Communicating for investment

Onyx Health are asking SMEs in the health and life sciences sector to #ThinkBig, as part of a campaign to help businesses flourish into global brands. 

You’ve got a great idea for a new business, but now you need to attract investment to make it happen. The biotechnology sector has never had so much attention, but we must be aware that biotech investing has challenges, not least of which is the longer time to return on investment when compared to other sectors and the hurdles we have to overcome to get to market. 

The big question is, how do you make sure that you are communicating your ideas effectively to potential investors? 

In collaboration with Bionow, Onyx Health led an expert panel of investors, entrepreneurs, and communicators to discuss what investors looking for, the key to successful fundraising and the importance of crafting a convincing narrative.  

Chaired by Louise Flintoft, Associate Director, Onyx Health, the panel included David Denny, Partner at Longwall Ventures, Adrian Howd, Biotech Investor, Sam Whitehouse, CEO, Lightox Ltd and Trevor Pill, Associate Director, Onyx Health. 

Due diligence pays 

Do your due diligence – What kind of investor you are approaching? How well do they know the sector? Have they invested in businesses like yours in the past? What level of funding are you pitching at and does this match the amount the investor is looking to invest? Are they a good fit for your business?  

Remember that these people will be helping to shape your business for the next 3-8 years. Fundamentally, you need to get on. 

COVID-19 has accelerated the uptake of digital communication, with face-to-face meetings a distant memory on both sides of the fence. Communicating digitally allows you to do your due diligence beforehand, as opposed to bumping into investors at a meeting – and vice versa. 

There are advantages and disadvantages to communicating digitally 

“You can still get your personality across” 

From Zoom team meetings to video site visits, deals are still being made during the coronavirus pandemic as ‘going digital’ has made everyone’s jobs more efficient and less expensive. For example, if you can avoid getting on an 8-hour plane flight, how much money and time (and jetlag) do you save?  

You might want to start by thinking about your brand and how you communicate the vision and passion of your team. A slide presentation doesn’t need to be static, there are many vehicles to get your point across. Mediums such as videos and diagrams can capture the personality of your people and your company, allowing conversations to move to the next phase more quickly.    

Investors and entrepreneurs alike are suffering from Zoom-fatigue. Try not to deliver the same presentation again and again as it’s hard to prevent your delivery becoming stale. Try to mix it up, can you deliver your message in a different order? Try to start with your solution first… 

However, for many, face-to-face meetings remain important, with a majority of investors not willing to invest in a company without meeting the team directly. The deals that are currently closing are conversations which started before the pandemic. Therefore, it is doubtful digital platforms will completely replace face-to-face networking. 

Keep your pitch simple  

 “Get your foot in the door, don’t shoot yourself in the foot” 

The panel highlighted the importance of understanding the objective of the pitch, which is often not to secure your funding there and then (like an episode of Dragons Den) but to get a follow-up meeting. Keep your investor pitch as simple as possible by focusing on the “big questions” and leave investors hungry for more information by saying the bare minimum. 

Be mindful of your content, a 10-15 slide limit should avoid death by PowerPoint. Storytelling is an important aspect of this, which involves taking your investors on a journey in a way that makes them want to be part of it.  

While investors will love to hear about the science, too much and you lose your key messages. A good exercise is to distil your pitch from 45 minutes to 15 minutes, then down to 3 minutes, half that again and finally to sum up your business in a 15-second elevator pitch. Remember, this is an investor pitch, not a lab meeting 

Moving from the pitch to a meeting, the panel stressed the importance of striking up a dialogue, with listening being just as important (if not more) than talking at the investor. Secondly, demonstrate the ambition you want to achieve for your business, don’t hide behind forecasts and spreadsheets, which investors acknowledge are hard to predict, especially pre-sales.   

Pitching to investors involves a series of steps and it shouldn’t be forgotten it is a two-way transaction.  

What are investors looking for? 

“It is much better to have in-perfect action than perfect in-action” 

Focus and clarity of purpose – be concise and clear. Clarity and brevity go hand-in-hand, so avoid muddling through your investor pitch. 

Sometimes it just isn’t quite right – this shouldn’t be taken personally. Even if you have a fantastic business; if it isn’t a good fit for that investor and their portfolio, they simply won’t invest. 

Differentiation and scalability – you need to offer something unique and clearly show how you will grow with capital.  

Your positioning – You must articulate what your company’s product or service consists of and why it is unique. Images, visuals, and videos play an important role here – don’t just give lengthy written explanations. 

A business that understands the full journey – What problems inspired you to create your business in the first place? What successes have you had since then? Most importantly, where are you headed now? 

The relationship of the team – Many investors believe that a company’s team is the most important factor dictating investment – and they will be looking out for any issues of contention among the team who are presenting. 

Individual vs. group presentations 

 “I agree and disagree with all of it”

The panel was split in regard to the benefits of individual versus group presentation. Solo presentations often present less of a risk, and time commitment. However, there was a consensus that lots of people is not advantageous – 2 or 3 at most. This is a case of less is more. Think carefully about who is pitching and what they’ll contribute. For a first meeting, don’t overdo it — the chief executive and the chief technology officer (who understands the science) is optimal.  

As mentioned previously, investment often involves a series of steps and new people can be introduced over time.  

How important is previous business or sector experience?

“You need to allow people to make mistakes”

While it is important to show investors relevant, previous experience to build the credibility of your team (or board), a lack of any previous business or sector experience does not automatically rule you out.  

More important, is experience in the right places. Investors are keen to foster opportunity and avoid a stagnant community of people with the same skillset, coming forward with the same sort of businesses.   

If you wish to listen to the webinar in full, click here. 

For further support contact the team at Onyx Health, via enquiries@onyxhealth.com, call 0191 640 3638 or visit our website www.onyxhealth.com