What Investors Look for in a Biotech Startup

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Biotech startups bring a unique set of value propositions and exit opportunities to the startup investor.

Here's what investors look for in a biotech startup:

Investors look first and foremost for a novel target to pursue.

These receive outsized funding rounds at the early stage.

Investors look for platform-based approaches rather than individual products.

The platform promises multiple products at a lower cost to develop.

Some investors look for a fast follower of a recently proven therapeutic.

This could be an alternate target with the same mechanism of action.

Given the amount of funding required to take it all the way to the market, most investors look to exit sooner in a clinical trial or upon FDA approval.

Investors look for exits in the 5 to 7-year window.

They look at how much additional funding will be required to reach the exit.

They avoid substantial follow-on raises as it causes dilution.

Finally, they look for an experienced team, both on the technical side and the business side.

The customer in the biotech industry is not the patient who uses the therapeutic, but rather the pharma company that buys the startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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How To Introduce Yourself to an Investor

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In engaging investors, startup founders should master the self-introduction.

It's important to make a good first impression.

While some introductions come from others, most often the founder will be introducing themselves.

Here are some key points in introducing yourself to an investor:

Begin with gratitude for their time.

Avoid the entitled attitude, as most founders are not entitled to anything from the investor.

Introduce your name, company, and what your company does.

Use a five to seven-word tagline to describe your company.

Based on the person you are meeting, customize the next sentence to show how the startup is relevant to the investor.

For example, if they are a fit for your fund, indicate that your research shows that.

Avoid the long-winded explanation of what you do and instead engage the investor in the conversation.

The goal is to elicit what interests them the most and take the introduction in this direction.

Investors look for the following in founders to fund:

They have good communication skills.

They know how to prioritize the talking points, putting the most important at the beginning.

They know how to make their information relevant to the one they are speaking to.

They are not nervous or uptight.

They know how to build rapport with the investor.

Finally, they demonstrate confidence even though startups come with a great deal of uncertainty.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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The Best Pitch Wins the Lion's Share of the Funding

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The power law drives the startup investment return.

Only a small number of startups are going to have an outsized return.

The power law also applies to startup pitching.

The best pitch in a group wins the lion's share of the funding.

While investors may view each startup differently, the overall best pitch will typically capture the majority of the funding.

In pitching a group of investors, it's important to bring your best effort as you must first win out over other deals in the room.

The investor has only so much time for diligence and follow-up.

Most investors choose one or two deals to pursue, no matter how many pitches they hear.

Since the pitches came at the same time, investors compare each deal to the other.

It's not often the startup has the ability to choose who they pitch against.

To the extent possible, avoid pitching in a group of very strong startups, as investors will compare your deal to their deals.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.