Our Story

When raising capital, the earliest stage companies (seeking between $15k-2mm), and the early stage companies (seeking between $2-10mm) face major hurdles: the first is a general lack of experience and consistency presenting their company metrics: team, technology, data and market. The second major challenge these companies face is the necessity of leaving their local geographic region and committing to developing a strategy to target global players that are a fit for their stage of development and their product set. It is essential to create a Global Target List (GTL) of investors and partners that are a fit and then efficiently going after that list of potential partners.

From what LSN has seen in the last six years, companies develop their technology assets or get their tech transfer licenses and then decide to put their collective “toes in the partnering waters,” unprepared –without the knowledge of what it takes to play in the global marketplace. The earliest stage companies are seeking funds from friends, family, government grants, seed funds and angel investors but lack experience to execute. When these startups launch, there is a mixed bag of guidance for the scientist/entrepreneurs and fundraising CEOs. Many retired life science business executives and ex-professors go into business consulting, and all are well intentioned, but they too face the challenge of trying to keep up and in context with the fast-moving earliest and early global fundraising and partnering arena. Indeed, all levels of partnering have gone through dramatic change in the last 5 years. Virtually all the players in the life science arena today are going earlier and earlier when it comes to sourcing assets for their pipelines and portfolios.

Most of the firms LSN meets with and observes have a solid enough start on developing their branding and messaging materials but few are ready for prime time. Most firms need to ratchet up their branding and massaging across the board.  Typically, the companies LSN sees need to rethink some of their basic assumptions and rationales and focus on netting out their distinct value proposition. It is LSN’s belief that most of the companies have issues with their branding and messaging and are 60% to 75% ready to be in front of potential partners.  Virtually all need help and can greatly improve with just a little more focused work around the company’s theme and what they are trying to accomplish. A common issue with the presentations is the lack of a cogent story describing their company and what they do. The issues boil down to a lack of framing the company and product in the right light with enough detail that adequately positions their company to potential partners. This can be solved by creating an accurate picture of what the company is, what it does, as well as all of the other points that should be included in the pitch deck. In essence, not all of the information a potential partner seeks from a pitch deck is clearly addressed, which leads to lost opportunities.

Many of the companies do not have a 5-7 word tagline that adequately describes the company, thus failing to capture the essence of what the company actually does. LSN spends a lot of time working with the companies to net out their taglines and elevator pitch. In addition, we found that most of these companies financing needs are not budgeted far enough ahead, and as a result are seeking too little and thus will be in a never-ending fundraising process. The trap for these startups is failing to fully understand how long and time consuming a fundraising process can be which is 9-18 months. Investors like to see a company raise enough to reach their next major value inflection point, and would rather put more into a round to achieve this end and increase their return on investment. There is also a benefit to getting larger players in the game early, as they can be valuable partners in later development stages, so even though the companies are small, they should think BIG and long term.

A key skill that these companies need to develop is the ability to describe their technology and its value simply and clearly. While many life science investors have strong scientific knowledge, not all do and it is imperative to make sure even those without a technical background understand the product and its importance to the market. This should be a simple but compelling message. This message should also be succinct, as a pitch needs to encompass a lot more than just the technology and the need it addresses. Companies need to be sure they also discuss the team, the path to market entry, the marketing approach and how they plan to achieve this. It is important to note that investors do not expect an early stage company to have all of the answers or for these answers to be set in stone, but they like to see that the company has thought of these issues and how to address them.

Companies must decide how they wish to present their opportunity and devise a method for telling their story that works for them. This pitch must also be developed such that any employee can easily share it. In a small company, any employee may make the connection that leads to an investment, so creating a clear, concise message that anyone can share that includes a good hook to draw interest is critical. What all the companies were missing was a list of global partners and investors (GTL) and the skillset to canvass this list through ongoing phone and email campaigns. This is a big part of what the two-week MKT 466 Funding and Partnering Immersion class addresses.

In summary, with some time and effort, the message and the marketing material of most startup companies can be improved. Most companies have a great start, but a few weeks of LSN’s help can get the branding and messaging honed. Instead of focusing solely on regional partners, LSN can help the companies connect to a global network of investors and strategic partners, through the Investor Platform and the RESI conference series. Teaching them how to efficiently canvass and set up partnering meetings is crucial for success. Fundraising is fundamentally a numbers game so by expanding their target list to the global stage, they have a much better chance of finding partners that are a fit.