into meetings, of which 9 were interested in continuing the dialog.

By expanding his list of qualified fits, our client was able to triple his meetings and double his investor conversations. He remains in negotiations with 20 investors currently. This is a shining example of why it is important to contact investors outside of your network and not to exclusively rely on referrals. Moreover, it shows that the same result could have been achieved in half the time, had our client started his campaign using the LSN Investor Platform form the outset. It all comes down to finding the maximum number of prospects and tactically working those leads into a handful of relationships that ultimately end in allocations.

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