If you are following our blogs, you would have probably seen our recent post announcing the launch of InSynchrony Ventures Inc.’s Strategic Investment Vehicle. As one of the founders of InSynchrony with its alternative investment strategy, I was very intrigued to attend the panel discussion on “Working with Alternative Investors” at the BioEurope Spring 2017 conference.
The panel was made up of Carolyn Green from Pfizer‘s strategic investment arm, Daniel Oliver Uriel from Capital Cell, a Spanish crowdfunding platform, Richard Seabrook from the Wellcome Trust and Marc Lemonnier from Antabio, a biotech developing anti-infective.
The team had a lively discussion that largely focused on biotech start-ups; specifically, what these start-ups can expect from investors versus what they actually need. The discussions lead to the suggestion that start-ups not only need capital but as equally as important, they need advice, support and direction (also known as “smart money”).
- Pfizer certainly provides money and access to their vast knowledge base. However, the down side for start-ups raising seed money is that like many traditional VCs, the typical Pfizer investments are too large for the seed rounds.
- The Wellcome Trust does support smaller investment needs and provides significant support via their research steering groups. However, they only provide project based capital and not working capital, therefore leaving a gap.
- The crowdfunding approach provided by Capital Cell seemed to be very well geared to early staged investments whereby many small investors invest small amounts in companies via custom created special purpose vehicles. This means that only a single shareholder is added to the cap tables but ultimately this approach does not necessarily provide the support and knowledge needed since the investors are often not biotech savvy and don’t hold any board positions in the companies.
So it seems that combining some of these different sources of investment could be a good solution. In fact, Antabio did exactly that by seeding their company through crowdfunding and then bringing in angel investors and the Welcome Trust down the line which ultimately brought more capital and knowledge. Their story supports the crowdfunding approach since when the angel investors came in, the crowd investors got an exit!
Overall, it proved an interesting session for me to attend both confirming and reinforcing the reason I started InSynchrony Ventures in the first place, which is to provide capital, knowledge and support to early staged companies.
Dean Wenham, CEO of InSymbiosis and InSynchrony Ventures