Mid Atlantic Bio Angels brought a new program to Philadelphia in which early-stage life science companies are selected to pitch its angel investors before they are actually seeking that level of funding. The idea behind 1st Pitch is that by giving companies a preview of the experience of pitching angel investors and providing feedback, it will better prepare these companies for the real thing.
Presenters for the life science startups pitched their companies, received feedback from audience members and a group of investors from Mid-Atlantic Bio Angels, and all voted on their performance. It was billed at the start as a benevolent shark tank, but a benevolent shark tank still has sharp teeth. Although most of the comments were helpful, there was at least one exchange that prompted a couple of the angel investors to remind the packed room of lawyers, investors, advisers and entrepreneurs not to get personal.
As a reporter, it was really interesting to hear the contrast between what presenters highlighted about their companies and what investors wanted to hear. It also underscored the need for the National Institutes of Health boot camp program to train scientists to be better business leaders. It’s tough for most companies to strike the right balance between science and a business plan — it’s not easy to squeeze so many details in a short presentation.
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First up was LytPhage, a biotech company coming out of Temple University using bioengineering to combat antibiotic-resistant bacteria. Who could argue against a solution for that? But amidst the explanation of how bacteriophages work, and the tests the company had carried out, the investors complained there was too much science and wanted to hear a business strategy. When a member of the company’s team mentioned in passing that they were working with a pharmaceutical company, a chagrined investor exclaimed, “Why wasn’t that in your presentation?” A member of the angel team added, “The fact that you have a pharma partner would have been the first thing I would have talked about. Those are things from a risk perspective that I would like to hear about.”
Other comments sounded more like rhetorical questions: “How many phages have received FDA approval?” A recent article suggests it is a challenging path to tread.
Goodman made an observation that suggested the challenge early-stage companies taking part in an investment exercise when the company isn’t mature enough for funding. “There is insufficient data for a lot of different reasons to commit money at this point….but we recognize this is early first pitch.”
Next was Hastke, a Princeton University spinout that uses 3D imaging to help researchers assess whether therapeutics are penetrating cell membranes. The presenter said the company had spoken to nearly 100 potential customers and many were supportive and even scored some pre-orders.
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This company’s pitch spurred a huge response from investors and the audience and little was positive. Many complained that without any images of the actual device they have no idea how large it is and wanted to see some use cases. That makes it difficult to evaluate production costs, how many of them companies would want. Another said he wondered why it would position the device as a research tool rather than a drug discovery product because it reduces the value.
“What have you got? I didn’t see anything about manufacturing, nothing about costs…You have a room of reasonably bright people, but you lost everybody.”
The presenter’s manner of thanking audience members for good questions visibly annoyed one commenter who remarked she was being condescending by not answering questions put to the company.
RAbD Biotech uses big data to design biologic agents to treat severe diseases — its first indication is ovarian cancer. This presentation seemed the most balanced of the three. The company’s team comes out of MD Anderson cancer center, it explained the technology behind the platform, it explained its approach, but the investors and audience members soon spoke up. One investor pointed out that the company’s strategy may be too aggressive and expressed concern that they would be vulnerable against a big pharma company.
“I think you should definitely find a strategic partner to guide the design of strategic milestones,” observed another.
It was an eye-opening experience watching the interchange. It also underscores the need for entrepreneurs to have a tough skin. Whatever the comments, each of the presenters held their own and gave the appearance of being in good spirits despite the criticism. Companies interested in participating in upcoming 1st Pitch events should contact Mid-Atlantic Bio Angels for an application.
