Nordic Life Science 1
The biggest challenge for Nordic life science sta
rtups and companies is access to capital, according to Stephan Christgau, PhD, one of the founding partners at Eir Ventures, a life sciences venture capital fund located in Sweden and Denmark. “A TYPICAL MISTAKE IS THAT PEOPLE CUT CORNERS. IF YOU DON’T “There are very few professional life science investors in the Nordics. It’s really only a handful. Institutional investors here in the Nordics are maybe less aware of the opportunities in life science,” he says. “In other regions, particular in the US, generalist investors are more open to the sector, they see it as a natural thing to allocate some of their funds to venture investments and also venture in life science. If you look at the European investment fund, they probably invested in close to all venture funds here in Europe and life science is one of the best performing sectors. They have achieved a 14.5 % return per year over a ten-year period on average. So even though the Nordics obviously is a wealthy region with a lot of funds, very little of those funds are allocated to the professional life science investors in the area.” So which is the best way to go when it comes to financing? “A good entrepreneur will work on many things, and fortunately there are private investors. Professional investors don’t need to be Nordic, so a Nordic company can easily approach other investors from Europe and even the US. In Scandinavia there are also more than 20 incubators where some sort of funding is available. There are also funding possibilities from various national government grant agencies and the EU,” says Stephan. Network and make time for long term strategy Another important key factor when growing a company is finding the right competence. Stephan Christgau advises companies to make sure to hire someone that is complementary and brings other competences, other viewpoints and backgrounds to the small team. However, managementcapable people with expertise are hard to come by. “Build a network and engage with the people in your network, find out who they know. Take part in industry conferences and events, reach out in that way,” advises Stephan. aving a network is also key when establishing partnerships and collaborations. A small biotech engaging with a big pharma could take many shapes and forms. This could be research collaboration, option agreements, outright licenses or sale of the entire company. “Be mindful of what the consequences are when you engage with a big pharma partner so that the pharma partner doesn’t get all the upside, i.e., all the rights to the products and so on,” says Stephan. “Think about the situations where the big pharma partner may change their priorities or internal strategy and terminate an agreement. Try to anticipate such scenarios and seek to keep options open.” HAVE THE MONEY, DON’T DO IT BY HALF. DO WHAT YOU CAN. IF YOU DON’T, IT CAN COME BACK TO HAUNT YOU.” STEPHAN CHRISTGAU, EIR VENTURES f you are a first time entrepreneur, try to seek advice and guidance from other people and be aware of what you do know and what you don’t know, and then think through the strategy, continues Stephan. “When you are a one-man army, it’s very easy to be completely in the day-to-day operations, the details and experiments, and you don’t allocate enough time to think strategically. You have to be able to do that once in a while. Where are we actually going? What are the goals? What are the critical things to do to reach those goals? Maybe I’m spending my time on things that are completely not critical. The ability to see long term goals is very important, that differentiates the accomplished entrepreneurs from the ones who struggle a bit more.” Also, spend time making a good plan, not a 100 pages business plan, but a plan on how you see the development of your company and your strategic goals, how that ties into the operational plan you have, says Stephan. “Very often I see companies with half-baked plans and they sort of do not really align strategy with planning, these become individual activities. Sometimes it’s not possible to fund everything straight away, then it’s important to have a long term plan and prioritize,” says Stephan. “A typical mistake is that people cut corners. If you don’t have the money, don’t do it by half. Do what you can. If you don’t, it can come back to haunt you.” When should you plan exit-strategies? “For all investors, we invest ultimately for financial return. It’s sort of an integral part of this and it’s always time to think about the exit. So even if you are an early stage university spin-out, have an idea about this. What are the relevant benchmarks you can provide to illustrate that there is a return potential. Be aware that all investors, especially professional investors, are very focused on this,” says Stephan.