5 Steps to Securing Life Science Venture Capital
For most early-stage startups, securing venture capital is the most important first step towards sustained success. You see, venture capital can give your business the funds it needs for the next stage of growth.
A record $5.5 billion in venture capital went to biotech companies in Q1 2020. However, in light of the COVID-19 pandemic, experts agree that securing venture capital will become increasingly difficult in the coming months.
"You're not going to see the impact of this particular pandemic on the overall numbers until you start to see close maybe toward the end of April and on," said Jon Norris, a managing director at Silicon Bank who focuses on life science investment. Booth expects that $5.5 billion number to drop by more than 35% over the next few quarters, equating to more than $1 billion lost.
So what does your growing organization need to do to secure life science venture capital during these turbulent times? We'll give you the expert steps needed to raise venture capital and scale your business.
5 Simple Steps to Secure Life Science Venture Capital
As an industry-leading eQMS provider, we've worked closely with growing medical device manufacturers. Many of these new life science organizations have already raised a new round of venture capital or are in the middle of fundraising.
1. Know Your Worth
Most investors are looking for exponential growth potential. If your organization fits this criteria, stand behind your unique worth. What is it that your organization gets right, and what's in it for the investor should she or he get involved right now?
A platform like Qualio can grow with your team on this path, so you don’t have to change software during crucial stages of growth—such as the startup and scaleup stages. Our eQMS software can support a team of up to 500 employees effortlessly. Additionally, Qualio is cloud-based and includes all the tools you need to bring your products to market quickly. Some of the most popular software features include CAPA audits, document control, non-conformance, and training.
RELATED READING: 12 Questions to Ask Before You Buy an eQMS
2. Create a Business Plan
A simple business plan will make a good first impression. In fact, a business plan is essential for securing VC funding. If you expect investors to take you seriously, a well-through-out business plan with a clear growth trajectory is critical.
To refine your pitch, consider the following:
- Who will benefit from your product?
- What problem does your product solve?
- How are you unique situated to serve prospects better than your customers?
3. Select the Right Investors
Be selective with the firms you approach. Choose an investor with an in-depth understanding of the healthcare industry. The ideal firm should have experience working with startups like yours.
A knowledgeable firm that routinely finances startups is going to know the common problems you can expect to encounter. Their advice and guidance should help you avoid those issues and smooth the path for your success. Don’t go into business with a firm that doesn’t mesh with your company culture. You're going to spend many hours communicating with your investors, so everyone needs to get along well.
4. Build a Relationship
Spend time with the investors and build a relationship. Remember, VC is more than just funding; it's also leaning on the investor for their experience and expertise. During critical stages of growth, you'll want to be able to ask these investors questions. By building a relationship, you can have an open and friendly dialogue.
Additionally, most VCs won't take up unsolicited pitches from startups they've never heard of!
5. Keep Pitching
Try and try again! If your pitch wasn't accepted, use it as a learning opportunity. Ask the investor to give you critical feedback. What was it that they didn't like? Are there any suggestions for future improvement? Creating a winning pitch takes constant refinement and updating.
Unlock Powerful Venture Capital for Your Medical Device Company
In your search for the best venture capital for your growing medical device company, you'll need to have the processes and procedures in place to further showcase your industry expertise and know-how.
As a best practice, consider investing in an enterprise quality management system right from the start. The right eQMS can add significant value to your organizations. We believe that we are the best eQMS for growing life science organizations, but don't take our word for – read our reviews on G2.
To help orient your life science organization toward the right eQMS, we recommend downloading our free buyer's guide: 12 Questions to Ask Before You Buy an eQMS. Consult this helpful guide before wasting valuable time, energy, and capital on the wrong solution.