In the wake of Eagle’s successful fund-raising, I was kindly invited to speak on a panel for Scottish life-science entrepreneurs in Edinburgh as part of a two-day master-class organised by Eagle’s good friends at BioLauncher. As ever, it was lovely to be in Edinburgh, which has all the advantages of being a capital, yet is not an overgrown metropolis. That the sun shone and a venue in the Old Town further lightened my step as I strode down Cowgate into Grassmarket, where a superb hat-shop (a rare sight these days) and a sign proclaiming “Deep fried Mars bars £2.50” in the next-door window both caught my eye. I quickly browsed the hats, but resisted the traditional Scottish fare and arrived in time to sit in the audience for excellent sessions on Term Sheets, Cap tables, dilution and the like, before ascended the scaffold for the panel.
My fellow panellists had a wealth of experience to draw on and I learned a lot from them and, as is often the case, there were lots of interesting questions from the audience that gave pause for thought. The most penetrating was probably the simplest on the surface: “How did you find your investors?”
The immediate answer would be along the lines of talking to lots, and lots, of potential investors and some of them eventually see the good fit and put their hands in their pockets and pull out cheque books. Okay, so how did you know who to talk to? Well, through contacts, friends, recommendations, e-mail solicitations – both in- and out-bound. It then it occurred to me to think through who actually invested and how exactly they got to know about Eagle. The results were a little surprising.
It transpired that of the 18 investors, only one previously knew Eagle to any significant extent. Indeed, most had no previous knowledge of the company. It then became obvious that it wasn’t first contacts that provided most of the money, rather it was their contacts. The biggest chunk effectively came through contacts of our landlord here at Babraham, who invited Eagle to pitch at their annual Bioinvestment Forum, which led to us meeting Midven (VC), who became our cornerstone investor. All the other funding came from business angels. Some local to Cambridge (Cambridge Angels and Cambridge Capital Group, who led to Eagle being placed on crowd funding site, Syndicate Room) -- through Eagle’s well-connected Chairman -- and others from London and beyond (London Business Angels), via an introduction from a local CEO, who knows Eagle well, having provided us with insightful marketing advice over the years. Some of those who committed early then encouraged others to invest – and so new friends brought their friends to the party.
A modern interpretation of an ancient maxim is to “Keep your friends close and your enemies, even closer”. For fund raising, in light of Eagle’s experience, I’d thus modify this somewhat to, “Keep your friends close and your friends’ friends, even closer”.