Key Takeaways
- Life sciences and healthcare pitch decks are distinctly different from tech sector pitches, but there are fewer resources to help life sciences entrepreneurs.
- When pitching investors, founders need to build a case that adequately addresses the long clinical timelines and increased risk that investors bear with a compelling storyline about a winning exit.
- The best pitch decks explain the technology and problem it solves, the clinical development timeline, market sizing and opportunity, as well as the key luminaries that support the company.
The best life sciences pitch decks build a compelling business case through a clear narrative
Creating a convincing pitch that succinctly summarizes the business value of an inherently complex bioscience or technology based solution is no easy task. If you’re a life science or healthcare entrepreneur, the stakes are high for a sharp pitch deck that tells the story about the problem you’re solving, the size of the market you’re addressing and whether your team has charted a viable roadmap to success with a clear exit. According to SVB’s proprietary research, venture investment in 2020 in biopharma, healthtech, diagnostics and tools as well as medical devices was up 57% from the previous year - topping $52 billion with a record number of IPOs.
As an entrepreneur, you may have a good idea in general terms about what investors look for when evaluating startups. There are plenty of resources outlining the common elements in all types of pitch decks regardless of industry - such as a company overview and corporate mission, a section outlining how to effectively size the market as well as an overview of the competition and key stakeholders along with the technical details of your solution and expertise of your team. The challenge is to present all of this in a smart narrative that is concise (less than 20 slides - preferably 15).
However, for first-time healthcare and life sciences entrepreneurs (unlike their counterparts in other technology industries), there is the extra challenge of a lack of industry specific resources to help create compelling pitch decks that speak to investors with brevity and a clear narrative.
The critical difference is that life sciences pitch decks need to take into account nuances specific to key subsectors of the industry as well as the extended timeframe it takes before many of these ventures reach maturity to realize revenue. For life science entrepreneurs, the clinical development pathway will inform not only how much money you have to raise just to get to market, but it will also inform the types of investors you need to secure so that when you do get through the process all of your capital isn’t tapped out.
Key Elements in a Winning Life Sciences Pitch Deck
Because healthcare and life sciences investors take on more risk over a longer period of time, your goal is to demonstrate how your chief asset (i.e. a drug or a device) is strategically aligned with the market and that there is a good chance for successful commercialization.
Though there may be some differences between investor audiences that specialize between different sub sectors - in my experience, the most successful pitch decks tailored for life science and healthcare investors have these six elements in common:
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Impart a clear understanding of the primary asset or product and the target market. The goal is to make sure the reader clearly sees what you intend to pursue. It may sound simple as a concept but can get difficult to pull off especially for more complex technologies. You should paint a clear picture of your product, its unique benefits and how it is strategically aligned with the market. SVB’s life sciences and healthcare sector reports like the Healthcare Investments and Exits reports are a useful source of market trend information that can help inform these time-sensitive aspects of your presentation.
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Articulate the clinical development timeline – on one slide. In life sciences, everything is framed in the context of navigating the choppy waters of the clinical development timeline to the point where your lead asset becomes commercially viable. Your pitch deck needs to include a slide that clearly communicates key junctures investors need to understand to make an informed investment in your company. Your timeline should include important pre-clinical and clinical development milestones and costs associated in achieving each of these. It’s important to clearly highlight the operational costs in addition to R&D costs. The goal is to document, in as much clarity as possible, how much funding is needed to build the business and the time that it would take.
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Demonstrate the “subject-verb” agreement between the market size and the investment capital. In lay-terms, these are the critical details about the requirements to get the product to market as well as provide line-of-sight to investors on the viability of the project. The questions that you would need to answer here would include: Does the asset have a viable commercialization play? Are you addressing a market with a high unmet medical need coupled with a large market size? You should show figures framed in the context of the TAM, SAM, SOM calculations for market sizing that lay out the prospects for a potential exit and could deliver a big win for all parties. TAM, SAM, SOM would cover: Total Addressable Market (TAM) which is the total possible users of the solution you are proposing. Serviceable Addressable Market (SAM) speaks to what is the realistic number of customers that can be reached in terms of market access, regulation and other logistics; and finally, Serviceable Obtainable Market (SOM) which is the specific customer universe that the company can reasonably serve under its current strategy. Each of these are concentrically smaller subsets of the same market. It is important to look at the SAM/SOM as key areas of initial commercialization focus. Deep intelligence and market data is crucial here and SVB’s CipherBio platform provides up-to-date technical and funding data that can help you make a better case that shows a clearer path to a successful exit for potential investors.
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Show the propensity to adopt. Another key element that your pitch deck should demonstrate is the likelihood clinicians and patients will use your product when it reaches the market as well as the likelihood of it becoming a widely used standard of care across the industry.
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List key industry luminaries on your team who can advocate for your solution. It is an open secret that opinion leader advocacy is extremely important when making a case with investors in life sciences and healthcare. Many investors look at the advisory boards of companies knowing that these can help entrepreneurs make mission-critical network connections that often translate into competitive advantages such as access to clinical trials in the best medical centers.
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Highlight the IP of the company. Be explicit about the IP assets your enterprise possesses. Explain the relative strengths they afford your company and your ability to defend your position.
These six interrelated elements are indicative how a life sciences and healthcare pitch deck tends to differ from other technology industries. Making sure that your pitch deck incorporates them will help you sharpen your story and build a compelling case that focusses on areas that your investor audience tends to prioritize – thereby improving your odds of success at fundraising.
