This past week, David H. Crean, PhD, Managing Director and head of our Life Sciences and Healthcare Practice Group, spent time reviewing the >400 life science opportunities that were presented to him and our investment banking firm in 2017 in which entrepreneurs and business owners were looking for either capital financing, sell-side M&A, strategic advisory services or partnering/ licensing. Nearly invariably, each investment pitch lacked the complete and necessary material to tell the comprehensive story that would be compelling for an investor to write a check. These entrepreneurs are very smart and passionate about their mission but need to recognize and think like investors or strategic buyers. Investors see and hear many investment opportunities and you need to be differentiated and stand out from the masses.
We'd like to provide our guidance to entrepreneurs and future visionaries on what we have seen as successful investor pitches and the process that improved the chances of landing a transaction which supports their growth or exit strategies. Two good resource articles on what VC’s/ investors expect and how they view the materials and interactions with investors are referenced here and here. We often refer our life science clients to read and be aware of these important perspectives, as well as other resources. David also previously authored a related article on this topic that can be viewed here.
When David is approached about a life science company and their needs for either growth equity, debt financing, partnerships or a sale, he generally asks for two pieces of information: 1) a one or two-page summary of their business; and 2) a short slide deck that the company uses in a 7- to 10-minute elevator pitch. The 1-2 page summary should include the following, each with a concise, single paragraph and/or bullet points. It's not a full business plan. Keep it concise.
• Company Contact Info – name, address, website, key management, board, advisors, contact info for CEO/ CFO/ CBO.
• Company Overview / Executive Summary of Investment Thesis– elevator pitch summary of the company and investment.
• Market Problem – what problem / opportunity is the company trying to address?
• Solution and Competitive Differentiation– What product / service is the company developing to address that market problem? Why is it different?
• Market – Short description of overall market segment (overall size, revenue, segmentation and competition)
• Regulatory/ Product Development – What is the regulatory status or product development plans for the company’s product / service?
• Intellectual Property – Describe any patents granted, patents applied for, licenses, university/other commercialization agreements
• Business Model/ Financials/ Use of Proceeds – How will your company make money? How will investors make money (exit, IPO, partnership, etc.)?
• Deal Terms – Prior funding summary, pre-money valuation, terms for current raise or what the company is looking for in a partnership or exit.
Please NOTE: the majority of the slide deck should not be composed of explaining the science and MOA. Rather try to convey the business and investor case.
The slide deck needs to address the above points as well but in a presentation format. Include graphics, pictures, timelines, prototype examples, and simple tables to drive home the message. Greater detail on financial plans is important to give the investor comfort that there is enough money to execute on the plan and get the company to its next value inflection or liquidity plan. Once again, the presentation needs to tell a story that captures the essence of the company and why this is a great investment opportunity.
If you can’t convey this information and deliver a compelling pitch, then you are likely lacking readiness for a serious investor to get involved. If you wish to learn more, please contact David at email@example.com. He'd be happy to assess your readiness and explore your objectives.
Article written by David Crean and first published on LinkedIn.
Objective Capital Partners is a leading mergers and acquisitions (M&A) advisory firm whose Principals have collectively engaged in more than 500 successful transactions serving the transaction needs of growth stage and mid-size companies. The executive team has a unique combination of investment banking, private equity, and business ownership experience that enables Objective Capital Partners to provide large enterprise caliber investment banking services to companies with annual revenues up to $500MM. Services include sale transactions, equity and debt capital raises and comprehensive advisory services. The firm uses a proprietary process to work to achieve maximum company valuation, premium pricing, and high client satisfaction rates post-sale. The firm’s industry expertise includes life sciences, business services, software and hardware technology, aerospace/defense, IT services, healthcare services, energy services, biotech, consumer products and specialized manufacturing. Additional information on Objective Capital Partners is available at www.objectivecp.com.
Securities and investment banking services are offered through BA Securities, LLC Member FINRA, SIPC. David H. Crean is a Registered Representative for BA Securities. Objective Capital Partners and BA Securities are separate and unaffiliated entities.
This article is provided for informational purposes only and does not constitute an offer, invitation or recommendation to buy, sell, subscribe for or issue any securities. While the information provided herein is believed to be accurate and reliable, Objective Capital Partners and BA Securities, LLC makes no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person.