5 tips for pitching your life science company to investors
Walking into the room to pitch your company or product to investors can be the decisive moment of your career.
Get it right and a tidal wave of capital propels your business into its next chapter. Your company unlocks the liquidity and breathing space to evolve. Growth, reputation and the thrill of unleashing your innovation on the world await.
Get it wrong - like about 90% of start-ups - and your business can collapse into the ether. The faucet of external investment stays off, your capital dries up and your business and product vanish.
Needless to say: wooing your VCs, investment managers and angels is a skill you can't afford to ignore.
We've assembled 5 top tips to help you as you walk into that room.
1. Get help from marketers
You're reading this article right now.
You know what it's about and how it's going to help you.
And you know you're on Tip #1 out of 5.
The format, goal and value of this blog post is clear in your mind after just a few seconds.
Your pitch deck can't afford to be any different - and for that you should consider getting help from your marketing department or, if you don't have one yet, a friend, acquaintance or consultant in the field.
Life science founders and innovators are usually highly intelligent, driven and, of course, scientifically minded, with multiple degrees and a deep grasp of niche scientific and technical concepts.
None of that necessarily corresponds to communication your investors will appreciate.
Your investors don't necessarily care about the deep scientific minutiae of your product (a broad overview of its functionality and value is fine) and don't necessarily want to wade through pages of complex information. They aren't scientists and they want the bottom line in a matter of minutes.
What are you pitching?
What's the market fit?
And how will it generate value/save costs compared to current treatment offerings?
The format of your deck should be concise, pointed and directly targeted at these questions while delivering emotional value to your listeners.
In this regard, life science companies are better positioned than, say, a financial or agricultural pitch: your product could save lives, ease pain, stamp out disease or raise quality of life, so don't be afraid to call it out.
Tell a story with a beginning, end and hook. Make the format easily accessible, clear, and as pictorial as you can. Pull clinical data in, but summarize it to quickly get to the bottom line of what it means. Touch on unmet human needs and bring your proof of concept to life. If you already have customers and patients, tell their story and how you've helped them too.
Qualio customer Heather Underwood, CEO of EvoEndo, recently went through her own Series A funding journey and offered this tip:
"What makes EvoEndo unique is the strong story we have and the very important clinical need we're addressing.
A strong value proposition, a story, and the evidence to support what you're doing, all go a long way.
Lots of our investors are family offices, committed philanthropic individuals who really care about the mission. It's important to them we get this product - unsedated transnasal endoscopy - out to the world.
That's really what made raising our funds possible."
- Heather Underwood, CEO, EvoEndo
And when you walk out of the room, ensure your 30-second elevator pitch lives on in the memories of your audience.
For all of this, a marketing hat is invaluable. Run your deck past a marketer or two before it ever gets in front of your would-be investors.
2. Be up front
Your pitch is no time to be shy or overly deferential.
Having a solid plan to run by your investors will resonate much more than a passive 'over to you'.
Ensure your pitch contains:
- A ballpark figure request, as specific as you can be, with details of how you'll spend it
- Time horizon and time-to-value estimates
- Business model predictions and recommendations
- Any other specific requests
Pitching this information proves you've thought about your investment partnership from both angles and have precise, actionable next steps lined up.
3. Soothe the nerves
No, not your own nerves.
As you enter the room, your investors' default mode will be cautious and reserved skittishness.
Why? According to Harvard Business School lecturer Shikhar Ghosh, only 25% of VC investments generate a return for their investors, and in 30-40% of cases investors lose their entire investment.
Backing a winning horse is notoriously difficult and your investors will be listening intently for a gap, oversight or unrealistic assumption which gives them an excuse to turn you away.
Putting them at ease by anticipating and answering these reservations is key.
Consider these questions:
- How will your business manage the increasingly complex quality and compliance demands of the life science market and secure regulatory approval?
- How will your product incorporate user needs and requirements?
- How will you ensure you meet or surpass your timelines for getting to market and delivering value?
- How have you prepared for unexpected contingencies: macro- and micro-economic developments, supply chains, evolving markets, regulatory change?
For all of these questions, a robust and functional quality management system is a vital answer - and will empower your business to meet customer requirements, mitigate risk and grow sensibly and sustainably.
4. Bring the company to life
Closely connected to this, your investors will feel more confidence in your pitch if it touches on the broader leadership team and their expertise, competence and strengths.
As we've seen in Tip #1, this should be concise and appropriate - but don't be afraid to emphasize your network, any previous successes of your partners, field superstars already aligned with your business, and so on.
Working with a sector expert with a Yale degree, 2 patents and 80 paper publications?
Just hired a new CFO with a track record of steering scale-ups in the right direction?
Your sales director's exceeded quota at his last 3 positions?
Call it out. Life science companies are full of hungry, wonderful people - why should yours be any different?
5. Get non-dilutive funding too
Investors prefer to jump onto a moving ship.
Securing other forms of funding proves the potential and promise of your business and makes you more likely to unlock new rounds of investment.
The life science industry receives some $3b in non-dilutive grants and contracts every single year. The National Institute of Health (NIH) alone awards over $1b in Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) grants.
Securing a slice of this funding for your business demonstrates that you've convinced another room full of listeners that your company or product is worth supporting - even without relinquishing a portion of ownership.
Want some help?
And if you do have non-dilutive funding to show off, make sure you break down how you spent your grant or award too, and the value you've seen and delivered from your funding!
Want a real life science investment success story?
Try our podcast with Dr. Jen Baird, who's done it all: raised $30m of angel and VC funding, gave her investors a 5x return, then went back and started a new venture with Series A all over again.