Archive | June, 2015

Family Offices and Walled Gardens

25 Jun

By Dennis Ford, Founder & CEO, LSN 

Dennis book

The LSN mantra is that raising capital is a numbers game.  To succeed, you must find investors that are a fit for your product and stage of development, go global rather than restricting yourself to your local region, and target all ten categories of early stage life science investor rather than restricting your view to one source of capital.

Every few months it seems that someone in the investment world has an epiphany that they must create a global family office network. The idea always seems compelling and usually involves a plan to sponsor small, intimate conferences that target companies seeking investors. The network creators begin courting the venture community and healthcare CEOs with descriptions of the family offices that allegedly bought in and will attend these conferences — and the price to appear at them is often  a lot of money. The attending fundraising CEOs theoretically benefit from getting in front of the new hot category of investor, and it’s suggested that the family offices will participate in such a small meeting in return for the chance to trade strategies, tactics, and evaluations with other similar entities.  This model and concept is all about getting special access, which sounds almost too good to be true…right?

Having been involved in capital fundraising for decades, I have seen this model surface countless times. Many of these family office networks can provide examples of the allocations and partnerships their network has generated; the question is how many and how much?  This model has been called a “walled garden” because of the illusion it perpetuates of a bevy of family office players  banding together in a closed, almost secret network who can be accessed by paying a fee for a chance to connect with the  right contact. While these networks may include at least a handful of contacts with whom a dialogue can be established, I have yet to encounter a walled garden family office firm that employs any research staff to track what the family offices’ investing interests are. This is an absolute necessity for staying up to date on investment mandates, which are ever-changing—without accurate data and an understanding of the possible fit between your company and the investor, contact information has tenuous value.

Additionally, most family offices (institutions with over $1 billion in assets under management that form one of the categories of investors that LSN tracks) would rather not be a part of any organization that would compromise their anonymity; these firms are well known for a predilection for stealth mode and a preference for flying under the radar. Because they have access to large sums of capital they do not need to form syndicates, so have little to gain from the walled garden model.  As for the opportunity to share information and strategies behind a virtual secret wall, family offices already source from each other and don’t need third parties or service providers to facilitate this. Also, while syndication does occur regionally and within close networks of like-minded family offices, it doesn’t seem relevant on a global scale simply because of the low ratio of family offices to fundraising CEO’s. The larger Family Office conferences can be useful to fundraising executives, offering the possibility of contact with a handful of family office representatives, but these bigger venues  are primarily populated by family office service providers who are also being charged high fees to attend.

LSN tracks 970 family offices globally, has identified 180 as private life science investors, and has forged a deeper relationship with 70, which use LSN as a trusted sourcing vehicle. This is also true of the other nine categories of investors that we track. Many family offices see us as a trusted source that has proven our worth and provides a compelling and augmenting service offering that can be vetted quickly for no cost. But we recognize that focusing too much on one category of investors, especially a group like family offices, can be counterproductive, which is why over three years we have built up a true global network of over 5000 early stage investors covering ten categories.

RESI@TMCx Biotech Family Office Panel

25 Jun

By Michael Quigley, Director of Research, LSN

mike-2Earlier this month Life Science Nation’s RESI Conference at the TMCx in Houston was home to a panel of representatives and experts in the Family office world who spoke to how their groups go about sourcing and making investments in the therapeutic space. Key topics discussed include the position of family offices in the investment ecosystem, the differences and similarities between family offices and other investors, how family offices go about identifying opportunities, and what these particular groups are looking for right now.

Click on the video below to hear the views of these family offices speaker for yourself.

LSN Summer Reading Series Chapter 5: “Knowing Who and What You Are, and Where You Fit”

25 Jun

By Shaoyu Chang, MD, MPH,  Senior Research Analyst, LSN

Shaoyu 10*10In this latest edition of the summer reading series, we will be explaining the importance of understanding where your opportunity fits within the marketplace. Knowing who you are and how you compare with other companies in the space is crucial in determining the investors to whom you should be reaching out, what you should be highlighting in your marketing materials, and, in some cases, whether you need to “pivot,” or change, your commercialization plan.

Chapter 5 of The Life Science Executive’s Fundraising Manifesto, “Knowing Who and What You Are, and Where You Fit,” discusses how to define yourself and your market, as well as the importance of being able to pivot after receiving feedback and how to identify when it is strategically relevant to do so.

Click here to download/print the PDF.

We hope this text proves to be informative. Join us next week for Chapter 6: “Branding and Messaging”, for some tactical tips on how to build a brand for your company.

Enjoyed the preview? Buy now from Amazon.com or Barnes & Noble

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Hot Life Science Investor Mandate 1:Hong Kong Based PE Firm Looking Globally for Life Science Opportunities

25 Jun

A global private equity firm with bases in Hong Kong and the United States is primarily focused on healthcare investments with a particular interest in the life science space. The firm looks to make allocations ranging from $250,000 as the first round in a tranched financing structure to $20 million over the lifetime of the investment and depending on the financial needs of the company. The firm is actively seeking new investments and is open to review opportunities from around the globe.

Within the life science space the firm is interested in therapeutics, medical devices, and diagnostics. The firm is currently most interested in companies with some clinical data however they are open to reviewing pre-clinical stage opportunities as well. The firm is open to biosimilar and repurposed assets, and has a preference for platform technologies but is also open to considering single asset opportunities. The firm is open to review all classes of medical devices and diagnostics. The firm is entirely open in terms of indication.

The firm is open to investing in both private and publically help companies and is currently very interested in making cross over investments. The firm is also very interested in companies that have a plan or ability to enter the Chinese market as the firm can add significant value with this strategy. The firm is open to acting as both a lead and co-investor.

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

Hot Life Science Investor Mandate 2:Corporate Venture Capital Arm of Global Pharmaceutical Company Seeking Preclinical/Phase I Therapeutic and Platform Opportunities

25 Jun

The corporate venture arm of global pharmaceutical company based in japan is looking to provide equity capital to seed and venture stage companies in the life science space. The firm is looking to provide companies with as much as $5 million over the lifetime of the investment and plans on making 2-3 investments over the next year. The firm will invest in companies located anywhere around the world.

The firm is currently looking for companies developing Therapeutics and Platform Technologies. The firm is looking for companies in this sector working with small molecules, vaccines and biotherapeutics. Indications of interested include nephrology, cardiovascular, immunology, inflammation, stroke, metabolic disease and the firm is especially interested in companies working with therapies for CNS disorders and orphan indications. Ideal companies will have assets either in preclinical stages or in Phase I of clinical trials.

The firm strongly prefers that the company has a strong management team with experience in the industry. The firm is looking to allocate to companies that will eventually be able to partner long term with its parent company.

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

Hot Life Science Investor Mandate 3:Family Office Seeking Innovative Therapies Targeting Cystic Fibrosis

25 Jun

A family office investment firm based in the Eastern United States specifically focuses on therapeutics for Cystic Fibrosis, including Adult Stem Cell Therapy. The firm manages an evergreen fund and can provide between $200K and $1M in equity per company. The firm has no specific requirement regarding where the company is located and is actively seeking new investment opportunities.

The firm is interested in all therapies for cystic fibrosis, including adult stem cell therapy. The firm looks for early-stage companies with products in pre-clinical or clinical development. Therapies for cystic fibrosis may include antibiotics, anti-inflammatories, airway surface hydrators, CFTR-modulating treatments, and others.

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

Hot Life Science Investor Mandate 4:Family Office Seeking 510k Devices in Eastern US

25 Jun

The operational and investment arm of a family office is looking to make equity investments into early stage companies and small mid-market growth companies ranging from $.5 to $1 million. The firm is very open to syndication particular with early stage deals and is capable of providing additional capital in follow on rounds when appropriate. The firm prefers to invest in companies located in the eastern United States and looks to make approximately 1-2 new investments per year.

The firm is looking for companies in the Medical Technology and Diagnostics space. Within these areas the firm is looking for 510k devices that are more technically based with a particular interest in hospital equipment and professional diagnostics. The firm is not interest in devices where the final consumer is the patient. The firm is looking to devices that improve the standard of care and is willing to invest in companies at all phases of development. The firm is generally open to all indications.

The firm looks for experienced management teams and looks to take a board seat following investment. The firm is willing to work with companies that have incomplete management teams and is looking for privately held companies.

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