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.