The Biotech and Money Investor Perception Survey 2018 found that more than four-fifths (85%) of buy-side respondents feel that 50% or less of the life science management teams they see each year present well to them. With that rather disappointing figure in mind, we have outlined some considerations that life sciences companies may wish to bear in mind when preparing to pitch to investors. These tips draw on the feedback of 18 leading VC, CVC, and angel investors who participated in more in-depth telephone interviews for the survey.
Know your audience
Adapting a presentation in line with an investor’s areas of focus can help to better demonstrate potential points of alignment between the two parties. It can also assist in determining the level of detail or background required for inclusion in the pitch. As one VC interviewee said: “[Management teams] should tailor the presentation to the people they are talking to. It’s different if you’re talking to a dedicated life science investor or a more general investor.”
Researching the investor or investment fund beforehand may also boost a company’s chance of standing out in what is a competitive field. “They should put themselves in the shoes of the investor. They should realise that the investor sees 300 or more business plans a year. You need to have something to get [the investor’s] attention, [for example], that could be personal links or it could be that you’re [working] in the area where the fund has invested before,” explained another VC investor.
Spell out the story
While the science is clearly an important part of a presentation, scientific detail should not necessarily be the overriding focal point. “A lot of the people that come to pitch are in the trenches, they live and breathe the science all day, so it’s very hard to take a step back and pitch the big picture,” stated one VC investor.
The presentation should outline what an innovation means for patients, and its potential impact on the healthcare system, as well as clearly communicating differentiation. A CVC investor said: “A crisp story is not spending 15 minutes on your technology and science. Tell us what you’re going to do with it, and why it’s unique. What is the distinct patient population that it’s going to address? And why is it unique there?”
A properly prepared pitch deck, well-articulated story, and well-thought through business plan can pay dividends, but passion and enthusiastic delivery should not be forgotten. “People who are entrepreneurial, who have masses of energy and passion about what they are doing, generally come across better,” noted a VC interviewee.
An awareness of the regulatory and commercial landscape can also serve to demonstrate that the viability of the product, and the opportunity it poses to investors, has been considered. This means taking a realistic, measured view of what will be required to get a product to market or to generate acquisitive or partnering interest. “Some [teams] don’t fully appreciate the funding need; they underestimate the amount of time to recruit patients to clinical trials, they underestimate the delay in getting different types of products approved in Europe, particularly at the moment with changes in the Medical Devices Directive,” said a VC interviewee.
This might also involve looking at opportunities and obstacles by working backwards from the end goal. As a CVC interviewee explained: “The bottom-up analysis is often done, so say from a molecule, a service, a product. But the top-down part is often missed. From the end point back, you have all these very interesting problems or challenges, which makes for discussion.”
Be prepared for discussion
Finally, be ready for probing questions and transparent discussion. When making an investment, many investors will offer a company support beyond just funding, but they will first need to know where a company’s pain points lie. The presentation can provide insight into key data and messages, before acting as a jumping off point to further discussion. As one VC interviewee noted: “With VCs, you need to be prepared for a fluid conversation because they’ll ask questions from all angles.”
This article features in the Investor Perception Survey 2018. Download the full report to read through this year's survey results and learn more about the investment community's expectations for Europe's life sciences sector:
You can also download a PDF copy of 'Top tops for refining your pitch' here.