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

Corporate venture capital (CVC) funds are playing an increasingly important role in the early stage ecosystem and now are participating in one out of every five VC deals in the US. Almost all major pharmaceutical companies have now established CVC funds; meanwhile giants from other industries are exploring the life sciences horizon through their CVC arms.

Moderated by Donnie Mcgrath, VP of Business Development, Bristol Myers Squibb, this panel will feature:

• Mark Powers, CFO, Integrium
• Martin Heidecker, Director and Investment Manager, Boehringer Ingelheim Venture Fund
• Ann DeWitt, Senior Director, Sanofi-Genzyme BioVentures
• Ed Hu, Chief Financial Officer & Chief Investment Officer, Wuxi Venture Partners

What technologies are on CVC managers’ dreamlist? What are their key motivators and strategies? How should entrepreneurs start a dialogue with them? Experts from five prominent CVC funds will get together on the Corporate Venture Capital panel at RESI and speak their minds on these questions. You may have read our tips on partnering with CVC funds; RESI Boston will be a unique opportunity to meet them face-to-face.

By Lucy Parkinson, Senior Research Manager, LSN

How is your financing campaign organized? Whether you’re deploying an in-house BD team to raise your round, or working with an investment bank or third-party marketer, the staff who execute your campaign need to have an efficient and reliable means of organizing the campaign and storing all the relevant data points that result from their actions. At LSN, we believe that using a cloud-based contact relationship management (CRM) system to organize your campaign is essential.

In this article, we’ll explore why we use CRM as the backbone of our campaign cloud infrastructure, and we’ll provide tips on how CRM can be used to improve the process and the results of your outreach.  There are many CRM systems available at a low cost (typically $5-20 per user per month); LSN uses Salesforce.com, which will therefore be used as an example in this article. (While we recommend Salesforce.com to LSN clients, LSN has no affiliation with Salesforce).

Tracking Campaign Information

We’ve talked previously about the importance of creating a global target list of investors, and of tiering those leads to increase your campaign efficiency. By using a CRM system, your fundraising team can make full use of the investor information that you’ve gathered.

You can import your investor information into the CRM system, which will create an account page for each investor. You can create customized fields to track all your data points related to that investor. In a recent installment of the LSN Summer Reading Series, we provided a template that covers the most essential fields for a fundraising campaign:

• Date of Last Email (Date Field): This should be filled in every time you send an email to a prospect. This will enable you to know the last time you reached out to a prospect.
• Follow-up Date (Date Field): This field will tell you the next time you need to follow up with a prospect. By sorting your prospects based on this field, you can track who you should follow up with on any given date.
• Date of Last Voice Mail (Date Field): This should be filled in every time you leave a voice mail with a prospect.
• Status of Lead (Pick List Field): By qualifying accounts based on the criteria above, you will be able to prioritize your to-do list.
• Notes: This is where you can track any significant details from previous conversations. Keeping these notes logged in a central location helps in juggling multiple investor dialogues.

These data points will allow the campaign team to easily organize their efforts – and indeed, Salesforce.com allows users to automatically track their emails to potential investors using the Email to Salesforce settings. One powerful benefit of the CRM system is that it can be used as the ‘source of truth’; rather than team members spreading information across emails, ExCel spreadsheets and meeting notes, all information is centralized in the CRM system. This allows the team to easily collate and share their information, and track the progress of the campaign.

Keeping On Track

CRM systems also include task and list management features that allow you to organize the work of your campaign. The fundraising team can create different account views to bring up certain targets that require action; the team may wish to view a list of all their Tier 1 targets that have yet to respond to outreach, or to view a list of all the investors that expressed interest in reviewing the company’s pitch deck but have yet to return to you with feedback. The task management features of the CRM system can be used to create a to-do list that manages all your required follow-up activities. By using these features, you can easily see what work needs to be completed by the end of the day, and also prevent necessary tasks from slipping through the cracks.

The Transparency Factor

One great benefit of using a CRM system is that it allows the fundraising company’s executive team to access the campaign team’s work at any time. By logging into the CRM system, you can create reports that will tell you how many emails and phone calls the team has been sending, and which investors have been responsive. The CRM system could also be used to track other useful data points, such as the general reasons provided by investors who have declined to participate in your round.

This information could be useful for managing an in-house fundraising team. But if you’re contracting a third party marketer, it’s essential that you have access to this information. LSN has often spoken to life science executives who are paying a retainer to an investment bank or a broker, but who have little insight on what this third party is doing. Which investors are they contacting, and how frequently? What message is the broker sending to these investors? CEOs typically only hear from their fundraising partner when an investor meeting has been booked – and that’s only the tip of the iceburg as regards fundraising activities.

To avoid this problem, LSN’s advisory arm always provides the fundraising company’s CEO with a login to access to the campaign CRM system. This allows the CEO to overview all the activities carried about by the fundraising team, and also to add their own meeting notes to the system in order to keep all campaign information centralized.

Taking the Next Step

It’s too easy to let a productive investor contact founder because of a failure to establish the next step in the process. However, a CRM system provides a structure to track the outcome of every interaction with your potential investors. After every meeting, a follow-up process should be carried out, including scheduling a second meeting if the investor is interested; you can use your task list to make sure that the next steps are planned out and then taken accordingly. In some cases, the investor may be currently unable to pursue the opportunity, but requests that you circle back at a later time. Perhaps the investor requests that you notify them once a certain trial has been completed, or a revenue milestone has been reached. You can set a follow-up task to remind you to contact the investor again in the future.

CRM is a flexible tool that can greatly increase your campaign outreach efficiency, serving both as a collective memory of the steps you’ve taken so far, and as a map of the path ahead. We strongly advise you to make use of this resource.

By Alejandro Zamorano, VP of Business Development, LSN

As RESI returns to Boston, so does one of the event’s most popular panels. The Big Pharma Panel features five high-level external innovation executives from top tier pharma companies, who will discuss their key motivators and strategies in depth. What indication areas are the most sought after? What can be expected in the due diligence process? How does an early stage entrepreneur interface with business development executives from pharmaceutical companies? LSN’s Big Pharma RESI Panelists will shed light on these questions and more.

Moderated by Steve Yoder, Global Head, Specialty Pharmaceuticals Search and Evaluation, Bristol Myers Squibb this panel will feature:

• Michael Draper, Senior Director External Science & Partnering – East Coast, Sanofi
• Tomas Landh, Vice President, Senior Principal Scientist Innovation Sourcing, Novo Nordisk
• Kuldeep Neote, Senior Director, New Ventures/Scout, Johnson & Johnson Innovation
• Kiran Reddy, Senior Director, Corporate Strategy, Biogen

Hear from big pharma executives as they explain how they engage with early stage startups, and how they like to be contacted. The speakers will help the audience understand their timeline for contact, and give advice on how to create a dialogue that leads to a relationship and an eventual alliance. If you need to understand the time frame and limitations of how big pharma corporate works, this expert session is crucial for you to attend.

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

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.

By Lucy Parkinson, Senior Research Manager, LSN

At 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.