SOUTH RIDING, VA, October 24, 2017 —Slone Partners, North America’s premier healthcare industry executive search firm, organized a focused panel discussion, Building an Amazing Organization With the Strength of the Right Financial Partners, achieving rare insights into the importance of strategic financing for nascent-stage healthcare firms. The panel participants – Bijan Salehizadeh, MD, Managing Director of Navimed Capital (who acted as moderator); Oded Ben-Joseph PhD, Managing Director of Outcome Capital; Vikas Goyal, Principal of SR One; Sarah Larson, Partner at Third Rock Ventures; and Ryan Sansom, Partner at Cooley – lent executive expertise and deep context regarding the complexities and considerations of early and growth-stage capital availability. The panel convened at LabCentral, the nation’s first-of-its-kind shared-lab facility for high-potential life sciences and biotech startup firms.
In the tradition of the firm designing thought-provoking live programming in major healthcare hubs on a quarterly basis, Slone Partners balanced the discussion to address the bilateral needs and perspectives of both investors and healthcare firms seeking foundational financing. Among the “How To” topics discussed:
1. Navigating opportunities and avoiding pitfalls when considering venture investment
2. Selecting the right timeframe and process to seek outside capital
3. Identifying key attributes of an ideal partner
4. Leveraging venture investors and board of directors to enrich the odds of success
5. Planning early for a successful exit
The 90-minute free-flowing conversation, moderated by Dr. Salehizadeh, produced key takeaways which could determine potential outcomes of success, oscillation or failure by various parties – the startup CEO’s, Boards of Directors, and capital partners.
Scientific founders must see beyond, and detach from, the science, and delve quickly into the business of commercializing their ideas, understanding their limitations, delivering bad news to partners and boards early, and mitigating risk through planning for failure. Without achieving a truly universal perspective, the chances of attracting additional financing is reduced.
It’s vitally important to retain financial and legal advisors (a second party) when structuring deals with a third-party investor, as the release of milestone-based capital can often be poorly defined, sometimes giving investors “easy outs” when companies underperform.
Inexperienced biotech investors attempting to capitalize on gold rushes triggered by exciting new technologies or regulatory wins are often not accustomed to high-risk environments. Both parties need to truly collaborate to strategically and tactically mitigate risk.
When working with investors, companies need to understand the fund cycle. Are they in the fifth year of the fund? Is the person joining the funded company’s board an owner in the fund? Is that person a decision maker of the fund?
Founders of companies need to have very specific and honest conversations prior to the co-founding, regarding ownership of the company, who owns what intellectual property, individual strengths, defining daily involvement, and “divide and conquer” responsibilities. Failure to have these conversations can lead to leadership breakdowns, conflict and legal jeopardy. Early CEO, CBO, and CSO hires are paramount to bridging gaps, raising capital, determining valuation, and of course running the business.
Conducting reverse due diligence on board members is vital in determining culture fit, individual value they bring, personal and professional agendas, probability of dysfunction, and their collaborative spirit. Why is a particular board member interested in your company? It’s important to recruit, vet and involve the board the same way a leadership team is assembled, and sometimes a good idea to limit board terms to 2-year elections. Separate scientific advisory boards are also vital for deep R&D reviews, impartial perspectives, and advice regarding both IP and personnel issues.
In the simplest terms, successful exits are based upon the foundations and fundamentals of good science, achieving early validation, and good segmentation.
“Slone Partners is honored to attract the brightest minds in healthcare to give their time and insights into this fast-paced and complex industry. Life sciences, diagnostics, and biotech financial partners and startup companies have the same goals – to improve and extend the lives of patients while commercializing the most meritorious, sometimes audacious ideas. Our team is delighted to regularly be at the epicenter of these important discussions,” says CEO Leslie Loveless.
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 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 executive search services, visit www.slonepartners.com