Twenty-two of the Bio2014 International Convention’s estimated 15,000 attendees got a chance to give a 30-second elevator pitch to some of the life science sector’s top venture capital firms Tuesday in the “Son of a Pitch” session aimed at improving these brief first encounters with venture capitalists.
Bio2014 is being held at the San Diego Convention Center through Thursday.
The top two pitchers were awarded a half-hour meeting with the three seasoned VC judges, and the rest of the room was awarded a load of pitching tips and techniques to pique the interest of VCs and get a second meeting.
“Tip No. 1 -- listen,” said Douglas MacDougall, president of MacDougall Biomedical Communications and moderator of the workshop. “Never go to a meeting with a VC without thoroughly analyzing their website and really understanding what they’re looking for.”
He said it’s important to target your pitch to the specific needs of a firm and go into any meeting -- even a short one -- knowing what angle to play up and in which areas the VC might need more or less information.
Ed Torres, managing director of Lilly Ventures, also emphasized that it’s important to focus the pitch not just based on whom you’re talking to but also what you want to get out of the interaction.
“Almost all of us are of the opinion that a very common mistake is not focusing on an objective for that specific interaction,” Torres said. “We all work very, very hard, and sometimes what happens is you want to convey 10 years of blood, sweat and tears into a sentence, and that doesn’t accomplish anything. The objective in the elevator pitch is to get somebody to lean forward and want to have a second conversation with you.”
Ken Haas, partner at Abingworth Management, said part of this objective should include an "ask," or brief statement on the money you’re looking to raise. Caleb Winder, managing director of Excel Venture Management, said the more specific this ask, the better.
“I really also want you to mention why you’re raising money,” Winder said. “What are you trying to accomplish? Are you raising funds to commercialize?”
One aspect of the pitch that depends on your style and the specific interaction is differentiating your product from others in the marketplace.
“What’s unique about the drug? That’s also something you could include -- or not, because if you want to engage me, then I’ll ask that question and we’re actually having a conversation,” Haas said. “You have to judge the situation to figure out if you should leave the tease out there.”
The panel was somewhat divided over the issue of credibility versus passion, with Haas saying he expects the entrepreneur or scientist pitching to be passionate and biased about the product, and Torres saying he tends to prefer a larger dose of reality.
“To me, if somebody says ‘no side effects,’ they are not getting a second call,” Torres said. “You need to have some customer intimacy and understand where not to cross the line between credible and passionate.”
One pointer that was brought up because many of the pitchers did just the opposite was that in an initial short pitch, mentioning IP is actually not necessary.
“Do you guys care about the IP status in the 30-second pitch? I do not,” Torres said. Haas agreed.
“I recognize that IP is seminal,” Torres said, “and it’s the only way to monetize your good innovation, but if you only have 30 seconds to pitch, I wouldn’t spend time talking about your IP.”
OK, so you’ve nailed the initial pitch and have earned a second meeting with a VC -- which, in Abingworth’s case occurs only for about 20 percent of the 1,000 deals they see a year. Now what?
MacDougall suggested setting an agenda for the meeting, outlining how many minutes you’ll spend presenting your information and how many minutes you’ve allotted for question-and-answer dialogue with the firm. He also said it’s important to minimize the number of slides you bring to this meeting -- no more than 10 to 15.
Haas said this second meeting should focus on the science behind the innovation or product that grabbed the attention of the VC, which should naturally lead into the differentiating aspects between your offering and others like it.
What if you’ve done your research on the venture firm and your innovation or service doesn’t quite align with what it has done in the past, but you’re convinced that it would be a good match? Haas said sending a note asking for a brief, informational phone call is a good option.
“If people are looking for help, we actually want to give it -- we have limited time, but sometimes if you’re in that situation, sending a note that says ‘We have something that might be interesting to some of your clients and we’re trying to figure out how to position it’ …, that actually tends to be easier for me to do than actually having someone pitching their company because I know it’s going to be kept to 10 minutes. ...We don’t always get the chance to be able to help people, and it’s nice to be able to.”
The last tip was from MacDougall and focused on the second, slightly longer two-minute pitch: a step between the elevator conversation and an actual meeting. He said presenters tend to feel the need to fill up the full two minutes talking about themselves and their product, when in fact some of this time could be better spent connected with the VC and asking what specific information they’d like to hear more about, so the meeting can be tailored to their requested needs.