Get out of the Province and Other Learnings from New England VCsShawni Beaulieu January 19, 2018
Ryan Reid, January 2018
Last month, I travelled to Boston to attend the New England Venture Summit. Organized by YoungStartUp Ventures from New York, this event brings together investors and entrepreneurs for a day of pitching and networking. Over 100 venture capital firms from across the U.S. were represented, from small niche firms to the high profile players like Kleiner Perkins. Angel networks and corporate investment arms (like GE Ventures) were also on hand. On the other side, seed, early and growth stage start-ups pitched for investment in various sectors: technology, life sciences, cleantech and education tech.
My goal in traveling to the Summit was to determine if it was a fit for the start-ups we work with at BioNB. I also wanted to network and make some connections on the investment side in the U.S. With capital so limited in Atlantic Canada, organizations like ours are making connections with outside investors to put our region’s investment opportunities on their radars.
I came away with three key observations.
First, the top start-ups in New Brunswick can definitely participate at this level and have a chance of success. Both the ideas of our entrepreneurs, along with our presentation and pitching skills, are as good as, or better than, what I saw in Boston. But we fall down in the composition of the leadership team. I noticed that the best start-ups had highly experienced teams with a mix of technical experts (for example, a physician and medical systems engineer), along with experienced business people with specific “domain expertise.” This term came up time and time again. Leadership teams had members with deep experience in the field – if it was medical devices, they had 10 or 20 years’ experience in sales and marketing exclusively in this sector. They clearly knew how the sector worked and had a Rolodex of contacts to open doors. It’s not enough to find someone with a “business background” who worked in a completely unrelated industry. Especially in biotech, you need this domain expertise to move quickly and efficiently to market.
Second, to my knowledge, I was the only person from New Brunswick at this event. At an event that was just a 7 hour drive away and brought together a room full of top investors, it’s such a shame that I was all alone. I understand that it can be a challenge to spend valuable time and money to travel, but try not to think of attending worthwhile events as an expense. Rather, think of it as an investment. There are so many pitching opportunities these days, with quick and easy online applications. If you’re accepted, you’ll get in front of people you would likely never have the opportunity to do so otherwise. If you don’t get accepted, you’ve only lost 20 minutes of your time, and you have material to be recycled for another application. And, you can always just attend to meet people. For biotech, Boston is one of the major hubs in the U.S., and there are many programs available to help start-ups get their toe in the door in New England.
Third, the members of the investor panels were unanimous about this: the long-form written business plan (50 pages or more) needs to go the way of the dodo bird. Why? Preparing it just consumes your valuable time and is of no value to an investor. They don’t even read them. But this doesn’t mean they don’t want you to plan your business. Instead of the written plan, save some trees and your time, and use tools like the Lean Canvas, the Business Model Canvas, or put together a business plan that fits on a 10-slide deck. The time you save can be better used developing a prototype, talking to potential customers, hiring staff, and building relationships with investors. I’m also directing this advice at funding agencies and investors: please help save everyone’s time and help focus thinking and planning by no longer asking for the long-form plan.
So there you have it, three ways to increase your efficiency and move the peanut forward on your start-up: work on building teams consisting of members with relevant and useful knowledge and experience, spend the time and money to get out of New Brunswick to network and gather knowledge, and let’s put the written business plan into the dustbin of entrepreneurship. BioNB can help bioscience start-ups in all of these areas: with guidance on business planning without the 50-page plan, connections into Boston and the U.S., and a list of pitching opportunities across North America.