Going It Alone or Choosing a Fundraising partner
Every entrepreneur in the life science field who is seeking to raise capital must make a decision at some point about whether to do so using a fundraising partner. On the surface, the answer seems obvious—let an expert who has experience in such matters handle it, so others on the team can concentrate on their areas of expertise. However, the arena of early-stage fundraising partners is filled with a diverse cast of characters that constitute a “Wild West” of sorts. The purpose of this chapter is to provide you with some insight as to why a fundraising partner may or may not make sense for your company, and to examine the forms these fundraising partners take along with their respective advantages and disadvantages.
Global Target List – Match Your Firm with Investors That Are a Fit
Now that you have polished your branding and messaging, streamlined your website, and purchased your cloud infrastructure tools, you are almost ready to begin your fundraising campaign. You have a general sense of the current investor landscape, and know who you are, what you do, and where you sit in the food chain of the life sciences. Now you must map out the people and firms to whom you should be reaching out in order to successfully meet your next-round fundraising goal. To do this, you must identify every qualified investor for your company (who could serve both your current and future needs). LSN has mapped out the information you will require to successfully identify and qualify potential investors by generating a global target list (GTL).
Straight Talk About Finding, Vetting, and Closing Capital
In concluding this book, there are a few important things I want to say about raising capital in general. Keep in mind that whether you like it or not, you have entered the world of sales, and you are tasked with selling yourself, your team, your firm, and your product to an investor. As I have stated throughout this book, outbound direct fundraising is a numbers game. Some 200 to 300 investor targets will net you 40 to 60 potential compelling fits with whom you will interact and thus create a dialogue. As you go through the relationship-building and vetting process, that list will likely be whittled down to 8 to 12 active potential clients. You can expect to have five or so in the final mix, which may result in one or two allocations of capital.