Tag Archives: investment opportunity

Global Funding Insights for Digital Health Initiatives in 2018

12 Jul

By Ashley Durrer, Marketing Manager, LSN

This week I interviewed Colin Widen, the CEO of Boston Innovation Capital (BIC), Life Science Nation’s (LSN) wholly-owned broker-dealer arm, to learn where investors are allocating funds, and the current focus on healthcare advancement within the digital health space.

BIC works alongside LSN and our network of investors to support early-stage companies in forging connections with investors, major pharma firms, and other strategic players in the life science world. By managing clients’ fundraising campaigns and connecting them to investors who are a good fit, BIC is able to address its, and LSN’s, mission of advancing new and innovative technologies to the clinic.

Interview with Colin Widen moderated by Ashley Durrer

AD: With billions of dollars being poured into digital health, why the sudden increase?

CW: “Healthcare needs to find a way to pay for digital health now that value-based care and hospital incentives are aligned to support lower costs in healthcare with improved patient care. There are new potentials for change within the telemedicine space in light of ongoing healthcare reforms and debate.”

AD: How will that turn out for those seeking funding?

CW: “Digital health initiatives will be the least impacted by changes to the American healthcare system, making them prime opportunities for investment this year.

“There is a much lower cost to creating software, virtual platforms, compliance tools, etc. than creating advances in biologics, drugs, and other life science advancements, making digital health an increasingly popular space for investors. Successfully investing in therapeutics or medical devices requires a great deal of expertise, not to mention the increased risk due to the potential failure in clinical trials. On the other hand, software is a recognizable, lower cost, and scalable business model that is often also easily adaptable when regulations change.”

AD: Where does BIC fit into global funding from client perspectives?

CW: “BIC is working tirelessly to support digital health technologies that will have a real impact on the healthcare system for our doctors, nurses, and hospitals. This year BIC is focused on digital health technologies, assets, and virtual tools, which can support doctors’, hospitals’, and nurses’ efforts with patients. However, this currently excludes consumer-based products and electronic medical record (EMR) initiatives.”

AD: What are some examples of potential best-fit clients?

CW: “Some examples recognized in the market are pill dispensers and medicinal tracking for patient compliance, health portals for patients and doctors, mental health apps, medication tracking, patient monitoring and more.”

AD: What kind of client are you seeking now? Can you share a potential client profile?

CW: “Within our LSN network of investors, feedback clearly shows there is an increasing appetite to invest in niche digital health opportunities.

“Investors are seeking companies within the top-tier of their specialization, and a proven business model within the market. Often these investors want to see that the product, software, tool, etc. are viable, which means it’s already being used within the market e.g. hospitals. This also includes an accompanying value proposition for payors and the company is receiving ongoing revenue for that service.”

BIC Global Network of Digital Health Investors are focused on:

  • Funding of $10M-50M
  • Min $3mm+ ARR
  • Niche companies within the top-tier of their specialization
  • Currently avoiding pure EMR focused and consumer-based products

The Future of Digital Health

There are innovations happening every day to help improve access to healthcare. 2018 has already seen an increase in the debate over healthcare reform, rising insurance costs, and uncertainty of coverage for millions of Americans. Advancements in technologies and virtual tools for doctors and hospitals could really help to streamline processes and reduce overall costs for themselves as well as the patients they serve.

We can’t wait to hear what new innovations are entering the digital health space.

About Colin Widen, CEO

Colin Widen, registered representative, is a seasoned executive with 25 years of sales, trading and portfolio management experience in major investment banks. Colin joined Deutsche Bank where he led a team providing consulting services about alternative asset allocation strategies to family offices and smaller endowments and foundations. In creating BIC, Colin has combined investment skills with the robust investor network of LSN to offer a unique platform. Colin is a registered representative and holds Series 7, 24, 63 and 82 registrations. His specialties include reconstructing hedge fund portfolios. analyzing private equity holdings and helping with strategy and execution of capital raise initiatives across the spectrum of today’s life science assets.

About Boston Innovation Capital

Boston Innovation Capital (BIC), a wholly owned subsidiary of Life Science Nation Holdings, became a FINRA-registered broker-dealer in 2016. BIC works alongside LSN’s other two divisions (LSN’s Investor Platform and Company Platform, and the RESI Conference Group) to support early-stage companies in forging connections with investors, major pharma firms and other strategic players in the life science world.

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Developing a Global Target List of Prospective Investors

17 Oct
By Max Klietmann, VP of Marketing, LSN

Before moving any further, it is important to address a critical piece of the equation while looking at structuring an institutional-style fundraising campaign. The issue of referral vs. fit is one of the most misunderstood parts of the fundraising process, and countless companies fail to raise money, simply because their fundraising executives won’t believe that a cold email can be effective. We at LSN speak to a lot of entrepreneurs who refuse to accept that outbound marketing works, and it is our belief that this is due to an unwillingness to commit rather than genuine disbelief. Once you have made the commitment to go outbound, things become a little easier.

On to the issue of the cold e-mail. It has been proven time and time again that cold emails with diligent follow-up targeting the right group can be extremely effective. This is primarily because cold emails help you to reach the target person – with cold emails you can immediately reach exactly the right people in the investor organization, and that makes a significant difference. Of course this won’t work with just a random list of emails, you need a targeted list of specific entities. Beyond that, you need to reach the right people, not just the right firms.

Now that we’ve covered that, let’s look at the potential pool of investors and narrow it down to a target list. There are two types of investors: mandate-driven and opportunistic. Mandate driven investors are usually restricted to investing in opportunities that match a particular main sector, subsector, development phase, growth phase, indication preference, capital structure or need above or below a certain amount of investment. These restrictions are formed at the inception of the fund in order to provide serve as unique investment vehicle that matches the investment interests of the limited partner’s participating in the fund. By limiting the investment opportunities the limited partners can benefit from the unique risk and reward characteristics of the fund. For example an investor might specialize in investing in late stage oncology opportunities that requires equity financing. As a result opportunities outside of the mandate’s scope are immediately disqualified. Opportunistic investors on the other hand are defined by their lack of a mandate driven investment strategy. As a result they will not disqualify opportunities and therefore tend to have a broad range of investments.

As a fundraising executive you must understand each investor’s investment criteria, and make an effort to target those that are a match your company’s unique investment profile. Otherwise, you will find yourself wasting your time reaching out to investors that are not a fit. Note however, that your list should not be restricted to only fits for your current round, as you want to create a dialogue with investors that will be a fit further down the road. That way, when the next fundraising hurdle is reached, you already have a dialogue with the next source of capital.

Here’s a good benchmark to use: for every 100 investors that you reach out that that are un-validated without any clear indication of potential fit, a hit rate of 1-2 is the absolute upper limit. However, of a list of 100 investors with a pre-validated declared interest in an opportunity like yours, one should expect to schedule a conference call or meeting with 15–20 of those prospects. This is in stark contrast to the one or two prospects that you will yield from a un-targeted list. Assuming you are able to obtain a vetted target list and you’ve taken the time to evaluate your resources for follow-up, you can now get an idea of how many investors you will need on your email target list.

Generally, a fundraising executive starts be mining their internal database of potential investors—a list of current, past, and prospective investors—which they have built up over the years. This is a start, but your work is not done. To augment such a list, you can purchase one of the hundreds of commercially available databases, or take some time to research potential investors on your own.

Researching investors on your own is time consuming process, and painful process. Sophisticated investor database providers on the other hand can provide you with a list of potential investors that meet your investment profile with a couple clicks. They do this by employing staff that actively interviews investors regarding their investment preferences. Although these providers charge a fee they can save you significant time and effort.

 

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