How to pitch to a Life Science VC Investor
written by Dr Christoph Kausch - Founding Partner and CEO at MTIP.
Pitching a venture capital fund is not an easy exercise for many entrepreneurs because you may never get a second chance to make a good first impression!
When you are starting a presentation about your company, focus on setting the scene by describing the current environment with its related challenges and pain points. Then present the unmet medical need, which must be clearly identified in order to demonstrate how you are solving the issue and why your product is better than its competitors.
Entrepreneurs must be able to present the value their company is adding to stakeholders because healthcare is a value-based market where only ‘must-have’ solutions can survive and because insurance will never pay for ‘nice-to-have products’. The general constraint on healthcare spending continues to accentuate this fact.
The goal is to show that your solution has a competitive advantage and you are able to secure it with key assets such as (clinical) validation data, patents, a proprietary data set to train your machine learning or an existing customer network. These kinds of assets add a lot of value to your company because they de-risk the investment in the investor’s eyes.
A good value proposition with a sizeable cash amount is not equal to success without cornerstones demonstrating a feasible plan and the right capabilities to execute the vision. Your roadmap should include value inflection points, usually defined by target milestones, their related activities, and how the money raised is allocated over time.
This planning exercise is important and often underestimated by companies, but it provides clarity for an investor about the management’s view. The team must demonstrate technical knowledge and expertise, but also sales and marketing skills.
Exit scenarios need to be addressed with potential future buyers and timelines because most venture capital funds are closed-ended (normally 8-10 years lifespan), which means they need to be liquidated in a certain timeframe. Keep in mind that exit triggers the venture capitalist’s strategy!
The first interaction between an entrepreneur and an investor will start at two different sides of the table but might end up side by side, in the same boat. At the end of the journey, transparency, honesty, and open communication are essential for rowing faster together.