Our Takeaways from Health:Further 2016September 15, 2016
First of all, if you missed the Health:Further 2016 conference, you truly missed out. It was (and will continue to be) a fantastic gathering of some of the healthcare industry’s leading movers and shakers, and it placed Nashville squarely in the center of healthcare innovation over a two-day window this August.
While great content was delivered through a number of forums, we had our eyes and ears attuned specifically to a couple break-out sessions geared toward helping companies navigate their way to funding and transaction success. We’ve summed up the key takeaways and themes that resonated (because you need to know it or hear it again).
How to Land VC Funding
Our key takeaway? Some VC firms see north of 500 deals a year come across their desk. They might invest in five. (See, there really is a 1% club). Setting yourself apart from the crowd requires effort and intentionality – start here to increase your chances of avoiding the 99%.
- Start Now (and while you’re at it, never stop)
To put it simply, it’s a process. Start planning for it now and make sure you’ve got plenty of balance sheet runway. The average timeframe from introduction to wiring is approximately six months; don’t get to month five and put yourself in a point of desperation.
If you raise money at an early stage, chances are you’ll be moving up the chain in relatively short order. Keep the momentum and start the process for follow-on capital sooner rather than later – putting yourself in a position to be selective versus desperate.
- Know Your Audience
What’s the best way to cut down on that six-month average? Getting in front of the right people, the first time. Do your homework on the funds specific to your space and company size. Know what their investment criteria is – if it does not fit, proceed elsewhere.
Once you have the criteria aligned, determine who the right investor is and then work the warm leads. Secure the meeting and bring the right team with your coherent plan.
Lastly, commit to the follow-up work. It is not their job to reach back out to you a second time for a follow-up request. If you committed to providing an item before you walked out, provide that item and do so timely.
- Be Concise (but bring the detail)
We are people, and we have short attention spans. Our counterparts in the VC world who are looking at 500 deals a year are no different. Bring the punchline and bring it early.
The number one problem of the 99%? They are big on vision and light on detail. Your ticket to funding lies in the nitty gritty. Don’t be strong in vision and try to sprinkle in details. Sprinkles won’t cut it. Make it rain with your knowledge of the market, who the players are and who they aren’t, your go-to market strategy, and how you plan to differentiate.
And please, for the love of all things Inflammo, dress to impress with your financial model that reflects it all. Investors are there for an ROI, so show them how they’ll get it.
How to Prepare & Position for an Exit
Similar to seeking funding, preparing for an exit is a process – a real one at that. While there is no right time to sell – although we did appreciate the comment that “The best companies were those that were bought, not sold” – there is a right time to begin prepping for it. That right time? Well in advance. Perhaps said better: now! There will be friction; act now to reduce as much as you can.
How do you start prepping? Begin building out that data room now. Identify what those key financial and non-financial metrics are that drive valuation within your industry (ARR, MRR, churn, customer concentration, product margins, etc.) and begin working to implement the reporting infrastructure to start tracking against. Nothing will have you better positioned for success than preempting much of their ultimate data requests with a transfer of that knowledge on the front end.
Inflammo helps growing companies access and deploy capital through an end-to-end accounting and finance platform. Schedule a meeting to learn how Inflammo positions businesses to be investable, scalable and ahead of the curve.