August, 2022 | Monthly Newsletter
Afternoon! It's Wednesday. August is ending. Let's recap the content we published:
Hope you enjoy! Let us know if there is anything you'd like to see us cover.
Articles, Blog Posts, & Resources
There is no standardized way to fundraise in the life sciences industry, although some paths are well-traveled. With multiple funding sources available, it’s all about what you and your potential investors want to see in a company and what you expect from one another.
Financial modeling, a tool most often used by investment bankers, equity research analysts, and private equity firms, becomes critical to successful later-stage startup fundraising rounds.?Financial models?can be an important reason professional investors decide to invest in a startup because of their usefulness in evaluating a company’s future value, sales, and ability to grow.
But financial models aren’t solely used by investors for business valuation and raising capital. They can also be used internally to anticipate the future, make necessary changes, and analyze new business opportunities.?Continue reading.
Early-stage biotech and life sciences companies focused on developing therapeutics, diagnostics, medical devices, or providing contract research services rely on every single dollar. And like many founders before you, you may be starting with very little in the bank. Especially when considering how much it takes to build a company in the healthcare and life sciences sectors.
If you plan to make the greatest impact with the least amount of money, then that leaves little room for vague financial planning or surprise cash shortfalls. However, budgeting and forecasting can often be daunting to a first-time founder or new founding team.
Despite the challenges, it’s essential that you and your team know exactly how much cash your company has on hand at any given time, from cash in the bank to cash in hand. How do you do that? By creating a?budget.?Continue reading.
Even if you’ve never backed a crowdfunding project, you have at the very least heard of crowdfunding sites like Indiegogo and Kickstarter, where creators can raise funds from fans and future customers for their ideas.
These online platforms tend to be very effective for creative projects, hardware, and social impact entrepreneurship, but are generally not well-suited to biotech companies. Biotech startups usually require a large amount of up-front capital and are not able to turn products around as quickly as their hardware counterparts.
Equity crowdfunding, on the other hand, can be a way for early-stage life sciences companies to raise a significant amount of capital in a short period of time.??Continue reading.
“Due diligence” is an important step in fundraising. It is also a key aspect in mergers and acquisitions and corporate finance. In this article, we will mostly focus on its role in fundraising.
When it’s time for a potential investor or acquirer to perform a due diligence investigation on a target company, the business will have most likely wowed them with an impressive idea, business plan, or model. The interested party is now looking to confirm important details and metrics about the company in order to make a more informed decision about going through with the investment or not.
This assessment will cover a few major things: the company’s people, money, product, and equity, which can be categorized as legal or financial due diligence. Most items will apply to any investors being pitched, but usually each one will provide the target company with a checklist so that they don’t miss anything that is specifically important to the investors.
If due diligence is something your company is preparing for, you’ll want to know what you’re expected to provide. The investor you’re working with will tell you exactly what they’re looking for. However, depending on the type you’re working with, what that investor is expecting may vary.?Continue reading.
领英推荐
Equipment leasing involves a series of steps, from picking the equipment you want to getting an instrument quote through a manufacturer to finalizing a lease agreement and submitting a first payment.
One of the most crucial steps in equipment leasing is underwriting, a process through which the leasing company you’re working with assesses the financial health of your company, and determines if there is any risk of leasing or lending to your company. It ultimately dictates whether you will get a final approval for the equipment lease or not.
Learn what underwriting is, who performs it, where it fits into the equipment leasing process, and what documents you will need to provide.?Continue reading.
Equipment financing can be an excellent option for business owners who need expensive equipment to improve or expand their operations. For scientists, this means getting specialized or updated equipment into the lab that can help accelerate mission-critical R&D. Equipment leasing, a specific type of financing, comes in different flavors.
Would-be lessees can try to secure a variety equipment leases, including:
If you’re planning on leasing, it’s important to know the characteristics of each lease type. It can help you make a decision that suits your financing and equipment needs.?Continue reading.
Whether it’s a single bench in an incubator or a dedicated facility, life sciences companies often pay a lot of money to buy or lease lab space. A lab bench can cost thousands of dollars per month to simply rent, and buying property is generally a multi-million dollar expenditure.
According to STAT+, a lab bench and a couple of shelves at?LabCentral?in the Kendall Square neighborhood of Cambridge, Massachusetts,?cost one researcher $4,600 per month, back in 2019. It wasn’t just LabCentral, either. At the time, lab space cost per square foot in Kendall Square was averaging close to $100 per square foot. Despite the costs of the bench, the researcher, Scott Robinson, found that paying for the space put him at ground zero of a robust life-sciences hub.
Boston isn’t the only example of areas with high rent for lab space. According to Statista,?the highest rent for laboratory and life sciences space in 2020?was in London, with average costs of $113 per square foot. New York followed behind with average per square foot prices of $105.
Access to a larger community of peers and resources is always important for founders, but sometimes it can be shocking to see the prices. $4,600 is a lot to pay per month for a small space, even if it means you’re closer to a supportive and innovative community of scientists.
Increased demand for life sciences lab space and a shortage of supply paired with the challenges and costs of constructing a new facility or converting old office space has made it harder for scientists to find lab space.?Continue reading.
Buying new lab equipment can be costly, and the need to regularly replace unreliable or inefficient instruments can lead to shrinking budgets, shortened cash runway, and other disruptive financial woes. Rather than purchase, labs are financing equipment acquisitions more and more to keep up with their own financial and operational demands and the progress of competition.
Equipment leasing allows growing laboratories to get the equipment needed to reach milestone goals without tying up large amounts of capital in expensive instrumentation that could be better allocated to R&D.
The problem is, signing a lease agreement can include a lot of terminology, terms, and conditions that are confusing if you haven’t leased or financed something before.?Continue reading.
Leasing can often seem like a different language. When working with a leasing company, equipment distributor, or manufacturer, you may encounter terminology (terms, concepts, acronyms, and phrases that you haven’t heard of before, but that apply to your ability to lease, your agreement, and your terms negotiations.
We’ve created a comprehensive leasing glossary of terms and definitions below to help you better understand leasing terminology used in conversation, application processes, and equipment lease agreements.?Continue reading.