June 26, 2013
A new life sciences angel group called the Mid Atlantic Bio Angels is looking to infuse some capital into startups tackling some of the most pressing health issues.
Based in New York City, the group invests in pharmaceuticals, health devices, and health apps. Entrepreneurs can apply to pitch to them, and some of the 60 members may invest together to create a funding round of up to $500,000.
The group made its first investment in June to Cerus Endovascular, a minimally invasive device for treating aneurysms.
Mid Atlantic Bio Angels grew from a friendly discussion about the difficulties of life science investing – a lawyer, entrepreneur, and investor walked into a bar, jokes Yaniv Sneor (the entrepreneur). One of the problems he discussed with future cofounders Bernard C. Rudnick and Stephen M. Goodman was the sheer lack of interest and understanding that general angel investors have for life sciences.
“Most angels, if you talk to them about all this gory blood and guts stuff, first of all they don’t understand it, they’re not interested, and it turns them off,” says Sneor.
Not that it’s their fault – investing in health and medicine is complex. You have to understand the science behind the product, whether there’s a true need for it, and the “standard of care” – what’s being done now. You can’t easily visualize the product and its potential the same way you can for a food app or a Kickstarter watch.
Not only that, but life science startups require more money and more time to realize their potential. Their journey begins with a back-and-forth with the FDA, figuring out how to show safety and efficacy for their device or therapy. Then begins the testing: first on models, then animals, then a group of humans. Even the simplest tests can take one to two years, says Sneor, and showing survival rates takes even longer. You might have promising results in mice, only to find grave and unexpected side effects in humans.
If you’re a life science startup ready for this challenge, here’s how to pitch to the Mid Atlantic Bio Angels:
- Read their investment criteria. You should have a prototype or proof of concept, and be able to show a substantial market need. In the long run, you should need to raise no more than $10 million (since raising more would dilute the angels too much).
- Apply with a Submission Cover Page and executive summary. If they’re interested in your application, steering committee members may contact you. You’ll have to convince one of them to “sponsor” you and support your pitch to the group. Their website warns that the pre-screening process can be “lengthy.”
- Pitch at one of their monthly meetings. Only 20 percent of startups make it this far, with up to four startups presenting each month in New York City. If you present, the group claims some rights to invest in future rounds (whether or not they choose to invest):
“MABA does not charge companies a cash fee to present. Instead, it receives from the company the right to invest certain amounts in the company, at the next round’s valuation, a right MABA may take several years to exercise.”
- Get feedback. If your application is rejected before you get a chance to pitch, the angels will provide feedback.
The Mid Atlantic Bio Angels is hosting an event tonight called 1st Pitch Life Science, so register if you want to learn more about the life science industry or pitch your startup to the group.
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