Greg Raiz, Managing Director, TechStars
James Biggins, Founder & CEO, Access Vascular, Inc.
Cindy Li, Director Corporate Development & Strategy, Cardinal Health
Thom Busby, Vice President, Outcome Capital
The Financing Lifecycle: What Healthcare Entrepreneurs Should Know
We’ve summarized below key questions from our panel discussion, as well as where you can listen to the responses in the YouTube video.
Gregory Raiz, Managing Director, Techstars
Greg’s background is as a CEO and Founder and he started his business in the Boston area, focused on building technologies that improve people’s lives. He thought about how to take things that are complex and make them simple, and he did that through the user experience and design of mobile applications. Currently, he runs Techstars Boston, an early-stage accelerator, which helps early-stage companies propel their business forward. They invest in 24 companies a year, up to $120k per company and saving lives is one of the core missions of Techstars Boston.
Cindy Li, Director Corporate Development, Cardinal Health
Cindi Li’s background is in investment banking, and she started her career with Morgan Stanley doing work with later stage companies as they were going through capital raise or M&A activities. She joined Cardinal Health 5 years ago, which is a pharmaceutical distributor and manufacturer of medical products. Her team is in corporate development and responsible for M&A activities and minority investments. They work with businesses to find areas that are strategically important to Cardinal Health, where they want to focus on innovations, and they are looking at partners they can work with in commercial partnerships or minority investments to drive forward those goals.
James Biggins, Founder & CEO, Access Vascular
Jim Biggins is President and CEO of Vascular Access, a commercial stage company in the Boston area that is focused on solving the largest unmet needs in their market by incorporating their proprietary biomaterials into the products they create to reduce thrombosis.
Thomas Busby, VP, Healthcare & Life Science Investment Banking, Outcome Capital
Summary of the video:
Q: The beginning of the startup financing lifecycle often includes incubators and accelerators. What do these early investors offer entrepreneurs? What is the difference between the two? When should an entrepreneur start to talk with an incubator? Go to minute 4:58 in video
Q: If I‘ve raised a bit of seed funding from say, high net worth individuals, am I precluded from going to an accelerator or incubator? Go to minute 7:39 in video
Q: Looking at the other end of the financing cycle, when you’re working with later stage financing and transactions, can you share where strategics play a role in those corporate financings? Some strategics have corporate venture capital arms for entrepreneurs to talk with. When should entrepreneurs start to talk with strategics? Go to minute 9:07 in video
Q: As we consider corporate VC arms, are they all created equal? Do they operate as a typical institutional VC? Go to minute 12:48 in video
Q: What is difference between minority investor and a majority investor? Go to minute 14:10 in video
Q: Greg, you had a very active year last year – you made 27 startup investments last year. Could you talk about one or two of those investments and what drove you to invest, focusing on the healthtech portfolio side? Go to minute 15:37 in video
Q: Jim, do you want to take a minute and talk about your financing strategy with Access Vascular? Go to minute 19:37 in video
Q: Jim was saying that he was looking for the right investor, not just someone that would invest, but someone who had the right expertise and knowledge of the space, market, and technology. For the two of you, what benefit does that provide for the entrepreneur, to get the right investor to the cap table? Go to minute 22:02 in video
Q: When a strategic is contemplating acquiring a company, how can investors get in the way sometimes? Go to minute 25:01 in video
Q: In terms of raising the right amount of capital and knowing that the round is going to bring you to a real inflection point in terms of your value, Jim, how did you land on $20 Million for Series B? Go to minute 26:11 in video
Q: Does it make sense in terms of building credentials and validation of ideas to get federal or government funding and grants before approaching investors? Go to minute 29:36 in video
Q: How does an entrepreneur go about defining or determining milestones or inflection points to the amounts of the investment raised? What are the metrics? Go to minute 33:00 in video
Q: What should you include in the initial pitch? What should be in the CEO’s mind in that pitch? Are there key slides in the deck that a management team needs to make sure that they include and talk about? Go to minute 35:37 in video
Q: That initial meeting – how long does that normally last? Is it in person? Or virtual? What does that experience feel like? Go to minute 38:36 in video
Q: Cindy – on the other side of the table, have you had any presentations or pitches that have raised red flags that say this isn’t right for Cardinal? What are those red flags? Go to minute 42:02 in video
Q: Jim – I’m curious about your direct experience on raising capital, in terms of timeline, how long is that process? How many meetings? How much time and effort? Go to minute 43:35 in video
Q: Is that a competitive process? Are you talking to a lot of VCs at one time? Or do you home into a few quickly? Go to minute 44:42 in video
Q: Cindy – on your end, when thinking about timeline, when a company is looking at the end of their financing lifecycle and for an exit and to be acquired, how long is that timeline and when should a medtech exec be thinking about that exit? Go to minute 45:55 in video
Q: What is the difference between venture capital and private equity, and when and how do you speak to those two groups, especially in medtech? Go to minute 47:50 in video
Q: What about the management team – what should it look like? What type of talent do you need? Who do you need in your network to be successful? Go to minute 48:47 in video
Q: How would you work with a founder that has launched a product, has a little bit of growth in a few select hospitals, but is hitting a plateau, a growth barrier. Should they think about going to an incubator or accelerator, try to raise venture? Try to talk to corporate? How do you solve that hurdle? Go to minute 51:00 in video
Q: What should be included in the executive summary and what should be omitted? Go to minute 53:28 in video
Q: What is a bridge round to an entrepreneur? When is it necessary? Should it be avoided? Go to minute 54:57 in video
Q: In each of your experiences, what ‘s one thing that you’ve learned in financing companies that most people wouldn’t be aware of? Is there any one tip? Go to minute 56:31 in video