Tag Archives: allocating

LSN Summer Reading Series Chapter 12: “Anatomy of an Allocation Process”

13 Aug

By Lucy Parkinson, Senior Research Manager, LSN

In recent weeks we’ve covered how to make a global target list of potential investors, and the basic techniques of phone canvassing and email outreach required to initiate dialogue. This week, LSN takes a look under the hood of the investment process. How do you turn that initial spark of interest into an allocation check?

This chapter explains how you can move the process forward through the pipeline and describes the people you’ll have to work with in order to make the allocation happen—from the initial gatekeepers to the final decision-makers. We look at how to make a good first impression and how to run a productive meeting with an investor, and explore what will happen during the due diligence process. If you’re preparing to meet with a potential investor in the near future, this chapter will be invaluable.

Click here to download/print the chapter PDF

Next week, join us for Chapter 13: “Straight Talk About Finding, Vetting, and Closing Capital.”

Enjoyed the preview? Buy now from Amazon.com or Barnes & Noble

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Your Target List: Who Is Not Investing

3 Jul

By Michael Quigley, Director of Research, LSN

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As a fundraising entrepreneur, knowing who is actively investing and who is not has the potential to increase the efficiency of your campaign by 30%, if not more.

Who is “not currently allocating” is one of the most valuable data points that we gather on the life science investment community. In this category we put any investor who has made investments in the space over the past five years and is in the process of fundraising, winding down a fund, or moving out of the space completely. Of the investors we have spoken to over the past year, we have found that approximately 30% are not currently looking to make new investments.

Why is this important? Because investors who aren’t allocating tend to be the slowest to respond to emails and voicemails, which can mean weeks—if not months—of wasted effort, as you try again and again to reach investors that are not seeking opportunities.

When we analyzed our data further, things got even more interesting. Of the investors we have spoken with who are not currently allocating, two-thirds are VCs; of the investors who are allocating, only one-third are VCs. This demonstrates a point we have discussed in this newsletter before: a large number of previously active life science VC investors are now raising their own funds, winding down, or phasing out of the life science sector.

The bottom line is that by knowing who is not actively allocating, you can identify all the players in your space who are seeking opportunities and substantially increase the efficiency and likelihood of successfully raising capital.  Too often fundraising executives use a shotgun approach, reaching out and trying to touch everyone who may or may not be investing in their space. This tactic creates a lot of needless noise and wasted time for both parties. A little extra knowledge regarding the current state of the targeted investor can go a long way toward making a fundraising executive much more productive in seeking capital.

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