By Michael Quigley, Director of Research, LSN

The research team at Life Science Nation is constantly identifying, interviewing, and profiling investors in the life science space. From Boston to Hong Kong, we leave no stone unturned in our efforts to uncover a variety of investors. This article shares some sources and tactics that we use to initially identify life science investors across the globe.

Investment Conferences

A great way to begin a search is by scouring the lists of attendees and speakers for various life science investment conferences. Investors who recently attended these types of events tend to be actively seeking new opportunities and therefore are ideal prospects for your campaign. With life science investment and partnering conferences taking place year-round and worldwide, there are a lot of potential investors to be uncovered.

Historic Financing Rounds

After pulling names from conference lists for the past year or two, look through private life science financing rounds for lead investors and co-investors. This can also yield a significant number of prospects. At LSN, we use our proprietary financing-rounds database for this purpose. However, databases and reporting sites that focus on more general financing rounds can be used for this as well. Such sources also grant you some visibility into the size and types of funding rounds an investor has participated in, helping you to determine if a particular investor may be a good fit for your company.

Company Websites

Other great and often overlooked sources of investor leads are the websites of early stage life science companies. Many companies list their investors on their website or have one or more investors on the company’s board. By reading the biographies, you can see which investment firm an investor is associated with.

LinkedIn

Finally, LinkedIn, when used correctly, can be a great source for uncovering investor leads. By taking advantage of its filtering capabilities, you can search for individuals by industry, location, and keywords. Although you may not be able to find investors for specific technology types or development stages, LinkedIn is a good place to start. It has helped our research team connect with some investors who we wouldn’t have found otherwise.

 

To do all of these things—and to do them well—is a serious time commitment and is only the tip of the iceberg. When you have your investors identified, you should take steps to validate them to determine who would be a fit not only for a life science company but also for your specific technology and stage. Without proper validation, you will waste countless hours calling and emailing investors who have no real interest in your opportunity.

Next week, we share our insights and tactics for validating potential investors. Stay tuned.

 

By Lucy Parkinson, Senior Research Manager, LSN

At LSN, we track both life science companies and life science investors located all over the world. We frequently stress that if you’re seeking capital in the life science field, you will have more success if you reach out beyond your own backyard and market your opportunity to global investors. Nowhere is this more apparent than in Asia, where a history of concentrated R&D funding has resulted in the flowering of new biotech start-ups in the region.

The LSN Company Platform tracks thousands of life science companies across Asia. As shown in Exhibit 1, some of these are contract research organizations, suppliers, and other outsourcing partners, but many are companies developing innovative biotechnology or medical technology products.

As in the rest of the world, government investment in R&D has resulted in a great diversity of new discoveries. A deeper dive into the data reveals the breadth of technologies that these innovators are pursuing. As shown in Exhibit 2, many therapeutic start-ups in Asia are developing novel biologics.

Exhibit 3 shows the medtech sphere, where diagnostic devices, imaging, and hospital hardware predominate.

So which investors are interested in investing in Asia-based companies? As shown in Exhibit 4, the LSN Investor Platform has hundreds of investors who are looking at opportunities in Asia. Some of these investors have a specific Asia strategy; others are truly global investors who would consider a good opportunity no matter where a company is based.

While institutional private equity funds predominate, investors of every kind show an interest in life science opportunities in Asia, in keeping with what LSN has learned from working with start-ups in the US and Europe. Whether seeking to increase their ROI or to move science forward, investors are willing to look far afield for the right place to allocate, and start-ups are discovering that it’s best not to limit their horizons when seeking capital.

By Dennis Ford, Founder & CEO, LSN

At LSN’s third Redefining Early Stage Investments (RESI) Conference, leaders from five family offices around the world gathered under the same roof at Fenway Park, answering questions such as: Why do family offices invest directly? How do they assess early stage opportunities? How do you find family offices? How do you build a quality relationship with a family office? Do family offices do deals with third party fundraising partners? How important is branding and messaging?

Click on the video below to hear the views of these five family offices. The video is 70 minutes, and well worth the viewing time.

Moderator:
Bill Brah, Founder & Executive Director, UMass Venture Development Center
Panelists:
Melissa Krauth, Principal, Claria Bioscience
Meredith Fisher, Director & Partner Investments, Private Investment Office
Christopher De Souza, Director, Broadview Ventures
Alejandra Paredones, CEO & Founder, BSI Capital Group
Todd Holmes, Director, Gurnet Point Capital

 

By Michael Quigley, Director of Research, LSN

As an entrepreneur in the midst of a fundraising campaign and all that it entails—networking events, conferences, referrals, and cold calls—you are going to meet with a substantial number of people who are either potential investors in your technology or who could connect you with someone who is. Following up with these new contacts after an initial meeting or conversation can make or break your campaign. Here are some key reasons why following up is so crucial and what it can do for your campaign.

It Shows Professionalism

By taking the time to send follow-up messages to recent contacts, you are demonstrating your aptitude and professionalism as an entrepreneur. You are going to be managing potentially hundreds of relationships, and most people you speak to will be aware of that. So taking the time to send a personalized follow-up message in a timely manner shows your level of organization. This ultimately reflects positively on your investment opportunity. With investors viewing management as one of the most crucial pieces of any early stage life science investment, you need to do whatever you can to demonstrate you are on top of things.

It Creates a Dialogue That Fosters a Relationship, Which in Turn Can Elicit an Allocation

The goal of your fundraising campaign is not only to get cash but also to find the right partners to help you grow your business. Therefore, whenever you’re meeting with new investors or other strategic partners, you should keep in mind that you are here to establish a professional relationship. Even investors who are not a fit for your opportunity today may be interested in speaking with you down the road as you hit certain milestones, or they may be able to refer you to other investors they know who might be interested. By maintaining a dialogue with these groups, you can leverage your network to gain more contacts, as well as stay on their radar for when you reach those milestones and are looking to raise an additional round.         

It Can Clarify Any Potential Miscommunication

By following up and mentioning some of the specifics from your conversation, you can bring to light any miscommunication between you and the person that you met. Whether clarifying the next steps in the evaluation process, the information they need to see from your firm, why they can’t invest at present, or who they would like to put you in touch with, by sending that follow-up message you help make sure that nothing falls through the cracks.

Now that we’ve discussed the reasons why follow-up is so important, here are some best practices for how go about following up after an initial meeting.

How you follow-up should depend largely on your current relationship, their level of interest in your opportunity, and where your conversation left off. For investors that have clearly stated a high interest, you want to follow up with haste. Ideally, you should be trying to set up a time for a follow-up call toward the end of the original conversation, if possible. If not, an email including your investor deck and proposing a call should be sent no later than the following day. If they are interested, they will be glad you have shown this initiative and will coordinate a time for further discussion.

If the investor seems interested but not highly compelled to fund your opportunity, it is wise to follow up periodically. By checking in from time to time, you remain on their radar for both referrals and a potential investment as you obtain more supporting data. Also, it is always a great idea to ask if they will be in your area or going to any conferences that you will also be attending so that you may meet in person. Face-to-face meetings are always the most valuable and could turn a mild interest to a more serious interest.

If the investor is not interested due to your level of clinical data, then it is wise to continually follow up with them as you obtain more data, even if is still under the level they are looking for. By keeping them abreast to your companies’ successes, the investor will grow more familiar with your technology, which may make them more likely to allocate down the road.

In cases where the investor is not interested in your opportunity due to the indication you are targeting or the underlying science behind your technology, then following up should be limited to a simple email thanking them for their time. In a best case scenario, they will refer you to someone they know that may be interested, but other than a single email, following up with these investors will only slow you down. This is why you should always try to identify the reasons behind an investor’s lack of interest; this information will help you better understand how to tweak your marketing materials as well as how you should or shouldn’t be following up.

Keeping track of all of these contacts as more surface and current contacts go cold can be a daunting task if not managed properly. Using client relationship management software can make this process much easier, however, it still requires a diligent effort if you wish to get maximum utility out of all the meetings you have.

By Shaoyu Chang, Research Analyst, LSN

Venture philanthropy investment is playing an increasingly important role in early stage life science innovation. More and more, nonprofit foundations are partnering with start-up companies to advance science and address unmet needs. At the recent Redefining Early Stage Investments Conference in Boston, leaders from five prominent foundations gathered for a discussion on the evolving landscape of venture philanthropy in life science research.

At a time when traditional funding sources for life science are on the decline, venture philanthropists are stepping in to fill some of the gaps. “We are looking at the emerging markets of tomorrow. They might not be big, but they are not inexistent” said a program investment officer with a leading foundation in global health. “We are trying hard to find the right mix of commercially viable companies that can serve our charitable goals.”

Unlike traditional grant-making foundations, to facilitate innovations, venture philanthropy investors offer science expertise and business management skills in addition to their investment dollars. “Money is not enough. It is essential that you are part of the process,” said the founder of a nonprofit fund dedicated to the treatment of rare diseases. The resources of this fund helped establish a biotech start-up that is advancing new therapies through clinical trials.

The risk involved in early-stage life science innovation makes it difficult to raise funds from increasingly risk-averse venture capital investors. By contrast, venture philanthropy investors are more willing to accept these risks. “Our goal is to de-risk early-stage research,” said the CEO of a foundation that focuses on autoimmune diseases. “Our measure of success is not the number of new therapies approved, but that new therapies are tested more frequently and quickly.”

To achieve the dual goals of social impact and business success, venture philanthropy investors are now expecting specific outcomes from their strategic partnerships. In addition to milestones in scientific development, many foundations are now sitting on management boards and are receiving returns on investment upon commercialization of the research that they have funded. The view on nonprofits as non-dilutive capital is outdated.

Besides funding, venture philanthropy can bring much more to the table, from access to top-tier research institutions to patient group connections. “We are fast, disciplined, and can get people started,” said the CEO of a fund devoted to neurodegerative diseases.

As venture philanthropy grows in significance for early stage investment, start-ups will find opportunities for new strategic partnerships. Scientist-entrepreneurs should feel encouraged to reach out to philanthropic funds, showcase the strength of their science, and demonstrate how their big ideas can align both commercial potential and philanthropic mission.

By Dennis Ford, Founder & CEO, LSN

LSN has been beseeched by many scientist-entrepreneurs and investors asking us to bring the Redefining Early Stage Investments (RESI) Conference to California to coincide with the well-known JP Morgan Healthcare Conference. Many CEOs of private biotech and medtech startups attend the JP Morgan event hoping to meet strategic pharma business development folks as well as investors who may be contemplating funding early stage development as part of a buy low, sell high strategy. Mid-level private equity, virtual pharma, and corporate venture investors are all in the mix.

Hosting our event to coincide with the JP Morgan conference makes good sense, as RESI is strictly focused on these same two groups: private early stage biotech and medtech scientist-entrepreneurs, who are primarily translational scientists and newly minted entrepreneurs developing devices or drug treatments, and early stage investors who are seeking emerging opportunities.

This is why at our third RESI Conference, we announced that our next event will be in San Francisco on January 13, 2015. Bringing RESI to San Francisco will be a great opportunity for all the early stage players to connect and form some dynamic relationships. California, here we come!

By Michael Quigley, Director of Research, LSN

On September 17th, more than 450 startup CEOs, investors, and service providers across 16 countries in the life science industry gathered for a day of partnering and compelling panel discussions in Boston’s historic Fenway Park. With more than 600 meetings booked, 14 panels focused on cutting-edge investing and fundraising, and 4 workshops, the stadium was buzzing with energy. However, the main factor that made RESI such a powerful event was the ratio of companies to active early stage investors. Exhibit 1 breaks down the types of attendees at the event.

Investors made up the largest single category of attendees, followed by biotech companies. The ratio of companies to investors was nearly 1 to 1, something that has become the norm at all RESI conferences. Service providers, including contract research organizations, I-banks, lawyers, and consultants, were also well represented, complementing the event’s strong investment focus. The number of companies developing devices and diagnostic equipment was also significant.

Analyzing the types of investors that attended RESI helps to further understand just what sets this event apart. Exhibit 2 highlights the diversity of capital providers that RESI brings to the table.

With venture philanthropy, foundations, and family offices representing the two largest investor classes, it is clear that RESI is an extremely effective venue for meeting and forming relationships with these highly sought-after investors.

Other more traditional investors, such as large pharma, venture capital, and corporate venture capital, were also well represented, diversifying the pool of capital available to the entrepreneurs that attended.

Angels and government organizations represented the smallest investor classes at RESI, as the majority of fundraising entrepreneurs are seeking to raise rounds larger than these investors can provide. However, as angels continue to syndicate for larger financing rounds and become longer term investors, they will represent an increasingly valuable opportunity for early stage companies.

During the conference, many fundraising executives and investors reported that the people they were meeting and the information they were gathering were well worth their time. We look forward to hearing more reports in the coming weeks so we can continue to make RESI an outstanding event for the industry.