Lunch&Learn: How to get investment ready: A VC perspective

Thanks to Ash Patel from Mercia Technologies who came in to give us his top tips around VC funding for our latest Lunch&Learn. 

Ash started by saying that raising VC money is just down to a good sales pitch, but you need to get your house in order first. Here are the takeaways…

  • It sounds obvious, but the difference between a business and a good idea is that at some point, a business needs to make money. The number 1 reason that startups fail (from CB Insights) is that there is no market need. Speak to your customers early and do not waste your time building something nobody wants. “Product market fit” HAS to include financial viability, therefore, make sure you’ve proved that customers want your product and are willing to pay for it.

 

  • Be innovative with your business models - for example, if you’re building deep tech, think laterally… think - do I need to make sales, can I piggyback on someone else’s infrastructure?

 

  • As we all know, there are lots of stakeholders in healthcare - clinicians, providers, patients, regulators and many more - think about what everyone needs to see and your business plan should reflect this. Investors will be looking at it in the due diligence process.

 

  • Have SOME evidence - it can be low grade if necessary - testimonials from clinicians/regulators etc..

 

  • Make sure skill sets in the team are diverse. Investors will see through it if skills are being doubled up in the team.

 

  • Stop taking advice from advisors who have no success - it’s distracting and can lead you down a merry path. A good screening process is asking them to put 10k into your next investment round - a good test of belief in what you’re doing and positive validation for investors. If they don’t want to do that, you probably don’t want them as advisors.

 

  • Regulation is a positive - get through the hoops quickly and you build a moat around yourself. Think of it as part of defensibility.

 

  • Raising money does not equal market validation. People tend to celebrate raising money but remember that you’ve given some of your business away and that is not the objective, serving paying customers is.

 

  • You should be interviewing investors at least as thoroughly as they are interviewing you. Speak to other investees. What value are they adding beyond the capital? They should be adding their experience, their contacts, their time and their capital!

Thanks again to Ash Patel. Do make sure you join us here again for our next Lunch&Learn on Medical Device Design and CE Marking Basics. Book your spot here