Engaging Angels: Lessons Learned from a Scientist CEO
Dr. Lillian Chiang, Co-Founder & CEO of Evrys Bio, explains how to raise funds from Angel investors as a life science company when talking to non-scientists.
Many of us life science entrepreneurs embark on a journey from scientist to CEO. Often, an early-stage trial in this journey is engaging Angel investors. In some ways, this can be even more challenging than pitching professional life science investors from venture capital (VC) funds: Angels may not be as knowledgeable with the landscape of state-of-the-art life science technologies. Angels cannot typically write the large checks that may be needed to fully fund a life science company. My own journey involved aggregating a lot of small Angel investments at an early stage of my company — the hardest money I ever raised based on the time and resources spent versus the aggregate return. That said, my experience with Angels probably had a bigger impact (than VC’s) in making a “businesswoman” out of me. In particular, I leveraged my training as a scientist to evolve into a businesswoman with a solid business plan standing on its own, apart from the “bells-and-whistles” of the technology.
Here are some lessons I learned while raising capital from Angel investors that took me from scientist to CEO.
- Fund-raising, like life science laboratory research, is a full-time commitment — be prepared to respond to due diligence 24/7. Building the first pitch deck is the start, then, revise, revise, revise. Research the potential leads to match your fund-need to the fund-source with the right risk-tolerance profile. In particular, with Angels, find groups that are comfortable with life science investments. For example, our story connected with Mid-Atlantic Bio Angels and certain Keiretsu Forum chapters.
- A good business plan parallels scientific project management — start with the end goal, question your assumptions, anticipate all possible outcomes. An important end goal is your personal goal for all your effort. This personal goal drives your business plan and detailed strategy to exit. Don’t let what you think investors want to hear to drive your exit scenario, because if you don’t believe it — it shows! At the time, my preferred exit was Business To Business (B2B). By working back from the end goal, I clarified how value was created for my early investors even though I was anticipating additional capital raises downstream.
- Leverage your effective lecturer skills — understand and listen to your audience. When pitching, it is about the investor’s needs, not yours. Many Angels do not understand the business model behind therapeutic development and view investing in biotech as a long, binary pay-off or “winning the lottery”. When I came to this realization, my “lecture” became about decreasing the risk of our products through different stages of development and presenting the argument that my company’s technology beats industry norms of stage-associated risk for each phase of development. By beating (or arbitraging) expected industry norms, we create value for investors before the product actually gets to market. How much science should also be guided by your audience. I finally knew I had succeeded when during an enthusiastic Q&A about our business plan, I was asked, “What is the biological mechanism of your therapy? Is it a trade secret?” I laughed and answered, “After umpteen million iterations, I have finally succeeded to pitch as a CEO…I am a scientist by training, and I would love the opportunity to talk your ear off about the detailed science over coffee during the one-on-one…”
- Get to the close! The thesis seminar is not the finish line, a successful thesis defense and the awarded degree is. In science you choose a topic, perform literature and experimental research, change your approach, complete more research, talk to your thesis committee, change your approach, complete a thesis seminar, defend it and finally get your PhD! In business you formulate a plan, research, modify your plan, fill holes, talk to subject matter experts, modify your plan again, screen your pitch, modify, pitch, complete due diligence and finally receive funding! With Angel groups, engage key opinion leaders (KOL) within the group. No is not no. Once a KOL within the Angel group writes a check, the others tend to follow. Be responsive to due diligence, be persistent and get the close!
The lessons learned on my journey from scientist to CEO do not only apply to Angel investors. They apply to all business plans and fund-raising activities. My Angel investors really kicked the tires on my commercial aspirations in a way that Angels are uniquely qualified to do, as experienced businesspersons absent the bias of life science therapeutic development.
Dr. Lillian Chiang, MBA, PhD is a serial entrepreneur. She has built from scratch state-of-the-art technologies, drug discovery teams, and business plans, at public and private companies, venture and private equity funded, including Millennium Pharmaceuticals, Purdue Pharma, Aestus Therapeutics, and Kadmon Corporation. Lillian is currently CEO and Co-Founder of Evrys Bio, a biotech developing Next Gen Antivirals that engage the cell’s own immunity to naturally defend against viral infection without the emergence of drug resistance. Evrys products will transform medical practice by offering treatment options effective against most if not all viruses capable of causing a given infectious-disease condition. For example, Evrys is developing a single therapy to treat influenza-like illness that can be caused by many different respiratory viruses, including influenza, parainfluenza, coronaviruses, and adenoviruses, as opposed to a vaccine directed against only one virus-type, such as SARS-CoV-2 (one of many coronaviruses).