An investor from a healthcare venture capital firm discusses the best practices of pitching to investors.
An entrepreneur's repertoire must include the ability to sell his or her idea. For medtech entrepreneurs especially, who are steeped in the world of science, human biology, engineering and lab testing, it's imperative to acquire the skill set of a good presenter.
That ability to convince investors will be on full display at the MEDevice San Diego conference, Sept. 2, an event hosted by the publisher of MD+DI. At the event, three California entrepreneurs will take the stage to convince a group of venture capitalists to invest in their startups.
One of the venture capitalists — Nimesh Shah, partner at Domain Associates — who will grill the entrepreneurs at the "So you think you can Pitch" session spoke with MD+DI to spell out exactly what the bones of a good investor pitch are.
Keep it Short
|Nimesh Shah, Partner, Domain Associates|
"A lot of folks get bogged down in unnecessary detail - a lot of verbiage - and while it's important to have at your fingertips the necessary information - you don't the audience or those receiving your message to get bored or lost in the process.," Shah explains.
Maintaning that attitude of only talking about what is pertinent in a manageable number of presentation slides will help entrepreneurs stay within the time allocated for the pitch, he advises.
Practice makes Perfect
Practice, practice, practice. It may seem off to present in front of a colleague, but that person can help evaluate the presentation and that will help the pitch go smoothly
"Practicing will help you to understand how to deliver the message," Shah says.
Highlight Clinical and Reimbursement Pathway
Given the focus on value these days in the healthcare world, even early stage startup entrepreneurs need to make available any clinical information they have about the product they are developing.
"You have to lay out what clinical questions you will be answering in the course of your company's development," he says. "It's not simply enough to say 'Hey, this is cool.' [You have to answer, 'Is this driving a differentiated clinical outcome better than what is already available? How is it doing so? Is it doing it faster, better cheaper'
Don't Dance Around a Question
"Not answering a question or answering it in a way that leads to the impression that you are trying to hide something" is a strict no-no when pitching to investors.
"We're all dealing with smart people so don't try to put the wool over their eyes," Shah cautions. "Listen to the question being asked and then answer the question to the best of your ability."
There may be a situation when the entrepreneur truly doesn't know the answer to a question from an investor.
"[They might say,] 'I don't know the answer to that question, but it's a good question and I will look into it," he says.
Don't Read From Slides
"If you have a ton of words in your slides, and all you are doing is reading from them, then it's not very efficient," he points out. "I might just read that on my own."
It's a very common mistake that he has witnessed over time.
In conclusion, Shah said that for healthcare entrepreneurs its incumbent from very early days to understand the regulatory and more importantly the reimbursement pathway for the product being developed.
"In a prior era, you might have just kind of glossed over some of those things saying that it's straightforward, or 'if you build it they will come' or 'if you build it, it will get approved and paid for," he explains. "But now folks are saying, 'I need to understand why someone is going to pay for this. What is the regulatory time frame? Is this going to get used preferentially over something else?'"
|To learn more about medical devices and trends in the marketplace, attend the two-day MEDevice San Diego conference, September 1-2|