And What Each One Really Means
I have been working in and around biotech/pharma for possibly more years than you have been alive (gulp). For the past 7 years, I have been a C-suite executive for many nascent biotech or pharma startups. My title is usually either Chief Financial Officer or Chief Business Officer.
My industry is different than tech because we need SO.MUCH.MONEY. Most biotech/pharma products need to go through rigorous clinical trials to receive FDA approval. Without that approval, the companies cannot earn a single penny. And those approvals can take many years, and many millions of dollars.
As a result, biotech needs a lot of upfront funding.
Practically, that means that I have been sitting in fundraising meetings for 7 years. From sitting in so many meetings, I have come to see that the course of the meeting goes four different ways. But first:
Before The Meeting Takes Place
Before going into the meeting, we sent my contact at the VC firm a teaser or executive summary. They reviewed it and agreed to meet. The expectation is that my team will give them a 30–45 min “pitch,” which includes a slide presentation and financial models.
We walk into the room, and immediately start with the pleasantries (how was your flight in? Aren’t we having great weather today?) Sometimes coffee is discussed.
Shortly thereafter, we get into the heart of the presentation, which can go like this:
1) The potential investors appear bored.
On the other side of the table, they stifle yawns, look at their phones, and stare at the clock. I try to ignore these activities. Sometimes, I even ramp up my enthusiasm, almost as a compensatory mechanism. We leave the room wondering why on earth they even took the meeting.
2) The meeting is very interactive.
They ask a million questions. They want to discuss every nuance. Our sector, our product, the competitive landscape, the works. My team and I give each other high-fives as we leave the room.
3) The potential investors look engaged but are completely silent. For the entire meeting.
We have no idea how anything is landing with this investor. Nonetheless, we keep going, talking more than we normally do. We try to fill the silence and guess which parts of the pitch are the most interesting. I walk out shrugging my shoulders.
4) The potential investors spend the bulk of the meeting disagreeing with us.
Our timelines, our research, our numbers, and our take on the competition are all crap. S/he seems to take issue with everything we have to say, before we say it. We all walk out of the room in a flop sweat.
And here is the most critical thing that I have learned, coming out of all of those meetings:
We can never predict the outcome based upon any of those scenarios.
I’ve participated in extremely engaged meetings with an immediate “pass” afterward. I have also sat in meetings where the other side didn’t speak a word, but ended up investing more than we asked for.
I treat all meetings the same. There is no point wasting time by “reading the tea leaves.” My next steps always include a gracious thank you and a quick follow up. That follow up could include additional information on an area of interest.
I never assume someone will or won’t invest until they tell me so. And once that money comes in, I do a quick happy dance, and then get back down to the business of running my company.