By Dennis Ford, Founder & CEO, LSN

At LSN, my five business development executives talk to about 35 CEOs each week, all of whom are in fundraising mode.  If we also consider the conferences and seminars we attend, LSN’s business development staff has spoken to close to a thousand fundraising executives since the company was founded.  Now, that is not a bad sample size.  At LSN, we always begin with three questions that will help us net out the status of the entrepreneurs we are starting a dialogue with.

The first question is, “Are you indeed fundraising?”  One would think this question is a binary matter…but it’s not.  The answers range from “Yes, we’re totally dedicated to raising money,” to “We are just sticking with our private network of investors,” to “We plan on starting a campaign soon.” What these answers reveal is how committed you are to raising capital, and that’s why it’s the most important question for us; LSN engages only with dedicated fundraisers.

The second question is, “Do you know how long it will take to raise a financing round, from start to finish?”  This is a bit of a trick question.  From inexperienced entrepreneurs and from executives who haven’t been fundraising as of late, we often hear answers ranging from 3-9 months, which have found is highly optimistic; in our experience, closing a round usually takes 9-18 months.

The third question is, “Do you know how much a 12-month fundraising campaign will cost?”  This question provides some interesting answers.  Many CEOs haven’t drawn up a yearly fundraising budget at all, and when they put pen to paper to quantify the issue, they realize that it will take a lot of money to go out and raise money.  Figure 1 provides the typical cost of the essential components of your campaign:

We use these three questions to gauge whether the CEO has done their homework on what it will take to raise a financing round and has a good grasp of the commitment required.  There is a lot more to raising capital than simply declaring that you’re raising capital and then staying within a limited region or a small network.

By Michael Quigley, Director of Research, LSN

Cardiovascular disease, the leading cause of death in the U.S., represents a massive market for life science products. LSN’s tracks both companies working on new technologies in the cardio space as well as investors looking to fund those technologies through our two data platforms. Looking at both companies and investors can provide a dynamic picture of the space as a whole.

Of the cardio technologies currently in development or in clinical trials worldwide, LSN has identified 561 that are therapeutic and diagnostic products and 238 that are medical devices. We then looked at cardio sub-indications to determine which ones have the most new-product development. (See Figure 1.)

For entrepreneurs working in these sub-indications, this figure should provide some insight into the competitive landscape. Products targeting hypertensive diseases, for example, have significantly more competition than products targeting chronic rheumatic heart disease. When seeking capital, it is crucial to understand the products you are competing with and what differentiates yours so that you can convince investors that your opportunity deserves their capital more than others.

The vast majority of therapeutics and diagnostics products and medical devices that are targeting cardio are from companies based in the U.S. However, several other countries are a source of innovation as well. (See Figures 2 and 3.)

It is interesting to note that while Israel isn’t among the top 11 countries for emerging cardio therapeutics and diagnostics, it is in second place in the medical device space. Asian countries make up three of the top five countries developing cardio therapeutics and diagnostics, while only Japan is in the top 11 for emerging cardio devices. Also worth noting is the significant innovation in both areas from Germany, the United Kingdom, Canada, and Switzerland.

Now let’s take a look at which countries and regions cardio investors are interested in based on their current exposure. (See Figure 4.)

Most investors are looking to invest in the U.S, which is in line with where the majority of innovation is taking place for this indication. Investors are also directing their attention globally and to Western Europe, Canada, and Eastern Europe respectively—areas where we also found innovation taking place. An area that appears to have a significant imbalance between innovation and investment interest is Asia, particularly in the therapeutics space. We have recently increased our efforts in this region; however, it still could remain true that the emerging Asian cardiovascular market is currently underserved when it comes to capital.

The types of investors interested life science products targeting cardio are fairly consistent with what we have seen in the life science space as a whole. (See Figure 5.)

All ten categories of investors have at least some level of interest in cardio, and as we have noticed for other indications, venture capital, private equity, and family office investors have the most. The interest across all ten categories highlights the importance of looking at all classes of investors when fundraising to help increase your odds for success. We look forward to providing this level of analysis in other indications areas in future issues, so be sure to keep an eye out for the indication relevant to you.

By Tom Crosby, RESI Conference Manager, LSN

Last week, LSN announced the RESI Conference’s new Commercializing Medtech Innovation panel, which will bring insights from investors who focus on devices that are nearing commercialization. This week, LSN is proud to announce another brand new panel in the Medtech Investor Panels track — this time, featuring investors who focus on earlier-stage opportunities. The In Development / Clinical Investors Medtech panel will offer viewpoints and advice from a diverse group of investors.

Moderated by Vicki Anastasi, Vice President & Global Head of Medical Device and Diagnostic Research at ICON, the audience will hear from:

Cary Adams, Founder, Almond Tree Capital

Jeff Sheldon, Managing Director, CitareTX

Ibraheem Badejo, Senior Director, New Ventures, Johnson & Johnson Innovation

Doug Fisher, Partner, InterWest Partners

Panelists will share their opinions on why medical device investments have been surging in 2014, and how entrepreneurs can capitalize on the trend. What is the path of least resistance from prototype to allocation? How do device entrepreneurs identify and qualify organizations that are actively investing early? What are the pros and cons of taking a venture capital investment, and what are the roles of other sources of funding? With a panel drawn from a wide variety of backgrounds, the session will offer an interesting perspective for any device company looking to take its technology to the next level.