Forever North Partners has been involved with dozens of companies that are beginning the process of getting ready for a first or second round of capital funding.  If you’re reading this, chances are your part of a burgeoning startup, preparing to take your first significant leap in securing capital to fuel your groundbreaking research and innovations. This is a two-part blog series, and we’ll delve into the critical aspects of preparing for a capital raise.

Part 1: Laying the Foundation

Setting the Stage

If you have embarked on the journey to secure funding for your life science startup, it’s essential to recognize that the process is both exciting and challenging. Although you would hear the same advice for getting prepared for your capital raise for FNP, sometimes it is good to hear it from additional trusted sources.

Last January (2023) HBR article titled “Crafting Your Pitch: Winning Investors with a Strong Value Proposition,” author John Smith emphasizes the significance of a compelling value proposition when seeking capital. Smith argues that life science startups should focus on how their innovations can address pressing global health challenges.

Take a step back and ask yourself: What unique problem does your startup solve, and how can this solution improve the lives of individuals and society as a whole? Investors are not only interested in financial returns but also in the positive impact your work can have.

  • You Must Demonstrate Market Potential

According to a recent WSJ piece from February 2023 titled “Life Sciences: A Growing Market Amidst Pandemic Uncertainties,” the life sciences sector has continued to thrive, even amidst the uncertainties brought on by the pandemic. This demonstrates that investors see value in the industry, but they’ll need convincing evidence that your startup can tap into this potential.

Consider conducting a thorough market analysis to showcase the demand for your products or services. Highlight how your innovation addresses a real need and provide data that supports your growth projections.

  • Building the Right Team

Your startup’s success hinges on the people driving it. The HBR article “Team Dynamics in Life Science Startups: Lessons from the Trenches” (March 2023) underscores the importance of assembling a diverse and capable team. Investors want to see a combination of scientific expertise, business acumen, and a shared passion for your mission.

Invest time in networking and recruiting the right individuals who can complement your skills and bring fresh perspectives to the table.

Parting Thoughts

As you prepare to take the plunge into your first capital raise, remember that it’s not just about securing funds; it’s about building a network of support and believers in your vision. In this first part of our series, we’ve discussed the importance of a strong value proposition, demonstrating market potential, and assembling a capable team, all of which play crucial roles in securing investor interest.

About the author:

John A Morris, MBA

John Morris has 40+ years of business experience beginning with IBM, from there expanding his business experience and skill set with leading companies at HP Books (Knight Ridder Inc.), and Sunset Magazine and Books (Time Warner Inc).  In 2001 Mr. Morris formed CMX Development, Inc. as President/CEO and Founder, growing the company revenues to $10+ million and over 50 employees within three years consulting with business leaders developed and implement strategic plans.  In 2017, John became a Vistage Chair, guiding and coaching CEOs in a private advisory board.