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Business Development

March 8, 2022
2

A guide to successfully engage VCs

By | Business Development, Communication | No Comments

Venture capitalists (VCs) invested $36 billion in biopharma companies in 2021, helping these companies survive and grow past the cash draining development phases. Are you out there looking to get a piece of the 2022 funding cake? We’re here to help! Our team with extensive experience of fundraising shares our best advice for successful interactions with VCs – and it might make or break your deal. This guide takes you from preparations to selections of the right VCs and all the way to taking the next step with an investor on the hook.

Firstly, use your time wisely – don’t spread your efforts too thin

Entertaining a VC can be time-consuming. If they find your company interesting, you’ll find many questions coming your way which will require a lot of work to prepare materials and responses. Do be aware that a VC will lose interest if your responses aren’t timely and complete. Unprofessional behavior might also be a deterrent. A sensible approach for startups is to limit the number of VCs engaged at the same time. You need to have time to woo the investor.

But there’s more to consider; fundraising follows a rather straight forward process with each interaction having a specific predetermined objective to meet. If met, you’re on to the next step in the process. If the VC declines further discussions, the experience is still worthwhile as learnings can be used with the next VC as they’ll follow the same process.

As a startup, you’re under constant pressure to secure funding but it’s important to have realistic expectations that can be relayed to overzealous investors. A good measurement in fundraising is that it often takes 6-12 months or longer.

All VCs are not the same, find the ones with an appetite for your business

Every VC firm has a sweet spot determined by the type of companies or technologies they invest in such as development phase, initial investment size, total commitment needed and level of engagement in the company (e.g., taking a Board seat, operational work). As a company looking for funding, you should aim to be within that sweet spot, and if you’re not – don’t waste your time. Instead, turn your attention to a VC that is a better fit with the stage you’re in and your needs.

You can usually find relevant information on the VC’s web page, but also look at the deals they have made in the past to understand their preferences. It really is paramount to know what the VC is looking for right now and within the next 12 months.

Extra tip: If you’re a public company, you should investigate if the VC invests in public companies at all.

Before you contact VCs you’ve identified, you should have a clear understanding of the type of commitment you want. Questions such as long-term needs and help needed from the investor (e.g., contacts, expertise) should be cleared up beforehand. The investor will probably ask you what you expect of them early in the process and expect you to have a clear vision. An answer that only revolves around money will lead an investor that usually takes an active role in companies to think that you won’t use their resources optimally. Finding synergies with one of the investor’s existing portfolio companies is also a good way to show that you’ve done your homework.

Speaking to the right person increases your chances of success

Once you’ve identified the VC firms of interest, it’s time to make contact; but your research shouldn’t end here. The easiest is to find a common contact to introduce you to the investor, which most likely will result in that the investor will review your slide deck and provide honest feedback.

If you can’t find a common contact, your next step should be to try to find which person will give you the better odds to score a meeting. Study which areas each investment manager specializes in, what they usually talk about in different contexts (e.g., LinkedIn, summits) and where their investment focus lies. Another aspect that might be equally important is timing. If an investor is new to the firm, they’re probably very focused on building their portfolio. This means that they’re probably taking more meetings than other investors at the firm. If you’re lucky, the newly onboarded employee is also specialized in your area.

VCs love warm introductions. Try to find a common contact in their network. Do you perhaps know the founder or Board member of a company they’ve invested in previously?

Gaining trust and making a lasting first impression – skip the NDA

Once the investor has agreed to take a meeting, you need to make the right first impression. Remember that the investor is contemplating getting into a long-term engagement with you, your team and, your company. It’s important to understand that your job as an entrepreneur is to make your contact person at the VC firm feel comfortable to introduce your company to his colleagues. Make sure to show them that you are trustworthy and easy in collaborations by being honest and straightforward in your communication. At this stage, it’s not about drowning the investor in information but to instead keep the momentum and interest in the company.

Do note that investors may very well reject investment opportunities because they feel the entrepreneur is being evasive when answering questions or that they’re hiding something.

Prior to the first meeting, you may feel the need to ask the VC to sign an NDA. Just be aware that most VCs won’t agree to this. From their perspective, signing an NDA is a liability risk that may hinder them from making the best decisions for their investment portfolio as a whole. VCs often meet companies working with similar business ideas and may have already invested in a company that is similar to yours. Therefore, signing an NDA before knowing anything about your technology or growth plans may impede their current business and ongoing discussions. Our recommendation is that you shouldn’t bring an NDA up because it will probably lead to losing that fundraising opportunity. You can, of course, avoid speaking about your technology’s most sensitive aspects until after the first meetings.

Time to pitch – keep it simple and be ready for questions!

The first time you sit down with the investor to pitch is precious time that any entrepreneur wants to maximize. However, this often results in an information-packed pitch that takes a long time to walk through. This is a classic mistake. Many investors will hijack your presentation and bombard you with questions. It might be because they are bored and want to have more of a dialogue, but most often it’s because they’re interested and want to know more – so see it as an opportunity to engage and show off the parts of your tech or business case that stirs their interest.

Our best advice is to have a short, direct presentation and to know your presentation well enough to be able to present it in a random order. And last but not least, be well aware that your reaction to questions and interruptions during the pitch can make or break your deal. Investors want to see a flexible and passionate entrepreneur, so do your best to accommodate the investor’s questions and start building a fruitful relationship right away.

Curious about what to bring up in your pitch deck? Check out our previous post on how to build the most attractive investor pitch deck here.

January 28, 2021
2

Who’s who in the vaccine market? A look at low- and middle-income countries

By | Business Development | No Comments

With Covid-19 becoming a big part of all our lives this past year, the vaccine market is more relevant than ever. But vaccine development is a completely different game compared with drug development; both in pathways and in players. Vaccines are one of the most cost effective and successful public health interventions, saving two to three million lives annually. In the following post, we share our experience of a few key facts bringing you up to speed on the basics of the vaccine market in low- and middle-income countries.

In 2018, the WHO estimated the global demand for vaccines to 3.5 billion annual doses excluding vaccines for oral polio vaccine, seasonal influenza vaccine, travel vaccine and military markets. This corresponds to a global market value of $26 billion. Sounds like a rather straight forward market with major needs, but it’s anything but simple due to a strong divide between high income countries and low- to middle-income countries. About 80% of global vaccine sales counted in value comes from high-income countries, primarily due to the preference of more expensive and complex vaccines. By volume sold, the high-income countries market corresponds to just about 20%. This unveils the important disparity that steers all key players on the vaccine market.

Game-setters: The buyers and regulators

You may be familiar with the pharma industry where the buyers of established drugs are hospitals and clinics, financial players, doctors or even patients themselves. In the vaccine market, it is instead large organizations such as UNICEF and PAHO that usually procure and distribute vaccines developed by a vaccine developer. It is the WHO, the national immunization technical advisory and regulatory authorities that have significant influence in determining the global vaccine demand by setting the agenda, immunization policies and programs, especially in low- and middle-income countries.

Regulatory and advisory bodies such as the US FDA, EMA and WHO have the important role of overseeing vaccine quality and safety. NGOs such as UNICEF and PAHO (Pan American Health Organization) function as pooled procurement organizations and are highly involved in a centralized vaccine procurement process. UNICEF procure vaccines for approximately 100 countries and PAHO procures for about 40 countries. Governments and private sector actors are involved to a varying extent as well. As an actor looking to sell vaccines, you should be aware that an estimated 5 to 10% of the total vaccine sales in developing countries are through the private sector. Thus, the private sector is very small in developing countries in general, however, some countries with rapid economic growth have a demand for new vaccines, as well as vaccines that are not included in the WHO standard vaccination program. These new and extended vaccines (the HPV vaccine being one example) would primarily be bought through the private sector.

A as a vaccine developer, you need to keep in mind that low- and middle-income countries together with their donors have a major influence on these discussions since 80% of the vaccine volume is purchased by these countries.

The producers

International quality standards are set by the WHO and all vaccine producers need to comply with these standards, which only a few does. As a consequence, about 80% of the global vaccine sales come from five Big Pharma companies. These Big Pharma tend to focus their in-house production on avcanced multivalent vaccines high income countries. For low- and middle-income they often go for a strategy where they do a technology transfer to local players for production and sales, since the products differ both in content (lower valencies) and in packaging. Thus, producers focused on low- and middle-income countries have a significant role in production of monovalent and certain combination vaccines and in terms of volume of doses, they supply roughly 50% of UNICEFs procured doses. Through this, the vaccine market landscape in low- and middle-income countries have changed by increased competition and increased supplier capabilities resulting in reduced vaccine prices; benefitting people across the globe.

The donors 

Donors are an essential part of the vaccine market for low- and middle-income countries as they make it possible for large organizations to run their agenda. Large donors include organizations like the Bill & Melinda Gates Foundation, but also many high income countries.

Implications for vaccine developers

High-income countries have different demands of vaccines compared with low- and middle-income countries countries in terms of desired formulations, in terms of valency and vaccine type, as well as packaging. This gives the vaccine producers a chance to change pricing for the different products and to avoid unprofitable parallel trade between countries. However, since this might increase the frequency of technology transfer to producers that target low- and middle-income countries as mentioned above, the price may decrease due to the increased manufacturing capabilities this offers. As a vaccine developer, it is essential to know who you’re targeting and make adjustments in manufacturing accordingly.

As mentioned above, high income countries have historically purchased more complex and expansive vaccines, e.g. with higher valencies and vaccines that are not included in the standard vaccination program. However, newer vaccines such as the rotavirus, pneumococcal and HPV vaccines that are being implemented with the help of donors, are being implemented at approximately the same pace. This is a game-changer for vaccine developers, since some advanced vaccines can be assumed to be implemented in a higher pace than generally assumed in previous years.

Since the vaccine market consists of few players (especially producers), there is a need for continuous discussions and balancing of demand and supply between different actors. And as a vaccine developer, you need to keep in mind that low- and middle-income countries together with their donors have a major influence on these discussions since 80% of the vaccine volume is purchased by these countries.

To keep up with the ever-changing dynamic of the vaccine market, our best advice is to:

  • Work with vaccine experts that are knowledgeable in the vaccine field specifically.
  • Read up on WHO guidelines and follow their developments because they set the international quality standards.
  • Follow the interests of important donor organizations such as PATH, GAVI, UNICEF since they steer and influence the market and supply to a large extent.