JLABS @TMC Connects Early Stage Investors and Entrepreneurs
For budding entrepreneurs, securing funding can seem like a monumental, Texas-sized task. Fueled by a similarly expansive approach, on Wednesday, Sept. 30, JLABS @TMC brought three early-stage investors to TMCx to detail several distinct tracks for partnering and meet, one-on-one, with emerging health care companies.
“The event you’re participating in today is just one example of the great programming that we produce around the country,” said Emmanuelle Schuler, site leader for JLABS @TMC. “We’re aiming to portray the entire continuum of funding options available to startup companies, from venture capitalists to strategic investors.”
Entitled “Meet with Early Stage Investors,” the event featured representatives from three firms—Allegory Venture Partners, Houston Angel Network, and Johnson & Johnson Innovation – JJDC—that represented corporate, angel and traditional venture models hailing from California to Texas. The speakers participated in a series of presentations, led by the Houston Angel Network, to discuss their firms’ key areas of interest, trends and best practices when seeking funding.
“You hear a lot about angel investors, venture capitalists, strategic partners and other entities out there, and the role that these entities play in the ecosystem that we’re operating in,” said Robert Tucci, head of the Life Sciences Group for Houston Angel Network. “The truth is that it’s a continuum, and there’s no strict definition. Angels will lapse into venture capitalists and venture capitalists can lapse easily into strategic partners.
“The most important thing to keep in mind when you approach an investor, of any sort, is that you should be asking a lot of questions,” he added. “What is the sector that they’re looking to invest in and what is their expertise? What amount of money do they typically fund? When you’re approaching for initial funding you need to ask a lot of questions because these definitions overlap so extensively.”
Thomas DeSouza, managing partner for Allegory Venture, provided some clarification on what his firm typically looks for in an investment.
“We’re attracted to digital health, health IT tools and diagnostics, and medical devices, primarily,” he noted. “The reason we like those sectors is because we look for relatively capital-efficient technologies. With early-stage companies, we’ll usually take a more passive approach to investment early on—that enables companies to achieve some scientific milestones that might make us more comfortable with a larger round of funding later.”
All three speakers addressed a fundamental question that plagues most startups seeking financial backing in the nebulous world of life science investments: what exactly are different firms looking for?
“The number one thing that we look for is that strategic fit that’s our main focus at Johnson & Johnson Innovation,” said Renee Compton Ryan, vice president of Venture Investments at Johnson & Johnson Innovation – JJDC. “We invest to create strategic options for the corporation, and we also try to invest in things that support broad initiatives in eye health and lung care, for example. At the same time, it’s really a people equation—I think that transcends all of the J&J Innovation family of activities. It’s really about touching those great entrepreneurs and people like you.”
“What we really look for is good management,” added Tucci. “There are a lot of ideas out there—more than we could ever fund in our lifetime. What we really need is a manager who can take that idea across the line in a reasonable period of time. Often times, what we’re trying to do is gauge whether an entrepreneur is capable of getting their business across the line or whether they’ll be distracted by another innovation or potentially another application for their technology. We’re spending time trying to see if the entrepreneur will listen, learn, and take advice.”
Following the presentation, the entrepreneurs in the audience had the opportunity to network with fellow attendees and the panelists themselves. For several companies who applied online and received approval, Allegory Ventures, Houston Angel Network and JJDC were available to meet one-on-one with the selected applicants.
Part of a larger chain of sessions, the “Meet with…” series of events sponsored by JLABS are designed to help startup entrepreneurs, as well as the academic community, connect with potential partners, from big pharma to other investment corporations, through one-on-one meetings. They also provide a chance for the featured corporation to outline their specific business development goals and clarify what types of products and research they’re interested in, how to best approach them, and ways to get the partnering process started. Past participants include the Welcome Trust, Bill & Melinda Gates Foundation and the Mercury Fund, among others.