Archive | July, 2015

Winning Your Next Stage Investment—One Competition at a Time

30 Jul

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

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There’s no shortage of competitions for life science entrepreneurs to enter. Whether it is a grant submission on a website, a display in an exhibition hall, or a 10-minute pitch on stage, there will be opportunities to use your branding and messaging collateral to reach an audience. However, it takes a well-organized package of information to win access to these opportunities.

While screening applicants to the RESI Innovation Challenge, I’ve observed that many companies make similar mistakes. In this article, I’d like to offer some tips for making the most of these opportunities while avoiding common pitfalls.

Explain science in simple, clear language

What factors will make your new product stand out from other “exciting one-of-a-kind therapies”? Entrepreneurs may have the most cutting-edge, complex technology, but many of them fail to describe their science in plain, understandable English. You description should be clear and concise while providing your unique value proposition. Do not be afraid to take a deeper dive in the mechanism behind your invention, what cellular pathway does your compound affect? How does your device work on the target organ? Remember how you deliver your message and explain what you do shows how what a good investment candidate you are.

Instead of making a nonspecific claim, such as “our device has convincing validation,” applicants can make a stronger case by providing supporting facts, such as “our non-invasive device can measure blood pressure within ±3 mmHg error margin” or “data from our small mammal studies has been published in peer-reviewed journals.” Keeping in mind, there should be a balance between being specific and being overwhelmingly technical. It is not easy to fit your full scientific discovery story into the 500-word limit; however that is precisely the challenge you face when you enter the sales and marketing domain and want to raise capital.

Stand out from the crowd

In the early stage life science investment world, many potential scientific breakthroughs are competing for the same pool of funding. It’s important to put yourself in the investor’s position and think about the factors that make your company a unique opportunity to deploy capital.

What factors will make your new product stand out among 20 other “exciting one-of-a-kind therapies”? It could be that the product serves a large patient base with a significant unmet medical need. Or perhaps it’s a solution for a niche population that would qualify for orphan status and potentially accelerate your path to market. Other factors that LSN has seen raised by strong contenders in the RESI Innovation Challenge include good patent coverage, cost-saving propositions for healthcare providers, and the potential to save the lives of patients in need. Be sure to state the reasons why your opportunity is outstanding.

Explain the timeline to market

Many entrepreneurs fail to provide a detailed, realistic development timeline. This is a critical element as investors use it to assess entrepreneurs’ understanding of the R&D process in their technology sector and their ability to allocate funding properly.

Highlight your business successes

When providing management team bios, most scientist-entrepreneurs have little difficulty in describing academic credentials, from faculty positions to publication records. However, applicants often neglect the business aspect. Investors want to see a team that is able to work together, negotiate with external partners and next-round investors, and bring the product through the regulatory process. Entrepreneurs should highlight expertise in such areas or set up plans to recruit these experts.

Similarly, collaborative relationships with prestigious research centers, pharmaceutical corporations, or strategic partners act as indicators of endorsement and validation. Don’t forget to highlight these markers of your business acumen.

Make sure your marketing collateral is clear and available

Furthermore, our scientific team looks at the clarity of the application material and also the availability of supporting publications, including on your company’s website, because these materials reflect the overall quality of an entrepreneur’s presentation. Many investors in the life sciences sector are well versed in the industry, and have extensive background knowledge and research skills. A company unable to provide supporting materials online is at risk of being screened out by an investor in the initial stages of the investment process.

Past winners of the RESI Innovation Challenge have demonstrated that a good branding and messaging strategy not only helps entrepreneurs excel in start-up competitions, but also opens doors to partnerships and investments critical to their businesses. If you are interested in showcasing your innovation at RESI, please submit your application here.

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Corporate VC Investors Sharing Tips of Their Trade at RESI

30 Jul

By Lucy Parkinson, Senior Research Manager, LSN

lucy 10*10At RESI @ TMCx, LSN turned the spotlight on corporate venture capital for an hour-long panel session. Six experienced corporate venture capitalists explored key issues that they face when engaging with startups. Panelists were asked if their firms invested with the intent to own a company, and what term sheet provisions might make it impossible for a corporate VC to invest. The panel also tackled the thorny question of valuation, and of how early it was possible for them to invest in a biotech company. Finally, the investors spelt out their internal processes and areas of focus, and the means by which they uncover opportunities. If you’re interested in meeting with a corporate VC, be sure to watch this RESI @ TMCx panel video first.

 

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LSN Summer Reading Series Chapter 10: “Phone Canvassing”

30 Jul

By Michael Quigley, Director of Research, LSN

Once you have a global target list of investors as we outlined in last week’s chapter, you will want to begin going outbound and contacting these groups. With this week’s edition of the summer reading series, we explain what goes into an effective phone canvassing campaign.

“Chapter 10: Phone Canvassing” goes through the process of reaching out to potential investors effectively via the phone. Now the idea of contacting investors, or anyone for that matter, via a cold call may sound daunting to many fundraising entrepreneurs; however, in the highly competitive marketplace for early stage investment, entrepreneurs should use this and all professional tactics available to them in order to separate from the crowd and garner more attention from potential investors.

Click here to download/print the chapter PDF

Join us next week for Chapter 11: “Email Campaigns”

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

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Hot Life Science Investor Mandate 1: Healthcare Angel Group Seeking Therapeutics Devices and Diagnostics Across the United States

30 Jul

An angel group that is made up entirely healthcare professionals is seeking to invest in technologies that significantly advance the standard of care. The group considers companies at a range of stages and is geographically agnostic. Since the members are investing their own capital, the investment size and capital structure are highly flexible. The group is actively seeking new investment opportunities, and is open to leading financing rounds.

The group is interested in therapeutics, diagnostics, and medical devices. While the group will consider most any indication and technology type, the group currently has a particular interest in cell therapy and in the oncology sector. In general, the group is not interested in dermatology. The group will only consider products that have shown human clinical efficacy; in the case of therapeutics, the group generally looks at phase II companies but if a company has obtained human efficacy data in phase I, the group would consider the opportunity. 

The group invests in both private and public companies. The group performs deep scientific due diligence on all the opportunities that the group takes part in, often conducted by the group’s members.

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: CVC Arm of High Tech Company Seeking Connected Devices Opportunities

30 Jul

The Corporate Venture arm of a Hi-Tech Company currently manages a total of $850 million in assets, and is looking to make equity investments ranging from $2-$5 million with the ability to allocate up to $10 million generally in series A-C rounds. The majority of fund’s investment have been throughout the United States although they have and are willing to invest internationally as well. The fund is actively reviewing new opportunities can could make 3-4 investments over the next year.

The Fund is currently interested in sectors of Medical Devices, Diagnostics and Healthcare IT that increase connectivity in the healthcare ecosystem. The fund is particularly interest in verticals of Health and Wellness, Chronic Disease Care, Aging in Place, Telemedicine, Genomics, Patient Monitoring, Clinical Trails Management, Mobile Software Healthcare IT Applications, and Electronic Medical Records Management. The fund is willing to invest in devices with 510k pathways however the fund is not currently considering highly invasive medical devices.

The Fund is looking for privately held companies with experienced management teams. The fund generally looks to take a board or observer seat following investment and is willing to both lead and co-invest.

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 Life Science Investments Globally

30 Jul

A family office founded by a successful medical device entrepreneur can make investments ranging from approximately $500,000 to $100 million into companies and due to its funding structure has no requirements for holding period or capital structure. The firm makes investments in the forms of equity, controlling interest, in-licensing, MBO/LBO, growth capital and is also willing to co-invest. The firm is looking for companies located around the globe and makes around 5-15 investments in a given year.

The firm is looking for companies in sectors of Biotech Therapeutics and Diagnostics, Medtech, Heathcare IT, R&D Services, and Biotech Other. The firm is willing to consider all indications including orphan diseases, though they have some additional interest/experience is areas of Women’s Health, GI, Oncology, Cardiovascular, and Personalized Medicine including Proteomics and Genomics. The firm is most interested in companies that are in Phase II or later, nearing commercialization where the firm is capable of utilizing its operating company to scale up the company’s sales, marketing and distribution. That being said the firm has made earlier stage investments in the past and is open to considering highly innovative and compelling early stage companies. The firm is also interested in companies developing consumables/reagents, service providers, food and nutraceuticals.

The firm looks to work with management teams with experience and grit and generally looks to take a board seat although it is not a requirement. The firm looks to leverage the use of its operating company to assist the company’s sales marketing and distribution efforts as well as providing assistance in operations management.

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: CVC of Drug Retail Chain Seeking Strategic Investments

30 Jul

The corporate venture capital branch of a drug retailing chain looks to make strategic equity investments into companies of up to $5 million. The firm is generally stage agnostic although they prefer companies at or near commercialization. The firm is actively reviewing new investment opportunities and is open to consider companies from around the globe.

The firm is focused on investing in companies of mutual strategic benefit to the parent company. This includes companies in sectors of Medical Devices, Point of Care Diagnostics, Healthcare Services, Pharmacy Innovation, and Sensors/Wearable devices. For medical devices and diagnostics the company prefers products that are near or have reached commercialization as the firm can add significant strategic value in distribution, marketing and sales. The firm is also very interested in products that will be sold directly to patients or devices/diagnostics that will be able to be used in the firms’ clinics. For wearable devices and sensors the firm is most interest in technologies with clinical value in terms of disease treatment and/or management.  The firm is open to all indication types.

The firm is looking for privately held companies with experienced management teams. The firm looks to take a board observer seat following investment.

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