By Skylar Jacobs, Business Development Manager, LSN
As Next Phase discussed two weeks ago, the world of early stage biotech and medtech investment is far less than straightforward and CEOs often have limited resources for learning where they fit into the capital landscape. In this article, we’ll look more closely at how LSN designed the LSN Investor Platform to address this problem.
Finding and Connecting with Investors that are a Fit for Your Company
LSN has found that the biggest difficulty for fundraising executives is identifying active investors that are a fit for their stage of development and product. When raising a seed or series A financing, most executives go straight to a few brand name VCs and angel groups in their backyard, and, mistakenly, think this is going to get the job done. The reality is that fundraising is a numbers game, and there are thousands of groups across the world that are not currently known to the fundraising team, but may be a great fit for your venture. The problem is how to efficiently identify these groups, if they are a fit and, most importantly, how to reach them.
Global Matching Platform
Through this outreach, LSN has created the LSN Investor Database, giving fundraising executives the ability to generate a global target list of investors who are a fit for their company. Like all databases, there is a front end of the active players – which is approximately half of our total network– which includes profiles of firms in active dialogue with the LSN Research Team and profiles of firms that have enough publicly available information/contact details to be listed. The back-end of the database contains investors that have requested that LSN match them with fundraising companies but prefer not to be listed in the front end, investors we have identified but are not currently investing, and profiles that will be moved into the front end once we have enough data to justify value. The good news is that we think we have identified about 85% of the global early stage investors. The functionality of the LSN Investor Database allows you to easily apply filters to generate a list of firms who are a fit for your company, which usually leaves about 300-500 firms as initial targets to begin initial qualification and potential interest.
Pricing
The LSN team has conducted an analysis of hundreds of successful fundraising campaigns and has determined that, on average, a start-up company can expect to spend between $70,000 to $100,000 on their fundraising efforts. These costs include: creating and maintaining your marketing materials and web presence, business trips, conferences, partnering road trips and other miscellaneous costs.
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Campaign Component
|
Typical Cost
|
| Creating and maintaining your branding, messaging, marketing collateral and web presence for a year |
$25,000 – $30,000
|
| One conference per quarter, travel and expenses |
$12,000 – $20,000
|
| 1-2 week road trip per quarter, two people |
$10,000 – $15,000
|
| Global target list of investors and campaign infrastructure |
$10,000 – $12,000
|
| Legal and professional fees |
$10,000 – $20,000
|
|
TOTAL
|
$67,000 – $97,000
|
The LSN Investor Platform is competitively priced at $6,995 for an annual subscription to fundraising executives. This pricing is based upon making you, the fundraiser, more effective and efficient by dramatically increasing your access to global investors that are a fit for your company’s stage of development and product. Pricing justification is that the annual subscription costs:
- 10% of typical fundraising campaign costs
- Approximately $25 per targeted investor profile
The LSN Research Team has done the work for you to collect details regarding exact investment interests, typical allocation size, fund vintage, company management team requirements, past investment history, and personal contact details for Partners, Directors, and C-Level Executives at each firm – information that is rarely found in other investor profiles. The price of the LSN Investor Database includes: initial identification of our client’s global target list of 300-500 investors, a consultation on your introductory marketing materials (intro email and deck), campaign outreach advice, and email alerts including updates of investors added to the platform who are a fit for your company. Additionally, the LSN Investor Platform includes an export function that provides startup CEOs with data that can be imported into a CRM system to manage outreach and track the progress of every investor relationship. LSN has already integrated with SalesForce.com to make this process seamless for our clients. In total, LSN offers a complete package for fundraising executives to ensure they have the strategy and investor targets necessary to conduct a successful capital raise.
The Redefining Early Stage Investments Conference Series
In addition to the LSN Investor Platform, the RESI Conference is another tool provided by LSN for fundraising CEOs. The RESI conference allows entrepreneurs to meet face-to-face with up to 16 relevant investors in one day and begin to develop a personal relationship with them. Subscribers of the LSN Investor Platform have a powerful tool that allows them dig into the investors’ profile prior to the meeting to understand the investors’ interests and preferences, greatly increasing the quality of an intro discussion and making the best use of their face-time. Using the LSN Investor Platform and RESI conference in parallel creates a tremendous value for any fundraising CEO in the early-stage life science space by not only providing the connections, but also by facilitating face-to-face interactions.
In Summary
LSN estimates that approximately 250 clients who read our CEO’s book, The Life Science Executive’s Fundraising Manifesto, purchased the database, and participated in the RESI Conference Series have raised upwards of 350 million dollars. LSN’s value add to a fundraising CEO and scientist/entrepreneur is equivalent to 5 years’ work by 6 LSN research analysts, curating your Global Target List (GTL), which is at least 50% of the effort of raising capital – finding investors that are a fit for your stage of development and product.
The personal connection between the LSN research team and an investment firm allows LSN to capture and utilize a unique flow of information and provides an unmatched tool for fundraising CEOs to understand the players in their space, their nuanced preferences/strategies and a way to begin a dialogue with them. No other service or data provider comes close to the focused, high touch, relationship-oriented nature of data collection and maintenance.
