Archive | July, 2017

RESI Boston: Venture Philanthropy Investors Share Their Perspective on Investing for Impact

27 Jul

By Lucy Parkinson, Director of Research, LSN

RESI aims to represent a diversity of investment sources for early stage life science companies, beyond traditional venture capital firms and other investors with short-term horizons and, primarily financial aims. It’s therefore fitting that our first RESI Boston panel announcement is the RESI Venture Philanthropy panel. LSN has confirmed five speakers from disease-focused venture capital funds, each of which invests with the primary aim of bringing new treatments to patients in their focus indication area.

The unique outlook of venture philanthropy investors means that each fund has created a distinct strategy for moving new inventions towards patients. They typically have deep domain expertise at their disposal, and many focus on assets at an earlier stage than typical VCs, with the aim of helping new treatments cross over biotech’s infamous ‘Valley of Death’. In this panel, these investors will explain their unique strategies and expertise, and entrepreneurs can learn how to find and work with a venture philanthropy investor in their domain. The participants are:

A Field Guide to an Introductory Investor Meeting

27 Jul

By Michael Quigley, VP of Investor Research, LSN

mike-2For early stage and especially for pre-revenue companies, introductory meetings with investors are one of most critical situations that entrepreneurs face. Saying it is important to prepare is an understatement. With this article I aim to provide guidance on what exactly entrepreneurs should understand about a prospective investor before they begin a meeting, the questions they should be asking in the meeting, and how to use that information to guide the conversation and prioritize leads.

The world of life science and healthcare technology is large and differentiated, and so are the investors that allocate to the sector. There are several defining characteristics of a company in this space that ideally should match with what an investor has interest/experience in. It’s important to research an investor’s focus areas in the life science and healthcare space, and understand their outlook as best as possible prior to a meeting. You can think about these key company characteristics in the following way:

  1. Sector
      • Therapeutics, Medical Devices, Diagnostics, Healthcare IT, R+D Services
  2. Subsector
      • Molecule type/MOA, Type of Device/Diagnostic, Type of/End Users of Software, etc.
  3. Indication Area
      • Oncology, Neurology, Orphan diseases, etc.

Understanding the level of comfort and familiarity that the firm and person(s) you are speaking with have with your technology and market can help you steer the conversation in the most productive way possible. For example, if your startup is an oncology company and the investor has invested in a number of oncology therapeutics, then you should prepare to spend a significant amount of your time highlighting your unique approach and diving deep into the science. With an investor less familiar with the oncology marketplace, you might need to spend more time and slides describing the market and competitive landscape. If the investor is not familiar with your space, you will need to spend more time highlighting the problem you are aiming to solve and relatively less on your solution until they recognize and appreciate the significance of the problem.

Other pieces of information you should be looking to gather, more to qualify the investor as a real potential than to guide the conversation, revolve around their typical investment size and stage in terms of dollar amount, Seed Series A,B etc. as well as the clinical development phase you are in or your level of commercial traction. Investors that invest in later stage technologies will often take meetings with earlier stage companies to build relationships for future rounds or to gather intel on what is coming next and by understanding this you are able to understand their likelihood of participating in your current round.

Another key datapoint to consider when dealing with VC or PE fund investors is the fund vintage or the year the fund was raised. Funds that were closed more recently, say within the past 3 years will have more dry powder available while the older funds may down to their last one or two investments before they need to raise their own capital again. You should also look at their historic investments to try and determine if they tend to lead or co-invest. Anyone who has raised capital will tell you that securing the lead is the hardest part. Many investors, particularly with those less experience in your space, will want to see a lead and a term sheet in place before they will commit to an investment.

By doing this research it shows to the investor that you have done your homework. I can’t stress enough how much that really resonates with them. If you expect them to invest millions of dollars into you and your company then they certainly expect you to take the time to become familiar with them and their organization as well. An investment is the start of a long-term relationship, and any strong relationship should be a two-way street.

Finally, and this is the point I see missed most frequently: It’s important to take the first 5-10 minutes of the meeting to go through proper introductions and try to connect on a human level. Investors are often keen to know why the entrepreneur was motivated to start this business and to understand their personal commitment to the startup’s mission. Before you jump into the slides and go through your pitch, ask questions not just about their fund size or indications of interest but also their background, and how they got to be where they are today. At the end of the day, people invest in people. By making the effort to get to know who is on the other end of the phone or table, you may uncover similarities in your past or common goals to connect over, which helps to build trust and a stronger relationship. Taking the time to build this rapport could lead to them helping you in other ways, even if they don’t invest in your current financing round.

Are Chinese Life Science Parks a Good Entrepreneur Opportunity?

27 Jul

By James Huang, Research Analyst, LSN

james-wpIn 1988, Beijing Zhongguancun Science Park opened for operations. Ever since, science parks have become a go to strategy for Chinese cities who wish to develop specific technology industries. Science parks are zones containing various high-tech facilities such as labs, housing, medical facilities, etc. that are being built by the Chinese government to encourage the development of technology and industry.

At present, many new science parks are popping up in smaller cities across China. These institutions are looking for companies to move into their facilities. In fact, several of these science parks such as the Chengdu Tianfu International Bio-Town have been holding events in the USA to gauge how willing U.S. life science startups are to relocate to their new facilities in China. This poses the question then of whether relocating or opening a subsidiary would be worthwhile for a U.S. based life science company.

Here are some of the benefits that these science parks typically advertise:

  • Newly constructed facilities
  • Support from the government if accepted into the park
    • Many of these science parks are run by the local governments
  • Access to newly graduating talent from universities partnered with the parks
  • Infrastructure in place to allow easy access of larger cities (i.e. Shanghai, Beijing, etc.)
    • Many of these cities have built high speed train systems to allow for travel to major cities.
  • Easier access to Chinese investors
  • Partnership opportunities with other companies in the park

However, one should keep the potential difficulties in mind:

  • Relocating or creating a Chinese subsidiary isn’t a simple task
  • Many of these life science parks are in small cities, rather than major hubs like Beijing and Shanghai
  • Many Chinese investors are already active outside of China and can be reached with the right connections already.
  • Being fluent in Chinese is highly recommended
  • Cultural differences between China and U.S. might create difficulties

Of course, there are still many factors to consider before anyone can truly decide whether joining a science park program would be worth it. Furthermore, each individual park would have its own unique strengths and weaknesses which must be considered as well. Some science parks are still mostly concepts and have only been partially constructed! It’s important to do your due diligence if you’re considering an opportunity like this.

These science parks present an interesting opportunity for life science startups hoping to work in Chinese markets, but it’s important to remember that there are other ways to connect with investors and strategic players from China and the broader Asia region. LSN’s Investor Platform tracks over a hundred investors based in China, and many of these investors have created cross-border investment vehicles and regularly visit the US to participate in life science investment events, in which the RESI Conference has been leading the way by opening a North America-Asia Investment and Partnering track. While there may be advantages to joining a science park in China, you can make connections with China-based partners without the headaches of relocating.

Hot Investor Mandate 1: Australia Family Office Looks Worldwide for Phase II Biotech Opportunities

27 Jul

A family office based in Australia focuses on late stage therapeutics. The firm manages a $2.5 billion evergreen fund, and typically invests between $1 and $10 million. The firm normally makes co-investments in the USA, Europe, Middle East, and Australia.

The firm is currently looking for new investment opportunities in therapeutics space. The firm is only interested in later stage technology at Phase II or later. The firm is open to all subsectors and indications in therapeutics, though is not interested in lab equipment and drug development enabling technology. The firm does not invest in pre-clinical products, and only seeks products that are either in clinical trials (Phase II or later) with human data or on-the-market.

The firm seeks companies with an established management team with experience in the field. The firm does not typically take a board seat after an investment. The firm seeks distribution rights for Australia and Southeast Asia from international companies.

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

Hot Investor Mandate 2: Cross-Border VC Interested in Early Stage Life Science, Focused on CNS Drugs

27 Jul

A healthcare-focused venture capital firm based in Taiwan is investing from its new fund that is set to close in Q3 2017. The firm seeks to lead or co-invest in Pre-A to Series A rounds. Typical allocation size ranges from US$500 K to 1 million. The firm is looking for companies across the world with a focus on North America and Europe.

The firm is most interested in therapeutic projects, especially in the CNS space. The firm prefers assets with preclinical or early clinical validation. The firm is open to all modalities. The firm also considers medical devices and diagnostic technologies.

The firm is looking for experienced teams and typically requests board representation post-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 3: Strategic Oncology Fund Invests in New Drugs from Discovery to Preclinical Stage

27 Jul

A $50 million strategic corporate venture capital fund formed by an oncology-focused pharmaceutical company seeks to make equity investment in startup companies that discover and develop innovative therapeutic products and/or drug-enabling platform technologies that demonstrate a clear potential to benefit cancer patients. Investment size can be flexible depending on the deal. The firm will also consider the option-type of investments and spin-outs, in addition to pure equity investments. The fund is currently seeking opportunities in the U.S., Europe and Japan. and opportunities mainly in US and Europe.

The firm considers a wide variety of modalities (both biologics and small molecules) within the oncology field. The firm focuses on programs from drug discovery to preclinical development.

The firm is looking for teams with strong sector expertise. With the support of the parent company’s established expertise in the field of oncology product discovery and development, the firm will provide financial resources and company outreach to build strategic alliances to help translate novel research and high potential drug candidates into cornerstone products. The firm may request regional option or rights on a case-by-case basis.

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

Hot Investor Mandate 4: Corporate VC Invests in Diagnostics and Imaging

27 Jul

A corporate venture capital fund based in Europe with offices worldwide invests in medical technology companies that are strategically relevant to its parent company. Investments in equity rounds range from $1-5 million, and are made worldwide.

The fund’s primary focuses within healthcare are medical imaging (including both equipment and software) and diagnostics (particularly point of care diagnostics and molecular diagnostics). In these sectors, the fun focuses on products used in a hospital setting. The firm also invests in healthcare IT solutions that add value to imaging and diagnostics, such as data-as-a-service products. The fund is potentially interested in medical robotics. The fund will invest in any medical indication area, and only invests in companies that have attained proof of concept data for their product, with a preference for companies that have a product on the market that can demonstrate traction and revenue.

The firm generally does not attach strategic rights to an investment other than the right to be informed if the company is seeking a buyer. The firm requires a board seat or a board observer in each portfolio company.

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