Next Phase Newsletter

Lauren Schulkamp, Business Development Manager-RESI Conference Series, LSN

Partnering serves as the foundation of any successful investment conference. The RESI Partnering Platform, combined with the sheer quantity and diversity of investors attending RESI, provides you with a one-of-a-kind partnering experience. Below, you can view that breadth of investors who have registered to attend.

Next Monday (December 5^th), RESI Partnering will launch. RESI attendees can use the platform to find other attendees based on specific areas of common interest: sector, subsector, indication, phase of development, investment stage, capital structure preference, etc. The RESI Partnering Platform also maintains investor profiles that are populated by LSN’s propitiatory investor data.  Through intensive research and one-on-one dialogues with the investors themselves, we are able to gather the most accurate, up-to-date investment preferences from the attending investors, providing you with the ultimate opportunity for powerful and effective dialogue.

Several advantages come with registering early for partnering events:

1. To ensure that you will have access to partnering.
2. Get a head start on finding investors who are a fit for your technology.
3. Put yourself on top and start sending out meeting requests.

Remember: many investors fill up their schedules well in advance!

With partnering going live on Monday, the best time to register for the event is now. We have over 360 investors signed up so far, take a look at who you can meet with:

By Bill Brah, Assistant Vice Provost for Research and Executive Director, Venture Development Center

In March, we shared an introduction to the Global Entrepreneur in Residence (GEIR) Program at UMass Boston’s Venture Development Center, which supports entrepreneurs in the life sciences and other sectors by providing H1B visas for founders. As GEIR has gained traction, LSN is excited to revisit GEIR to track its progress.

First report on how the program is working

With national startup visa legislation stymied in a bitterly divided Washington D. C., Massachusetts is showing that something constructive is possible. Two years ago, it created the Global Entrepreneur-in-Residence Program to retain foreign grads of local universities who are launching startup companies. The program was developed by the Massachusetts Technology Collaborative, and formed as a public-private partnership by Governors Deval Patrick (D) and Charlie Baker (R), working with members of the innovation community including Flybridge Capital Partners, Silicon Valley Bank and Goodwin Procter.

The University of Massachusetts Venture Development Center, which is leading the pilot program, has released statistics (below) on how the program is working. It provides the first concrete evidence of how a national startup visa is expected to benefit the country.

The Global Entrepreneur-in-Residence program gives entrepreneurs H-1B visas sponsored by the University of Massachusetts. Unlike private employers, a university is exempt from the annual H-1B visa quota. The university sponsors an entrepreneur for part-time work at its Venture Development Center and the entrepreneur spends the rest of their time advancing their startup company to the point where the company can sponsor the H-1B visa.

Strong demand among entrepreneurial grads of many universities and countries

The program has been selective. It reported that 67 entrepreneurs applied to the program; 23 or 34% of the entrepreneurs were accepted. All received visas. Seven entrepreneurs have already “graduated” from the program with visas independent of the University of Massachusetts.

The entrepreneurs represent 16 different countries, India leading with 37%. The entrepreneurs attended 15 different universities, with Harvard and MIT leading with 35% of the entrepreneurs. The program has also drawn entrepreneurs from universities outside Massachusetts including Stanford, Columbia and Carnegie Mellon. Ten of the 23 entrepreneurs are software engineers. The rest are finance, marketing and management majors.

Entrepreneur’s companies have had fundraising success, and are adding employees

The entrepreneurs’ 20 companies have raised a total of $185,512,265 in private investment, and have a headcount of 416 employees. The companies include both newly formed and growing companies. All have had fundraising success, and are adding employees. Fourteen or 70% of the 20 companies are newly formed; the companies have raised $10,313,000 in private investment and have 61 employees. Six companies are at the growth stage. They have 355 employees and have raised $175,199,265.

Other states following Massachusetts lead

Encouraged by the potential, the U.S. Citizenship and Immigration Services has proposed a new rule which would allow certain international entrepreneurs to be considered for temporary permission to be in the US. However, investors are pushing for more flexibility before the rule is adopted.

Meanwhile, the Venture Development Center has opened its application process for 2017 and plans to accept 15 more entrepreneurs. And other state universities in Colorado, New York and California have followed Massachusetts in adopting global entrepreneur programs.

By Cole Bunn, Senior Research Analyst, LSN

As we are quickly approaching RESI@JPM, LSN is happy to announce the Diagnostic Investors panel. Entrepreneurs seeking to secure funding for their diagnostic technologies arguably have the toughest job of all the early-stage biotech/medtech folks, given the wide variety of diagnostic technologies and services along with a complex regulatory and reimbursement system.

Whether you are looking for guidance on how to court a venture investor or how to engage a strategic partner, you can hear from both on how to best prepare to present to and work with organizations like theirs.

Diagnostics panelists will include the following:

• Nola Masterson, Managing Director, Science Futures (moderator)
• Alexis Ji, Partner, Illumina Ventures
• Denis Bronnikov, Global Licensing Director, Roche Diagnostics
• James Stover, Vice President, Business Development, Aegis Sciences Corporation
• John Steuart, Managing Director, Steuart Ventures

The panelists will share their perspective and tactical guidance for shepherding a diagnostic at the early stages of development through the dynamic healthcare environment to an eventual exit.

By registering for RESI San Francisco, you’ll be able to listen to the Diagnostics panel live in person, and experience numerous opportunities to expand your network in the life sciences and to learn more about the fundraising process.

By Dennis Ford, Founder & CEO, LSN

LSN would like to wish you all a happy Thanksgiving. We are thankful for your support and engagement on our path to build connections between early stage life science technologies and investors. We wish you all the greatest success in building your respective buinesses and moving new treatments to market.

As is LSN’s Thanksgiving tradition, we’re serving up the 10 most recent life science investment mandates gathered by LSN Research. These mandates show the breadth of coverage that LSN has among life science investors, with investors including international PE firms, expert regional investors, and global pharma firms. If one of these investors is a fit for your opportunity, we’d love to hear from you.

While you enjoy the spread on your own tables at home, click the mandates below to see what the LSN Investor Platform is serving up:

1. PE Firm Raises New Fund for Early Stage & Growth Stage Medtech Opportunities

2. New VC Firm Seeks Medtech, Diagnostics and Digital Health Deals in Europe

3. Pharma Firm Invests in Therapeutic Assets in Oncology, Autoimmune, Diabetes and Infectious Disease

4. Venture Development Organization Invests in Life Science Startups in Ohio

5. Sovereign Wealth Fund Looks Globally for Life Science Deals

6. Diagnostics Firm Seeks Early Stage Partnerships

7. China-based Venture Firm Seeks Healthcare IT for China Market

8. Seed Stage Angel Fund Seeks Devices in North Carolina

9. Large Pharma Firm Focuses on Oncology, Women’s Health, Cardiology and Diagnostics

10. European VC Invests in Therapeutics and Medtech in the Benelux Region

By Dennis Ford, Founder & CEO, LSN

I talk to fundraising CEOs every day about raising capital to move their discoveries forward towards the market. I ask how they’re conducting the process of finding, vetting and reaching out to investors who are a good fit for their product. Experienced CEOs are typically savvy in their approach to this process. They have a global view, they understand it’s a numbers game, they are cognizant that the early stage investor landscape has changed and they have to adapt right along with it. Experienced fundraising CEOs have a plan A, B and C because they are in tune with the ephemeral nature of global investor opportunities. Experienced CEOs get that it’s all about relationships and that fundraising takes time and unfortunately usually more time than they would like.  Still they are experienced and they hang in there. However, often I find that less experienced CEOs have a prescription for how they want to get their funding – an attitude that always stuns me.

For example, the CEO might say “I haven’t started yet but here is how I want my round to go down: We want to find a family office to lead the round, and we also need a strategic participant, perhaps an Asia-based large private pharma firm.” These CEOs hope that LSN can simply write a prescription for some investors that will rush in to solve their problem.  There is a prescriptive attitude that a family office will be easier to deal with and therefore give better terms, or deep pocketed Asian investors will solve the future distribution issues, like it was that simple.  Yes, it is good to think big, but underestimating the capital raising issues before you is a real tactical error. You need to to plan for the worst case scenario. You need to go global, and realize it will take more time then you hope for, and you therefore need a plan A, B and C.

I always tell these CEOs that in reality, you need to find investors that are a fit for your product. You have to talk to investors who have a mandate to invest in companies at your stage and with your kind of product or service. You can’t go outbound with a preconceived notion of who is going to get involved. To raise capital, you need to consider every category of investors – including family offices, VCs, pharma and major medical device firms, corporate funds, and foundations. If you research potential investors in your space and perhaps make a heat map of those who you’re a fit for, your life becomes much less prescriptive and more based on reality.

Reality counts when seeking out capital. Do your homework and investigate all the possible investor types that are a good fit. That strategy is a winning one.

By Michael Quigley, VP of Market Research, LSN

As a fundraising entrepreneur you ought to be having calls and meetings with a numerous potential investors and strategic partners.  Now to my knowledge, no term sheet has ever been drafted and executed during that first conversation and as such follow up is a crucial piece of every fundraising campaign. As the VP of Market Research at LSN I split my time interviewing life science investors and helping companies navigate the fundraising process. In doing this I have developed a keen understanding of what makes companies really stand out from the pack with their investor communications and I would like to share with you some of what I have learned.

Follow up Starts During the End of the Meeting

We have written before about the importance of taking time during investor meetings to get to know and understand the investor as this can aid you in your pitch, however one question entrepreneurs often do not ask is “Can you walk me through your process?”. Every investor differs in a number of ways including their process and timeframe for reviewing potential investments. Is the person your speaking with the decision maker? Or do they need to have a larger team review during a weekly meeting and agree to move forward? Having the answers to these questions can greatly help you in understand when and who to follow up with. Speaking of when to follow up, at the end of every meeting or call in addition to asking about process setting a date for when to touch base again is paramount. Deadlines and accountability make the world go round and in a world where every investor can be reviewing 10-20 deals at a time, having a deadline established for when to have feedback can help to ensure your opportunity gets proper attention in a timely fashion.

Provide Additional Value Every Time You Follow Up

If possible you should avoid following up simply for the sake of following up at all costs. What is much better is if you can, in addition to asking about their review of your tech, provide additional news that recently surfaced in your space and how it relates (positively) to your investment opportunity.

Another possible value add would be to provide an update on your company’s recent study results, new partnerships established, board members added – really, anything tangible demonstrating your company is making forward progress. Investors love to see progress as they review a company, as it provides a testament to the team’s ability to perform.

Suggest Next Steps

Included in your follow up message should also be a suggestion for a next step if they are indeed interested.  Now, what this next step will be will vary depending on the current status of your conversation but it could include suggesting a face to face meeting, a conference call with additional members from the investment firm or the transfer of an NDA and access to a data room. Because investors are generally under a time crunch with stacks of deals to review, it is crucial that you have a NDA and a data room ready to go at all times while fundraising. It both keeps the investor at peak interest when they are reviewing and shows the CEO’s preparedness for raising the round.

Don’t Get Discouraged

If an investor doesn’t get back to you when they say they would you may feel down but you are certainly not out. There a millions of reasons why they might not be getting back to you.  By making the assumption that it was because they didn’t like you or your technology, you are only trapping yourself in a potentially false reality. I want to stress this point again:  Investors review LOTS OF OPPORTUNITIES and until you are in later stage dialogue, the unfortunate reality is you are one of many and as such a delayed response shouldn’t by any means fell like a death sentence. I would recommend that you continue to follow up once a week, always providing additional value and information whenever you can. In my experience it is far more often that investors will thank companies for their persistence and apologize for the delay than become annoyed or hostile in any way.

I hope you found these tips valuable, and I wish you all the best in your fundraising campaigns!

By Christine A. Wu, Senior Research Analyst, LSN

What types of companies are medtech family offices looking for, and what evaluation criteria do these firms use? What types of trends do they see in medical technology, and what makes a device deal uniquely attractive to a family office? For the RESI San Francisco Conference, the LSN team is excited to announce the Medtech Family Office panel. On January 10^th, five highly experienced individuals representing family offices in the medtech space will speak on behalf of these questions and more.

We will be joined by the following panelists:

• Jonathan Jonas, Partner, JVC Investment Partners
• Neda Amidi, Principal, Plug and Play Ventures
• Joseph Cook III, Principal and Co-Founder, Mountain Group Partners
• Eugene Durenard, Managing Director, Stetson Family Office
• Neil Wyant, Managing Director, Everett Partners

If you register for RESI San Francisco on January 10^th (Tuesday of JPM week), you will have the tremendous opportunity to listen to this panel in-person. The event will not only provide a colorful representation of the investment landscape, but will also offer a great chance to personally meet potential investors and entrepreneurs alike.