Safeguarding funding to realize innovative ideas is an age-old struggle. Such stories have fascinated me for years, because there’s a lot to be learned from them. Last summer, on my visit to the Nikola Tesla Memorial Center in Croatia, I was reminded of the inventor’s extraordinary life. In 1901, Tesla lost funding while building his Tesla Tower for wireless communication and power supply – with dramatic consequences.
Life Sciences entrepreneurs today face similar challenges to Nikola Tesla: finding sufficient money to test and develop innovative products, identifying a good product-market fit to enable market introduction, and coping with the many unexpected (scientific) twists and turns that accompany highly innovative projects. During the construction of his Tesla Tower for wireless intercontinental communication, Tesla was suddenly confronted with a competing technology. In an effort to mitigate risks, he shifted his business focus to extend the product-market fit to wireless power transmission. Unfortunately, he was unsuccessful in convincing his primary investor and lost the funding.
Strategic Venture Financing service
With FFUND’s new Strategic Venture Financing service, we aim to prevent Life Sciences entrepreneurs from suffering the same fate as Tesla: derailing an innovative company due to business-related issues. Financing challenges result in the stagnation of innovative technologies and keep them from ever becoming available to society. Just look at what happened to the Tesla Tower: it was demolished before it could even be completed, and the technology was lost to us.
Start with the end in mind
As Nikola Tesla experienced, you can all too easily miss out on success if you don’t work with a rolling business and financing strategy that covers the product and company development steps from start to finish. At FFUND, we always start by defining the endgame for the technology, the product-market fit, and what level of success the founders and shareholders expect from the technology. From there, we reverse engineer the financing strategy: how much money to collect, how to balance dilutive and non-dilutive funding, what investor types to focus on and how to keep them on board, and where to start gradually building up business value.
Financing is a continuous process
A common issue among entrepreneurs is that they wait too long before securing their next financing round. This causes stress, drains time, energy and money, and slows down product and business development – in Tesla’s case it even led to the termination of his project. Entrepreneurs who are running low on money have a much weaker negotiating position. This can cost them stock position, control over their business, and a significant amount of money when the company becomes successful. Our Strategic Venture Financing service is designed for entrepreneurs who wish to save time, gain historical expertise, and receive financing through a meticulous and continuous process. With our support, we help companies’ management teams optimally advance their innovations and achieve their dreams.
Business strategy to optimize your success
The development of a new scientific concept or technology is often accompanied by business insecurity. That insecurity prevents many entrepreneurs from developing their business case, which in turn creates more insecurity. Once proof of concept is successful, innovative companies will need to attract funding and convince investors to make more and bigger investments. At FFUND, we provide a structured approach that runs in parallel with the advancements made in the (scientific) proof of concept, validation, and upscaling of your product development. Together, we follow a structured and stepwise approach for growing your company’s business- and financing strategy and documentation, which you need to be successful in every stage of the process. This includes finding the optimal market opportunity, and a strong match with investors and their funds. An essential part of that is understanding the shifting dynamics in the Life Sciences and health funding landscape, and the consequences of the looming economic downturn.
Independent and tailored support that follows your company’s pace
Our approach requires that we become an integral part of the company as an extension to the management team. This is how we can provide the leadership needed to identify the right investors and funding opportunities, generate a quality data room business plan in line with the funding need, and develop a rolling financing strategy and execution that maximize the chance of success. Acting as a true member of the team, FFUND’s dedicated venture finance strategist is up to date with all the ins and outs of the company. This allows us to determine the exact requirements for the ongoing financial plan and future financing needs. We then make careful preparations for the next financing round and prepare CEO’s to negotiate the best terms and conditions for their (investment) deals.
A mirror image of your company
In addition to leadership and hands-on support, our clients value that we hold up a mirror and provide them with an honest reflection of their company, revealing how various investors and funding bodies will see them. Often described as the true value of gaining independent strategic venture finance support, this enables them to make well-informed decisions, solve potential challenges, and be strategic about their strengths and weaknesses before reaching out to the perfect investor match. In the end, you only have one shot to make a great first impression when disclosing your full company story and data room.
Save money, energy and time
I’m very excited that we have found the key to delivering independent Strategic Venture Finance services, and bringing independent, high-quality strategic- and hands-on support that leverages the full value of our team’s collective knowledge and experience. We work with a fee-for-service model that can be scaled up and down depending on the needs and progression of each venture. A model that is designed to save money, energy and time, while achieving the intended goals with better results. Our purpose is to generate true value in Life Sciences and help entrepreneurs bring more innovations to market. Just imagine: had Tesla been successful, maybe I would have written this blog on a laptop with wireless power connectivity.
This blog was written by Judith Smit, CEO FFUND