By Lucy Parkinson, Director of Research, LSN
To raise capital for an early stage biotech or medtech venture, you’re going to need a pitch deck. But it’s very hard to make an engaging pitch deck. At LSN we see a lot of pitch decks from our clients and RESI Innovation Challenge applicants, and as we engage with investors every day, we’ve found out a lot about what works and what doesn’t.
The goal of the pitch deck is to get the first meeting
It’s very important to bear in mind that the pitch deck is not, in and of itself, going to sell your round. You, the CEO, are going to sell your round. The deck’s purpose is to pique the investor’s interest for a deeper conversation with you. You can’t go into depth on the company’s value proposition in 12 slides but what you can do is create an interest in learning more.
The hardest part is making it short enough
Investors receive dozens of pitches per day. The easier and faster it is for them to digest your company’s pitch, the more likely you are to hear back from them. A pitch deck should generally be 10-12 slides long. Many life science companies use much longer decks in the hope of explaining their scientific or business case in full; unfortunately, we’ve seen many that are 30 pages or even longer. A long deck is likely to put a hurdle in the investor’s path to your door, because you’re asking for a lot of assessment time before your relationship with them can even begin.
Showcase management achievements
Entrepreneurs with a scientific background may be tempted to believe that the investor will simply be on the lookout for solid, innovative science with proof of concept data. Nothing could be further from the truth. Many investors focus primarily on the strength of the team and the successes they’ve achieved in the past. It’s important that when you profile your management team, you demonstrate their achievements as well as their scientific pedigree, particularly if they’ve been involved in a successful startup in the past. If the company’s founders are new to industry, having experienced and reputable advisors can round out your team a lot.
Make the business case
A novel scientific discovery may have immense scientifc value but that doesn’t necessarily mean it’s investible. Building a business involves more than building a product. Investors will want to see that you’ve thought about the potential market, current incumbents, competitor products in the pipeline, and when and how to exit.
The latter is often the most important factor; many investors will be looking out for opportunities that can potentially generate large exits in as little as 2-3 years. It may be useful to include a timeline that shows how much capital will be needed for the company to reach key inflection points.
Include the ask
Your deck needs to clearly show how much money you’re aiming to raise, and what you intend to do with the money. It helps to center this aspect of the deck on inflection points; perhaps you are aiming to use the round to file an IND, or to obtain data that will create a value inflection or exit opportunity.
For a later-stage company, investors will also want to know who invested in the earlier financing rounds and how much money has been invested in total. Investors are also often interested to see how much non-dilutive financing has been raised for the product.
Use your data – but sparingly
As I mentioned above, it’s very hard to make your deck short enough. It’s natural to want to cover all the scientific evidence that supports your company’s product. It’s vital to show that your company is based on solid scientific work; however in order to make this case fit on a few slides, you’ll need to prioritize the most important data points and save the rest for the meeting. LSN has heard from investors that one of the most vital points is the safety data. While it’s tempting to use your limited space to show the proof of efficacy, make sure you also cover the safety studies.
It’s a work in progress
LSN’s clients very often polish up their pitch decks and head out to meet investors, only to hear some unexpected pushback on a point that they had thought was too simple or obvious to be worth mentioning. They then go back and add that information to the deck. While it’s important to not let the pitch deck get overloaded with addressing every single objection that the company has heard, after a few meetings with investors it’s often clear what extra points need to be addressed.