1 Overview (Snapshot)
Ideally, this is the only slide the investor needs to see to ‘get’ the business opportunity, and prime the investor to check out the rest of the story. The first bullet should make crystal clear what the company does: e.g., “Next generation catheter-based devices for endovascular and neurosurgical interventions”; “Focus on novel anti-proliferative drugs that modulate a key new target in the VEGF pathway for cancer and ocular diseases.” Other bullets should summarize applicable key selling points, such as immense size of the target market; advanced stage of development; compelling data in comparison to the competition; regulatory milestones attained; the capitally efficient value step up deliverables with proceeds of the financing; facilities/employees; etc. The Snapshot slide has to ‘prime’ the investor with a clear rationale for why (s)he should pay attention, and even invest.
2 The Problem
These slides, describing The Problem [that the invention solves], Current Approaches [on the market and in development, and Their Limitations] and The Solution [how the invention solves The Problem better, more safely, cheaper, faster, etc.] must make a clear case for the business opportunity
EXAMPLE: There are 5 million blood clots annually in the U.S.; patients are exposed to risks of amputation, stroke, pulmonary embolism, heart attack, and even death (cf. NBC reporter David Bloom, tennis star Serena Williams); clots occur in various vasculatures, with such and such a distribution.
3 Current Approaches (Competitive Analysis) and Their Limitations
EXAMPLE: The 2 main approaches are clot-busting drugs, or thrombolytics (but they have difficulty with hard clots, which constitute about 30-40% of clots, increase the risk of bleeding and stroke, and can take hours to days), and clot removal devices, that perform procedures called thrombectomy (but industry leaders use high energy aspiration, have difficulty with hard clots, are typically adjunctive to thrombolytics (with their risks), cause blood loss of e.g. 1 liter per procedure, can cause trauma to red blood cells and blood vessel walls, and can take ½ hour to hours).
4 The Solution (and why it is better, safer, cheaper, etc.)
EXAMPLE: The invention, a novel, low impact mechanical thrombectory system ‘cocoons’ and removes clots using standard endovascular techniques, is better (removes both hard and soft clots), safer (eliminates high energy aspiration, with its attendant blood loss and trauma, and eliminates or reduces thrombolytics, with their increased risks of bleeding and stroke), and faster (typically restoring patency in 5-10 minutes, in contrast to ½ hour to hours.
5 Best Data to back up claims of meaningful differentiation (clinical if available, otherwise pre-clinical)
These data should directly support the preceding claims that The Solution is better than Current Approaches in addressing the Problem.
6 Clear Clinical and Regulatory Development Strategy
Identify applicable clinical and regulatory milestones, precedents, benchmarks and strategies, suggesting a faster, cheaper, easier, less risky path to approval than the norm.
7 Commercial Assessment
The Problem identified the broad market(s) (e.g., blood clots, Alzheimer’s, hyperlipidemia). Help the investors understand why the invention can specifically address the market or segments of the market (e.g., deep vein thrombosis and stroke; the market currently defined by the industry leaders that the invention will take a part of/steal entirely, plus increments due to the invention’s offered Solution). Hopefully, these will total 9-10 figure markets (hundreds of millions to billions of dollars in revenues per year) in addressable patients, after taking reasonably modeled penetration into account. Point out pluses, if applicable, such as: potential for substantial savings to hospitals or insurers; no or minimal change required in medical practice; low sales and marketing costs targeting customers on the basis of the 80-20 rule; etc.
8 Follow On Pipeline/Platform
Investors prefer to invest in a lead program (with intriguing data and a clear path to clinic, preferably within 2-3 years, the closer the better) and a platform that generated that lead program and is generating a pipeline of follow on product candidates. Typically, investors don’t like single product programs, unless it is relatively advanced, e.g., in clinical investigation. On the other hand, platforms alone are somewhat out of favor, unless they seem particularly enabling (e.g., first mover consolidation of portals to new classes of therapeutics based on RNAi or epigenetics). Preferable is the combination of a lead program with a platform (e.g., a proprietary, drugable small molecule lead compound with competitive data in a generally accepted animal model, generated by a clever platform that accesses heretofore intractable GPCRs or transcription factors).
9 Intellectual Property
IP is on every investor’s checklist. In an introductory deck, it’s typically enough to enable the investor to ‘check the box’ that the invention appears proprietary, and that there are reasonable grounds to expect freedom to operate. This point will in any case need to pass due diligence; if there are substantive IP issues (e.g., questions about pre-filing publication that might constitute prior art, or inventorship disputes, or co-ownership of certain critical IP in other institutions that have not been sewn up yet), sort them out before going through the bother of talking to potential investors. However, if the invention is covered by strong IP, it can be an opportunity to differentiate. Be clear (if applicable) that there is composition of matter coverage relating to the lead compound and key follow-on compounds, and/or method of use coverage, particularly if broad (e.g., ‘modulators of target W for cancers’, which implies that the IP estate, once issued, could exclude others from commercializing drugs for cancers that target W).
Investors invest in the project and the people. The preferred people are serial entrepreneurs who can point to prior successful exits. That doesn’t mean an entrepreneurial academic who wants to start his/her own company can’t do it…but it is harder to do now than in earlier generations of life science companies, in the last decades of the 20th century. Generally, the more complete of an experienced team (including an experienced CEO), the better chances for funding. However, an academic who has a track record of founding companies that have been hits, or legitimate contenders, will certainly get a hearing. Alternatively, if possible, position the project to be the culmination of years of solid research by credible investigators at reputable institutions, that ‘only now’ is available for funding, with a rich and deep data set.
11 Investment Offered (Funding History, Amount Sought, Terms Offered, Cap Table)
These Investment Offered, Use of Proceeds, Financials and Exit Strategies slides typically presuppose that an operating plan and financials have been prepared, and proffer pre- and post-money valuations and capital structures, usually in collaboration with an experienced CEO. In the absence of a CEO collaborator, the founder(s) will have to give careful consideration to the amount sought, which (depending on the deliverables contemplated by the plan over the next 2-3 years, in the case of an A round, or the next 6-18 months, in the event of a seed round) should include not just expenses of the academic lab to deliver the target milestones, but a list of regulatory, manufacturing and supply, process and quality, and other expenditures necessary to transition research to commercial development. For a start up that has had no prior funding, but with strong slides addressing the other elements of the slide deck, VCs (venture capitalists) will not need this slide to fashion a term sheet, but they will need to understand what the amount sought would ‘buy’ them, so they can make an assessment as to the ‘value step up’ that could be achieved within the time frame before the next financing round.
12 Use of Proceeds (target milestones over next 6-12 quarters)
The target milestones should be ‘value step up’ milestones such as ‘nominate a clinical candidate’ [that has been optimized from among various hits] or ‘file the IND application’ [after generation of necessary data with cGMP supply] or ‘complete Phase II Proof of Concept trial’.
Academic start ups typically don’t have a revenue line, and the income (loss) statement can form the de facto operating plan…but investors will need to know that the company knows what steps it will take, applying defined sums of money from the proceeds, to timely deliver the ‘value step up’ milestones. These last three slides 11-13 are not necessarily required from academic founders; if VCs like the story, they may recruit a management team to create the operating plan and financials…but the more flushed out a pitch is, the easier it can be for investors to envision the project as a success, whether tracking the plan presented, or as modified per their perspectives.
14 Exit Strategies and Illustrative Values
Investors fund in order to make money. Money is made typically only upon sale of the company in a M&A (Mergers and Acquisitions) transaction or sale of the shares representing the investment following an IPO (Initial Public Offering), although there can occasionally be other liquidity events. Help potential investors understand the extensive buyers’ pool for the company or its programs, and exit values for recent comparable companies and programs and applicable time frames.
This is not strictly necessary, but repetition of the ‘take home’ points can be valuable. Professional investors are pitched hundreds of projects a year. To have any chance at funding, you need to make an impact. This is an opportunity to shape the ‘take away’ or strengthen the ‘priming’ for follow up meetings.
EXAMPLE: Right Team. Right Time. Right Device.
- Founding team sold last company to BigCo. for $YM
- Fragmented and underpenetrated market poised to explode due to emerging Standard of Care
- Innovative, simple, low-impact device, already FDA-cleared, with potential to be better, safer, faster leader
- Value entry point in highly capitally efficient company (<$ZM investor cash to date) on cusp of commercialization