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TMC Innovation News

Focus on the Process, Not Just the Pitch: Five Ideas for Healthcare and Life Science Startups Looking to Improve their Investor Engagement Strategies

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At TMC Innovation, startup founders make up a fundamental part of our vibrant community of innovators. Every year, more than 40 founders take their concept or company to the next level through our Accelerators and Biodesign program.

 

Our programs offer support to burgeoning medical innovation companies through mentorship from industry leaders, business strategy coaching, networking opportunities, and unique access to TMC member institutions. We work with a diverse range of startups across the medical technology, healthcare SaaS, and oncology therapeutics.

 

Working closely with our founders, we learn so much about their journeys, from the biggest victories to the most painful mistakes. A key piece of the journey for any startup is raising capital. Acquiring funding at every level is vital to any startup’s success, and founders frequently pressure themselves unnecessarily with the misconception that the pitch is the only opportunity they have to share their vision with investors.

 

The reality, however, is that the pitch is just one step in the process of building mutual trust and respect with potential investors. We encourage our founders to avoid cramming their entire story into their pitch, and instead focus on intentionally curating their overall investor engagement strategy.

 

After years of experience helping founders achieve success at all funding stages, we’ve found that the most successful teams bring together the following:

  1. Confident and concise descriptions of the problem and solution: Investors are managing a lot of inbound requests. If it is hard for them to understand your company’s primary value proposition, they’ll move on. We know it’s tempting to want to share every valuable piece of information about your company and your idea whenever you get the chance because time with investors feels fleeting. But resist the urge. Because if your idea has value, it doesn’t need to be over-explained. What is the unmet need you see, and how are you going to meet it? Give them your value upfront. You’ll have time to dive into details later.
  2. A clear feasible strategy for implementation of your solution into health systems: Investors spend their resources to help you get your product, service, or idea into the hands of those who need it. Naturally, they are going to want to know that you have a viable plan for doing so. Although life science startups commonly work closely with health systems, they are two entirely different operations. Startups are agile and dynamic, while health systems are well-established and far less nimble. If investors are signing up to help you bring your concept to life, they want to know you have a plan for integration into the current system. So it’s crucial for founders to work collaboratively with clinicians and health system administrators to determine a feasible plan for bringing their product to market in a way that works with health systems’ current operations.
  3. Focusing beyond FDA clearance to market access: Founders of companies that are developing FDA-regulated products know that the clearance milestone is important to their business and to investors, and do typically incorporate milestones and timelines in their pitch and strategy. However, being too focused on that milestone can backfire, as it is an important step to enable sales but is not sufficient for commercial success. Founders who understand the problem they are solving and how each stakeholder will benefit and can contextualize how these factors will drive sales and adoption will have a higher likelihood of success with building the case for how and when investors can expect a return.
  4. Humble and respectful approach to contacting potential investors: Don’t apply pressure, and don’t oversell. Again, if your idea offers unique, protected value, it will speak for itself. Over-explaining, suggesting meeting times in the first contact, or making critical information (your team, your business model) difficult to find will, at best, dilute the impact of your proposal and at worst, make you come off as arrogant or unfocused–either of which will get your email sent to the trash folder.
  5. Use the network to make warm introductions: social proof is always important: Some investors will consider an idea that comes through a cold email, but the response rate for such outreach is less than 5% compared to over 50% if you’ve already had an introduction. Having someone else in the industry vouch for you, your team, or your idea is a hugely valuable first step in the process of building trust with potential investors. If you’re looking to grow your network and make connections with established founders or investors for future warm introductions, you might be a good fit for one of TMC Innovation’s accelerator programs. We offer unparalleled access to the largest network of medical professionals in the world and assist our founders in connecting with the right people to help grow their businesses.

 

As a final note, we encourage founders to carefully consider the full range of funding pathways before committing to a long-term strategy. Life science startups, like other deep tech industries, have several unique and often complex options for gaining capital, all of which come with their own pros and cons depending on your business model and goals.

If you’re an emerging innovator in life science and you need guidance on any of the items mentioned above, we strongly recommend seeking feedback from other founders, investors, or accelerator programs.

Accelerators are designed to provide you with access to the mentorship, industry network, and information you need to build your company on solid foundations and position yourself for success in whatever phase you are poised to enter. To learn more about TMC Innovation’s programs, visit our programs in the left menu bar or connect with us at tmcinnovation@tmc.edu.

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