Slone Partners Produces Healthcare Funding Trends and Tactics Event at Genentech Hall, Byers Auditorium at UC San Francisco for 70 Investors, Drug Discovery, Dx, and Tools Leaders
THURSDAY, FEBRUARY 22, 2018, SAN FRANCISCO – This evening, Slone Partners, North America’s leading healthcare industry executive search firm, organized a dynamic panel discussion – Build an Amazing Diagnostics, Tools or Drug Discovery Company with the Right Financial Partners – revealing deep insights into the challenging funding types, pathways and considerations healthcare startup and growth-stage healthcare firms must strategically navigate.
Over 70 healthcare industry investors, drug discovery, Dx and tools leaders were in attendance to receive a 2017 healthcare funding market snapshot report (sectors, markets, investments and exits) from Jonathan Norris, Managing Director of Healthcare Practice, Silicon Valley Bank, before observing a lively panel discussion on the 2018 healthcare funding outlook, processes, and considerations from the minds of esteemed panelists:
– Julia Moore, Portfolio Director, Breakout Ventures
– Kelly Gardner, PhD, Director of Marketing, Protein Simple
– John W. Rockwell, Partner, Foley & Lardner Private Equity & Venture Capital Practice
– Kyle Wilson, Partner, BroadOak Capital Partners
– Deval Lashkari, PhD, Senior Partner, Telegraph Hill Partners
– Jonathan Norris, Managing Director of Healthcare Practice, Silicon Valley Bank
– and moderator Bijan Salehizadeh, MD, Managing Director, NaviMed Capital
In the tradition of Slone Partners producing thought-provoking live programming in major North American healthcare hubs, the executive search firm collaborated with Mr. Norris and Dr. Salehizadeh to design a balanced discussion which informatively addressed the bilateral needs and perspectives of both investors and healthcare firms seeking financial partnerships.
In his 20-minute opening presentation addressing the 2017 healthcare funding market for life sciences, precision medicine, laboratory testing and diagnostics sectors, Jonathan Norris revealed important historical takeaways:
– 2017 was a great year and the expectation within the capital markets is positive for 2018
– Top dollar investments that closed in drug discovery were focused in the fields of oncology, platforms, neurology, and orphan/rare diseases; while diagnostics/tools funding was plentiful for diagnostic tests, diagnostic analytics, and R&D tools, with liquid biopsy being a standout
– Series A amounts have grown substantially and steadily in the last 5 years
– 2017 Initial Public Offerings (IPO’s) in healthcare and sciences have been at healthy levels
– Pre-money valuations in 2017 hit record high levels
– 2017 Biopharma IPO’s that exceeded $100 million were exponentially higher than 2016 levels
Immediately following was the panel fielded by six participant experts from the worlds of business banking, venture capital, marketing and law, moderated by Bijan Salehizadeh MD, who led an hour-long discussion of deep insights into healthcare funding, including:
– The importance of identifying the right niche investors with interest in pre-seed companies, pre-revenue companies, and EBITDA positive companies
– Understanding various paths to market, such as a larger capital raise before direct sales or lesser capital raise fortified by strategic partners or acquisition targets
– The gray areas and risks for scientific founders going with tranche-based investments*
– The timing for a startup company to hire a commercial or business development leader depends on the strength of the founder and his/her ability to speak business development and successfully serve as a brand evangelist representing the company in the market.
– During exits, a corporate partner is sometimes desirable and sometimes a liability, as the partnership could scare away suiters. It depends on the market and how crowded or competitive it is.
– The importance of assessing the market need and opportunities for early-stage healthcare companies
– Understanding the true viability of an IPO, or whether a company is an acquisition target, perhaps even pre-seed
– The staggeringly exciting role Artificial Intelligence (AI) brings to the future of drug discovery, diagnostics and tools companies, and the reaction of tech investors now suddenly excited for healthcare funding
– Discussed the possibility of creativity around future funding and whether there are possibilities of mimicking the Initial Coin Offering (ICO) approach, but financiers are leery of success**
– In terms of healthcare investment deal flow volumes, growth isn’t coming from number of deals but in the dollar size of the deals
– The ups and downs of big capital raises – at once exciting for companies, yet challenging for investors to realize their desired multiples on the sale
– Raising too much money can create real misalignment between company management, founders and the expectations of investors
– Technology investors and life sciences investors viewing and valuating businesses differently; life sciences investors being more conservative and conducting limited investments; whereas technology investors will sometimes enter deals easier and assume greater risk
ABOUT SLONE PARTNERS
Slone Partners delivers the leaders who build amazing healthcare organizations – People Are Our Science™. Since 2000, Slone Partners specializes in delivering world-class C-suite leadership, executive, and upper management talent to the most promising and established life sciences, research, diagnostics, precision medicine and laboratory testing services companies. With coast-to-coast presence in the most active healthcare industry hubs of Boston, San Francisco, Los Angeles, San Diego, Austin, Research Triangle Park NC, and Washington DC, Slone Partners uniquely and precisely provides an array of executive search and advisory services to exceptional clients. Our full suite of services includes identifying, negotiating with, onboarding talent, in addition to post-placement mentoring, success monitoring, and culture fit services. To learn more about Slone Partners’ value proposition and processes, visit www.slonepartners.com
* Tranche investment lets venture capital and other investors split investments into parts. They can give money to businesses over time instead of all at once. Usually, a business getting a tranche investment will get prenegotiated payments as long as it achieves financial milestones decided by the investor.
** An Initial Coin Offering, also commonly referred to as an ICO, is a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether. It’s somewhat similar to an Initial Public Offering ( IPO ) in which investors purchase shares of a company.
Edited on 7/2/2023