venturefest bristol 2011, john clarkson,
TRANSCRIPT
Seed Series A Interim Series B
Funds £1 m £2 m £0.5 m £18.5 m
Date 2005 2007 2009 2011
Milestones Product
concept
Prototype
development
Clinical validation Transfer to
manufacture,
Product launch and
menu expansion
Seed ◦ University of Bath, YFM, private investors (SWAIN)
Series A ◦ YFM, Braveheart, private investors
Interim ◦ YFM, private investors
Series B ◦ Novartis Venture Funds, J&J Development Corp, LSP,
BB Biotech, Consort Medical plc, private investors
Seed ◦ Ordinary (EIS qualifying)
Series A ◦ Investor (EIS Qualifying plus exit pref) & Pref
Interim ◦ Investor & Pref
Series B ◦ Investor and Series B Pref
Most rapidly growing segment of the diagnostics market
Experienced management team and board ◦ Diagnostics industry experience: J&J, Siemens, Osmetech, Axis Shield
◦ Successful delivery of similar projects: product launch, licensing, trade sale
Major problems being addressed ◦ slow speed of diagnosis; falling GP revenues
Significant product benefits, well protected IP
Convincing and demonstrable milestones completed – external clinical validation at JHU
£1.6m TSB grant for core product development
Raising £2m for end 2010
Approached European and US VCs during Q1 & Q2 2010 ◦ European: interest. Good contacts through IN3 Europe. Funding
insufficient to take the company to product launch in US – raise more
◦ US: no interest: too little money, too far away
Approached European and US VCs during Q1 & Q2 2010 ◦ European: interest. Good contacts through IN3 Europe. Funding
insufficient to take the company to product launch in US – raise more
◦ US: no interest: too little money, too far away
Approached diagnostic/medical companies: OCD (J&J), Novartis Vaccines & Diagnostics and approached by Consort Medical from July 2010 ◦ Interested, particularly Consort Medical
Approached European and US VCs during Q1 & Q2 2010 ◦ European: interest. Good contacts through IN3 Europe. Funding
insufficient to take the company to product launch in US – raise more
◦ US: no interest: too little money, too far away
Approached diagnostic/medical companies: OCD (J&J), Novartis Vaccines & Diagnostics and approached by Consort Medical from July 2010 ◦ Interested, particularly Consort Medical
Contacted by Novartis Venture Funds (NVF) and J&J DC in August/September 2010
Approached European and US VCs during Q1 & Q2 2010 ◦ European: interest. Good contacts through IN3 Europe. Funding
insufficient to take the company to product launch in US – raise more
◦ US: no interest: too little money, too far away
Approached diagnostic/medical companies: OCD (J&J), Novartis Vaccines & Diagnostics and approached by Consort Medical from July 2010 ◦ Interested, particularly Consort Medical
Contacted by Novartis Venture Funds (NVF) and J&J DC in August/September 2010
Term sheet with NVF in December 2011; Used JP Morgan meeting to build syndicate. J&J DC joined Feb 2011; completed July 2011
Changed business plan: more dilution ◦ £18.5m vs. £2m – bigger, better and more realistic plan.
Less financial risk, exceptionally strong syndicate = better exit
Changed business plan: more dilution ◦ £18.5m vs. £2m – bigger, better and more realistic plan.
Less financial risk, exceptionally strong syndicate = better exit
Series B prefs dominate ◦ Negotiated better terms for Ordinary shares
Changed business plan: more dilution ◦ £18.5m vs. £2m – bigger, better and more realistic plan.
Less financial risk, exceptionally strong syndicate = better exit
Series B prefs dominate ◦ Negotiated better terms for Ordinary shares
One early investors wanted to exit ◦ Negotiated share sale to series B investors
Network ◦ Cold call will never work, but investor conferences might;
better to be introduced by a trusted intermediate
Power point
Business plan: short and sweet. ◦ Management, market, product, finance
Get a meeting
Make the investors comfortable with the team
Find a contact you can contact ◦ Someone who will feel guilty if they don’t respond
Persist ◦ And find someone you can complain to