By John M. Armstrong, PhD, Managing Director
People say entrepreneurship is like a roller coaster, but that isn’t quite right. While it’s true that both cause you to experience a lot of ups and downs, when you climb aboard a roller coaster, you know that you will survive the journey. There are some journeys in life that are not safe. Going to war is in a class of its own, and in a commencement address this summer, US Army Lieutenant General Laura Potter emphasized that “When we deploy, we don’t go to participate; we don’t go to try hard; we go to win, because winning matters.” Clearly, the danger of the entrepreneurial journey is not like going to war, but it is more like rock-climbing without a rope than it is to riding a roller coaster. There is real risk involved.
Entrepreneurship in any line of business requires courage, skill, passion, and tenacity. Get it right, and you’ll be on top of the world; do it wrong, though, and you will lose your livelihood. You’ll also lose your investors’ money – and your own funds, too, if you put skin in the game. As a biotech entrepreneur, though, when you get it wrong, you lose all of that and something fundamentally more important, and that is the chance to help patients who need your technology, and that’s not your loss as much as it is theirs. For that reason alone, winning matters. Trying hard is not good enough. You need to end your journey in a sale or partnership. Get your tech deployed for the betterment of the human condition.
To get it right, a biotech entrepreneur must understand clinical science, unmet medical needs, and regulatory requirements, but even then, the company will still fail if the journey does not begin by aligning on end-users and payer needs. Failing to assess those needs at the outset of the entrepreneurial journey is a grievous act or mistake, but it is not uncommon. In a Greek Tragedy a grievous act or mistake is made by someone foolish and arrogant, only to have the world come tumbling down around them. It is an act or omission of foolish arrogance to put off end-user alignment when starting on an entrepreneurial journey – and a textbook layup for a tragedy. The entrepreneurial journey in biotechnology takes millions of dollars and years of life to navigate. Do not fail to finish that journey in a liquidity event due to something that could have been prevented at the beginning.
Whether you’re contemplating an M&A, a strategic partnership, or an equity financing to get you close to that liquidity event, you will have options. You could contract with a management consulting company for a landscape analysis or some strategic advice. However, while somewhat useful, carving out a path to liquidity requires a far broader mindset, taking into consideration a multitude of factors and variables, the confluence of which will substantially increase the probability to closing a successful transaction. For those liquidity events, you need an investment bank, and my advice to you is to shop around.
If you want a bank that will do what you tell them, that will trust your intuition and years of experience, that will be relentless in its pursuit of the valuation you’ve assessed and your exit strategy, then we are not your bank. You will find that there are many banks who will be happy to sign an engagement with you, for like the management consulting companies who have no accountability for your success, they’ll be happy to take your payment. Such an engagement could go on for years, of course, so be prepared to pay for that engagement.
At Outcome Capital, getting you to that exit and getting your technology to patients matters to us. Seeing that you and your shareholders get a return on their investment matters to us. That’s why we do not enter into an engagement with any company unless we believe we can close on a transaction, and when we engage – when we ‘deploy’ – we don’t go to participate; we don’t go to try hard; we go to win, because winning matters.
June 23, 2021, Reston, VA Outcome Capital, an investment banking firm that serves middle market growth companies in aerospace, defense and government services, technology, and life sciences, is pleased to announce that Nova Technologies (“Nova” or the “Company”) has received an equity investment from Slate Capital Group, a private equity firm based in Baltimore, MD, […]Read More
June 17, 2021 09:40 AM Eastern Daylight Time BOSTON–(BUSINESS WIRE)–Outcome Capital, a specialized advisory and investment banking firm that serves middle market companies in the life science and technology segments, today announced that Veranex, a newly formed concept-to-commercialization service provider dedicated to the medtech industry, has acquired Boston Healthcare Associates (BHA), a global strategy consulting […]Read More
Outcome Capital Life Science Market Pulse August 2021 Click to view our LifeSciences Pulse NewsletterDownload