Two Essentials to a Successful Investor Pitch Deck
There is a natural tension between science and business, and the driving question becomes ‘how do you find leaders with business acumen and scientific expertise that will execute on their vision to achieve value for both patients and investors?’ Finding or building those qualified leaders isn’t easy but building business leadership is essential to a biopharma company’s success.
Communicating that science and business expertise into a message or pitch to investors is another obstacle, and quite often, biopharma companies miss out on investment opportunities because they don’t put themselves in the mindset of the investors. This mindset includes an understanding of the right balance of great science and an attractive business plan.
Matt Cardinal, head of the Strategy and Program Leadership practice area at Halloran Consulting Group, sat down with a group of esteemed panelists at a recent Biocom event and walked through their “Tales from the Trails: Stories of Fundraising,” where the panel dove into this tension and ways to work through the complexity.
Now we at Halloran want to take it a bit further and give you additional insight into preparing the right mix of business acumen and scientific expertise in your presentation to investors so that you can reach your next milestone. If you’re a small biotech presenting your pitch deck to investors for the first time, you only have seconds to grab their attention. And you don’t want to waste any of those seconds.
#1: Share Just Enough Science but Not Too Much
The most essential component in the biopharma industry is to understand how to take good science and data and turn it into a product or service that will benefit patients. It’s not enough to be a dedicated scientist – it is also crucial that you know how to turn that technology into economic success, and most importantly, how to concisely communicate the vision and scope of the business case. This requires believable, if not superb, storytelling of your company, its platform or product, and the market opportunity.
So, how much of your great science and data should go into a pitch that your aspiring organization will put in front of an investor? The guidance here is to focus on differentiation – what makes you special. Every single company (or at least those seeking funding) has experimental data showing their product works. A way to help you focus on your product’s differentiation from the competition is by going through the exercise of developing a Target Product Profile (TPP). The purpose of a TPP is to define the anticipated desired features of your product, it can also be referred to as the master plan for product development, particularly in the early stages. A TPP should at a bare minimum describe who the product is intended for, how is it intended to be used, how often should it be used, and most importantly, why is it to be used? Going through this exercise before presenting in front of investors will help you to develop a well-organized pitch describing your product’s value, unmet need, and benefits.
Biotechnology investors for early-stage companies see hundreds of these cases every year. Why should this audience care about your similar findings? You need just enough flavor of what makes you unique to generate trust and confidence in the investor before moving into how this uniqueness translates into a business case. A good example of this is data that demonstrates how your product or platform is better than the newest technologies brought to market or in development. Focus on those data points to support your differentiation thesis, versus summarizing all of your results (even if they are really good).
#2: Make it Obvious You Know Your Audience and What They’re Assessing
When potential investors peruse your presentation, they need to “get it” right away. “What is your hook?” and “why should the investor care?” should be the two key questions to consider answering from their perspective when developing your presentation. Make these two questions clear right away, so you don’t run the risk of being dismissed.
Now that you’ve provided enough data on the science, you’ll need to show that you’re thinking like an investor to keep their attention. To put it simply, describe how your organization can generate an investment return if they decide to participate in a funding round. Take the majority of your time in a pitch to describe the market opportunity, the competitive landscape, how you fit in, and how you will win. Understand who you are talking to, know exactly what value proposition you are presenting to them, and again, how you differentiate from other companies with a similar product or platform. A key point in this engagement is the presentation of exit and/or value inflection points, probability-adjusted asset and portfolio valuations, and financial resourcing needs for company growth.
Make sure to effectively communicate how much time and how much money is needed to build this idea and that the return on investment is worth it for the investor. It is a common error to include the upside value creation but to exclude the financial details of how that gets accomplished. All too often investors see too much information on the science, but minimal articulation of how that science can bring value to patients and investors – this is a critically important lens to view while putting together your presentation.
It’s also important to understand what your business plan looks like and how much money you’re asking for in the investment. Do not forget these key points as any potential investor will be looking for them; their cost and their risk is what they are most concerned about. Even more, do not forget to include who these investors will be investing in – your team is a critical component of the business case. Make sure you have a solid foundational team to describe to the investor so they trust their investment is in good hands.
Funding is an essential component in helping to grow your scientific ideas into reality. In order to receive funding from investors, biopharma companies need to have the right mix of science and business acumen when pitching their ideas. When pitching your idea remember to put yourself in the investor’s mindset and ask yourself “what does the investor care most about?” – don’t fall victim to a missed funding opportunity because you didn’t take the time to actively think about your audience. Remember this pitch is for the investor, so make sure it is strategically tailored to their perspective to minimize your risk of missing out on a key funding opportunity.