L19 Communication Flashcards
What is the “Code of Best Practice for Reporting by Life Science Companies” and why was it developed?
The Code (second edition, 2013) aims to support directors and management of Australian ASX-listed life science companies to adopt international best practice in reporting events to investors. It promotes investor confidence by helping directors balance confidentiality and continuous disclosure and includes educational support for clinical trials.
Biotechs need to pitch to VCs. Explain this statement and describe some dos and don’ts of pitching
see onenote slides
Why communicate?
- persuade
- provide info
- seek info
- express emotion
- to warn
- to reassure
- to change behaviour
- to deceive
- to celebrate
What is communication?
exchanging your message with other people clearly and unambiguously
What is exchanged and how?
Exchange
- info
- ideas
- thoughts
- feelings
- emotions
Through
- speech
- signals
- writing
- behaviour
The process of communication
see onenote diagram
Cycle of:
- sender
- message
- channel
- receiver
- feedback
- channel
noise barrier
The 5 Ws and a H
see onenote
- who
- what
- where
- why
- when
- how
Are you a good communicator - Johari’s window
see onenote
- open self
- blind self
- hidden self
- unknown self
The Basic Biotech Strategy + communication
see onenote diagram
Attract investment into IP to develop it
Communicate business plans successfully to attract investors
Business plans are a key communication document
see onenote
- internal - board
- external - investors
- figuring out what you’re doing
Communicating with VCs
see onenote diagram
Startups are eager to grow but need to compete for capital in order to get past the valley of death, a period of high company mortality
VC fund is profitable when…
see onenote diagramm
when its best investment is worth more than the rest of the fund combined
The VC Process
see onenote diagram and side notes
- first contact
- first meeting - CDA
- Business plan - diligence
- term sheet
- formal diligence
- funding - shareholder agreement
- exit
VC activity in Australia
see onenote table
VCs meet with lots of companies but only roughly 1/10 of these meetings proceed to due diligence. Very few of these get funded.
The VC traffic light
Stack 1 - must fund (~1%)
Stack 2 - might fund (~10%)
Stack 3 - Forget it (the rest)
to get into stack 1, you must convince the VC that you can:
- make the VC money
- make them more money than any other company or project
Pitching - the basics
see onenote
- the sound bite
- describe the business in 8 words or fewer - the elevator pitch
- 2-3 minutes, financing requirements, action points for follow-up by VC - extended pitch
- 10-20 minutes. Key points including products/tech, management team, business model, financing requirements, action points for follow-up by VC
Don’t tell the science story
see onenote
Always start with the market - what’s the market opportunity, don’t start with the science
- VCs need to see the market opportunity, after that you can start with why your science is better than someone else’s science
Pitching - dos and don’ts
see onenote
The delivery
see onenote
- plan
- prepare
- practice
- deliver
- interpret
The follow-up
- collect business cards (names and contact details)
- leave your pitch pack
- take notes (ask a colleague and they can take that role)
- if you promised to do/provide anything, make sure you do it
- follow up with the organiser
- if appropriate, arrange a next meeting
ASX - false market rules
- has strict rules around disclosing info likely to create a false market
- listing rule 3.1 says that companies must disclose immediately any info that a reasonable person would expect to have a material effect on its share price
Why the need for a code?
- scientific research is intellectually complex
- regulation, laws, IP legislation etc is also complex and changing
- hard for outsiders to assess what aspects of a biotech company are key drivers of value
- easy to get the message wrong
What is material?
see onenote slides and side notes
- companies must disclose material info
- companies should not disclose information that is not material
- materiality is decided on a case-by-case basis
Summary
- communication is a two-way process and a skill that must be practices
- biotech companies develop pitches to attract investors. A good pitch is science-based but market-led and is the product of good competitive intelligence
- legal requirements govern the communications of publicly listed biotech companies
- the Code of Best Practice describes the test of materiality
