When companies pitch VCs, there is often a narrow window in which to pique substantial interest. If the deal fails to reach “activation energy” in time, it can fall to the end of the queue. So how do companies prepare for a fundraise such that they can keep momentum in...1/16
...the process? A few ideas: 1) make sure your non-confidential and confidential decks are ready to go and that they’ve been vetted by people with varying levels of closeness to the company. E.g., the board should opine. You can also get an early read from “friends of...2/16
...the family” – VCs who have a close relationship to management or the board. Ideally the deal is something that could be a potential fit for them, so they’ll pay close attention; but the pre-existing relationships give them an incentive to offer more frank feedback...3/16
...than usual. You can also ask a friend or family member who is not in the biopharma industry at all to sit through a presentation. If it’s clear enough for them to generally follow the thesis, you know you’ve achieved clarity. Anything that’s central to the investment...4/16
...rationale should be spelled out, not left to interpretation. When you’re deciding what to include in your non-confidential deck, remember that you need enough info in the deck to entice the investor to get a CDA in place. 2) Consider putting together a “frequently...5/16
...asked questions” doc even before you launch the fundraise. These should be q’s people are likely to ask, as well as ones you wish they would ask! As you progress through your meetings, you will learn what elements of the story raise q’s and you can add to this file. Why...6/16
...bother with this? Well, it will save you time in the long run because it may satisfy some investors who would otherwise send you similar, but not wholly overlapping, Q&A. Second, it can accelerate the diligence process for an investor who hasn’t yet reached the level...7/16
...of conviction needed (or hasn’t yet had time) to write out their own Q&A. Third, it can be a useful document to share with board members, advisors, etc., who might be out talking about the company with potential new investors. Finally, it adds to an impression that the...8/16
...management team is highly competent, strong communicators, etc. 3) Create a list of academic founders, advisors, KOLs, clinical investigators, consultants, etc. who are affiliated with the company and might be helpful to investors. Ask these folks at the beginning of...9/16
...your process if they could make themselves available for calls with VCs. While you may want to confirm with them again before each intro, you will at least know who is enthusiastic about these convos. Also think about what information each person might be most equipped...10/16
...to share. Then be ready to suggest these to investors who are under CDA and doing work. Just be careful not to suggest people who aren’t really up to speed on the science or who you aren’t sure are wholly enthusiastic about your approach! 4) Ideally, have your data...11/16
...room up and running before you launch. Make sure it’s well-organized and be cautious about different “levels” of the data room (this approach has some advantages, but can also turn some people off). 5) Consider offering up (by email, not just in the data room) some...12/16
...additional, easily digestible pieces of information – e.g., slides laying out your view of the competitive landscape or market potential, white papers on elements of your thesis that benefit from being spelled out in a Word doc, management bios. Generally you’d offer...13/16
...these up after a CDA is signed but some might make sense even before that. Also have a set of 3-4 key papers that you can send along to help people get more familiar with your target, technology, etc. This general approach may be particularly helpful if you prefer to...14/16
...work from a shorter non-con deck to reduce time in initial conversations. 6) Plan your process carefully – which investors you’re going to go out to in a first wave, second, etc. This should be a pretty tightly controlled list; e.g., beware of your board members...15/16
...deciding to introduce you to every firm they happen to speak to. While these may all be great firms, you don’t want to be so busy with first meetings that you don’t have time to help potential leads push toward a term sheet. Good luck and have fun! 16/16
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