key elements for a successful inception and seed...
TRANSCRIPT
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Healthcare Business Summit
Porto, Portugal
17. October 2019
„Key Elements for a successful inception
and seed milestones –
what investors like to see“
Dr. Christian Schneider
Vesalius Biocapital
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Disclaimer
„This presentation and the following represent my personal
opinions and views and do not represent an official statement
or the opinions and views of Vesalius Biocapital“
Dr. Christian Schneider
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Topics
• Intro Vesalius
• How to create value in the seed phase
• Role of an investor
• Dos and Don’ts & No-Gos
• Q & A
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Intro Vesalius
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Intro: Vesalius’ funds
• European life sciences venture capital investor, together with
legacy funds managing EUR 280m.
• Experienced Managing Partners, combining more than 90 years of
relevant experience.
• Vesalius Biocapital III targets European later-stage venture
companies in drug development, medical devices & diagnostics
and digital health.
• Fund size EUR 120m.
• Five investments made (of 10 or 11).
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Balanced VBC III team
with a successful joint track record
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Deal Flow VBC III
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All nice, but:
We need to create value!
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Negative example: WeWork WTF*
• USD 47B last post-money
• IPO S-1 filing
• Expected IPO at USD 60-90B
• Then USD 20-30B
• Then USD 15B
• IPO filing withdrawn
• CEO fired
• Bankruptcy discussions
All that in 6 weeks
Softbank internal rounds
from USD 17B to 47B
External valuation
*from the blogs of Scott Galloway, professor of marketing at NYU Stern School of Business
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So, which ingredients do you need
to really create value in the early
stages?
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• A brilliant idea to solve a problem
Ingredients
By no means: a solution
looking for a problem!
Start with the problem, then
look for the best solution.
Example:
A medtech company started by doctors
is often better off than one started by engineers.
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• A brilliant idea to solve a problem
• People (team)
Ingredients
Diversity!
Education, background,
experience, gender,… Grey hair!
Network!
Former success!
Advise:
As a founder: align, bind, and incentivize them,
i.e. give them shares (with vesting scheme, etc.)
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
Ingredients
Focus on and show the
IP which is relevant for
the intended products
Draft a patent strategy:
Target, MoA, compound
class, compound,
production, formulation,
administration, etc.
Clarify ownership,
licenses, purchase
options, defense, etc.
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
• Business plan
Ingredients
No traditional BPs anymore.
… of non-confidential
nature and content, in
English!2-page teaser: summary in text form
PowerPoint of
25 slides + back-up = BP & pitch
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
• Business plan
Ingredients
Key question:
“Who is going to sell what to whom, when, why, where, and for how much?”
Answer needs to be EXACT and in DETAIL !!!
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Business plan: Helpful questions
…. from the
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Businessplan: Helpful questions
Part 2:
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
• Business plan
• Investors & advisors
Ingredients
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
• Business plan
• Investors
• Milestones?
Ingredients
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• A brilliant idea to solve a problem
• People (team, advisors)
• Patents
• Business plan
• Investors
• Milestones!
Ingredients
These are your milestones!
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Role of an investor
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• Financial supporter => co-owner!
• Active supervisory board member
• Corporate development driver
• Corporate governance watcher
• Milestone setter
• Industry expert
• Door opener to relevant network
• Sparring partner / sounding board
Role of an investor
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Dos & Don’ts / No-Gos
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Have the following numbers readily available when
speaking to investors:
• Total money invested (grants & equity, no sweat equity)
• Last post-money valuation
• New pre-money valuation sought and reasoning
Dos and Don’ts / No-Gos
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Team composition:
• Assemble & show a complete team
• Show gaps and how you want to fill them (names!)
• Academic founders: be clear who is joining and who is
going to stay in academia
• Be open to suggestions for modifications / re-
enforcements / replacements
Dos and Don’ts / No-Gos
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Attitude of inventors / start-up founders towards competition:
“Our invention revolutionizes and disrupts the whole industry! It leaves
the competition in the dust!”
Unspoken attitude:
“There will be no further improvement ever after. There won’t be ever
any danger to our business!”
Dos and Don’ts / No-Gos
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Attitude of inventors / start-up founders towards competition:
“Our invention revolutionizes and disrupts the whole industry! It leaves
the competition in the dust!”
Unspoken attitude:
“There will be no further improvement ever after. There won’t be ever
any danger to our business!”
REALLY ? Think twice! Didn’t the inventors of the
current state of the art product think the same?
Dos and Don’ts / No-Gos
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Never, ever use the word “conservative” as in
• … time line => We will double it
• … budget => We will double it
• … exit expectation => We will half it
Dos and Don’ts / No-Gos
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Better explain how you got to your
• … time line
• … budget
• … exit expectation
“We obtained quotes from experts and CROs for today’s time lines and
costs. Since there is inflation and time overruns, we added 25% to
those quotes.”
Dos and Don’ts / No-Gos
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Syndication
• In todays buyers’ market don’t try to out-maneuver
investors => you will lose them!
• Europe – low valuations, US – high valuations => move,
if you can!
Dos and Don’ts / No-Gos
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We didn’t talk about money?
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“The money will come by itself !”
- If you do the right things!
THE END
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Q & A