Angels in MedCity is a partnership between MedCity, London Business Angels and Angels4LifeSciences. The programme aims to introduce new and existing business angels to investment opportunities from healthcare and life science companies. Read on to find out more about the initiative in today’s guest blog from Will West, CellCentric and Simon Kerry, Karus Therapeutics.
As highlighted at the recent BIA UK Bioscience Forum, the investment ecosystem has matured in recent years, with a wider range of different types of investor funding opportunities available to the biotech sector. This includes the rise of Angel investment in healthcare, where we are starting to see some real success stories of life science companies that are raising significant early-stage and growth capital from UK-based high net worth individuals.
The UK government has long recognised the potential of Angel investment and has created highly attractive tax incentives, particularly through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), where profits can avoid Capital Gains, and if things don’t go so well, up to 70% of losses (100% in the case of SEIS) can be offset against your tax bill.
MedCity has taken the leading role in building a dedicated life-science Angel investment community through the Angels in MedCity (AiMC) initiative. Working in partnership with London Business Angels and Angels 4 Life Sciences, six pitching events have been held at various venues in London over the last 18 months, with 37 UK-based life-science companies presenting. Around half of these have secured funding, over £10m in total. These include Desktop Genetics, StepJockey and Jellagen.
Critical to the success of AiMC has been the quality of companies that have been selected to pitch. This has been ensured by: (1) having strong competition with events typically over-subscribed 4-fold; (2) a clear screening process of companies’ plans, resources and teams; and, (3) an assessment of whether the investment needs of the company, both in the short and long term, are angel appropriate. To ensure the best opportunities are identified from wherever they might be based, pitching is open to companies from across the UK.
Importantly, AiMC has been able to reach out to Angels that are new to life-science investment. AiMC brings these new certified High Net Worths together with those experienced in biotech investment. This has been strongly helped with investor training sessions that have been run in parallel to the pitching events themselves. These have seen over 300 people attend.
Learning from other organisations and listening to feedback from the community, MedCity and its partners have ensured that the process is as open as possible to all participants. This is a non-profit exercise, with a mission to minimise the burden on both companies and investors, and maximising the opportunities to both.
There used to be a view that biotech opportunities were too risky, complex or too long term for Angels. The emergence of newer healthcare technologies, particularly in medtech, tools and services, have offset this, not requiring the capital investment or time of a classic drug discovery play. For additional follow on funding, contrary to expectations, Angels can sit alongside other types of investor. Angel-funded businesses have subsequently obtained VC investment (Karus Therapeutics) or even gone forward to IPO (Horizon Discovery). Of interest will be the rise of investment platforms, such as Syndicate Room, and how these sit alongside Angels and other types of investment in biotech.
The barrier to starting a biotech company is as low as it has ever been. Technology transfer organisations have matured, there is more inherent expertise in the community as a whole, and the Government is supportive. The growth of the Angel sector is highly additive to this. The next challenge is ensuring more company scale up.
The next AiMC event is on 10th November 2016. For information on this and future events, both pitchers and punters should visit: http://www.angelsinmedcity.org.uk/
Follow AiMC on Twitter at @AngelsInMedCity