Healthcare: Secrets from Insiders
2013 was a banner year for the Life Sciences industry. With 46 U.S. biotech firms pricing IPOs, the best in 13 years, and robust M&A activity (14 VC-backed exits with values >$100M - highest number in a decade), most would agree it was a special year. However, the picture was not as rosy for private early-stage healthcare companies seeking to raise capital from institutional investors. With more than 80% of venture capitalists not interested in early-stage investing and the proliferation of “syndication,” the market environment for raising capital has been very challenging for private companies. Learn more about the outlook for early-stage healthcare companies by downloading information supplied by HealthiosXchange, the premier healthcare Crowdfinance portal, and Harvard Business School, as part of a recent panel discussion in Cambridge: Crowdfunding Healthcare: Secrets from Insiders
With the advent of advances in social media (~Twitter, Linkedin) and groundbreaking legislation (~JOBS Act), innovative financing vehicles are now available to assist early-stage healthcare companies with raising capital from Accredited investors including "Investor Syndicates."
Leading Crowdfunding portals, AngelList, https://angel.co/syndicates and HealthiosXchange, http://www.healthiosxchange.com/ recently launched investor syndicate platforms. HealthiosXchange's investor syndicate platform (The Champion's Program), sponsors a personal investment fund – seeded by the Champion’s résumé – around which HealthiosXchange will raise matching funds through the participation of Friends, Followers and like-minded investors. The Champion fund then invests directly in a Company (or series of Companies).
Benefits of Syndicating Deals for Lead Investors
Enhance Leadership Profile, Professional Opportunities – Leadership of personal, branded investment funds resulting in potential profesional oportunties
Expanded Access to Capital - Secure larger amounts of capital from personal networks and H/X members giving access to more deals including those requiring higher investment minimums
Online Investment Funds – Leverage H/X and earn up to 15% carry from “Backers” in syndicates (H/X creates and administrates Champion Funds, recruits co-investors, establishes regular and transparent reporting)
Avenue for securing pro rata terms – Allows Lead investors to continue putting money into a company in order to maintain their existing % even as the company raises new funding at higher valuations