As Silicon Valley Bank start their second year of partnership with OneStart, banker, investor and OneStart mentor Nooman Haque talks about how new entrepreneurs can maximize their chances of success.
Nooman gives the Oxbridge Biotech Roundtable’s (OBR) Jess Sutcliffe the low-down on how he came to be an investor and financier (1), how to give a great pitch (2), why Silicon Valley Bank is excited to be a part of the OneStart program (3), and how Silicon Valley Bank supports OneStart applicants (8). Having worked with a lot of early-stage companies, Nooman shares his wisdom on the cycles that companies go through as they establish a team (4), and the importance of doing your homework before approaching investors (7). He also gives some invaluable advice on how to access funding from a wide range of sources (5), and whilst he cautions that OneStart entrepreneurs should steer well clear of debt (6), suggests that taking an early risk with your career can give you experiences that set you up for life (9).
Read on for the full interview digest, listen to the full podcast here, or click the links above or below to access the answers you need for your own career journey.
JS: Can you tell us about yourself? How did you get to the position you are in today?
Listen to the full answer here (1)
NH: It certainly wasn’t a linear path. I started as an academic in London, but found that I was interested in a broad range of subjects. I was a consultant for investment funds and large pharma. I became a financier managing sovereign wealth from the Middle East, and managed a fund in Saudi Arabia investing in global healthcare technology. I knew about SVB [Silicon Valley Bank] and felt it would give me the chance to engage with companies directly, especially with those early stage companies, where, because scientific progress is not always smooth, they can do with all the help and support they can get. The SVB approach very much fits in with why we are involved with OneStart.
JS: What advice would you give individuals who have a fantastic idea and are looking to pursue healthcare entrepreneurship?
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NH: We see a lot of pitches at SVB. A key thing to focus on is getting the team right. Entrepreneurship is not a one person endeavour. A lot of investors know that it’s a long haul, and it’s really not the number of PhDs that you have between you but the team dynamic that will determine success or failure. Investors will look at the team, and whether it’s fit for purpose - whether you’ve got the skills you need to do what you want to do. The second thing is to have a very clear idea of the opportunity that you’re going for. Investors have limited time and very much want to understand what problem it is you’re trying to solve and what the opportunity is for them.
“It’s really not the number of PhDs that you have between you but the team dynamic that will determine success or failure”
JS: Can you tell me more about the value that SVB sees in partnering with OBR and OneStart?
Listen to the full answer here (3)
NH: It really speaks to our core values and history as a bank. When we started over 30 years ago we were very much built around servicing the needs of very early stage companies, and we still see the value in this. It’s really about keeping an eye on innovation. It really helps our later stage companies to understand what is up and coming; it allows us to leverage our global network to help these small companies and also it’s quite simply really fun and enjoyable! Personally, I really value the challenge and exposure of working with highly skilled, dynamic and volatile entrepreneurial companies who are working at the cutting edge of science. Although you see the same problems again and again it’s like a nursery school teacher, you never lose the enthusiasm for trying to help these individuals build the big companies of the future.
“I really value the challenge and exposure of working with highly skilled, dynamic and volatile entrepreneurial companies who are working at the cutting edge of science.”
JS: Can you elaborate on the support SVB gives to applicants in the OneStart program?
Listen to the full answer here (8)
NH: Individuals from SVB provide mentorship to the semi-finalists, so we’re always happy to give our time. We have 40 life science specific bankers who can give advice. Some entrants may have an eventual US focus, where we can tap into our network of bankers, but also our client base of large and small companies who can be extremely helpful in guiding these companies on their journey. Really the value is in having a good track record in life sciences, having seen a lot of companies come through and the challenges they face, we can make effective and value-adding introductions.
JS: How have you found the experience of being a mentor to OneStart’s early-stage companies? Do you see any particular areas of growth over the program?
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NH: One of the most satisfying things is seeing the teams gel and work out what their roles are. Invariably you have a pattern of someone having the initial idea who needs more assistance. All teams go through a cycle of initial uncertainty when they are working out who is going to do what, when there are a lot of ownership issues. When you see it all click into place the pitches get more refined, they get more clarity over what they want to do as a team and what they can bring to that as individuals. The role that we play in this process, directing and critiquing, is really enjoyable: essentially you’re helping to mould and create better entrepreneurs.
JS: At the moment many of our applicants may be solely focusing upon or perhaps are only aware of non-dilutive funding sources, such as grants or government assisted schemes. Can you give a quick overview of some of the other sources of funding for start-ups?
Listen to the full answer here (5)
NH: Happy to. Firstly I’d really stress the government grants. There are quite a range available, and I ALWAYS urge companies to take as much free money as possible and not give away equity until they really have to. But when you have a commercial opportunity you do need more risk capital. Most companies go through a cycle of moving from government grants into angel money, which is essentially risk capital, but via individuals, either directly or through some kind of intermediary. This can either be highly organised groups, or personal benefactors who may have come from the sector.
Another overlooked source of money are charities, e.g. Cancer Research makes seed investments. Channelling patient groups can also be very valuable, maybe for funding, but also for product development as advocates or critics, as they will be most in touch with any alternative remedies for their illness.
Then venture capital (VC) is an obvious source. Specialists in the field tend to be quite supportive and flexible about how they deploy the money. What I try and tell companies is that regardless of the source and type of money that you’re going for, you really are forming a relationship with the providers of your capital, and they have their own motives for making their investments. It’s very important to try and do as much work as possible to understand the incentives of the investors that you’re approaching. It’s actually especially important with VCs, who can act quite differently - some invest early, some late, some kill projects quickly if they’re not working, some are more patient, it’s really important to understand the personalities and culture behind the sources of capital. Then there’s always partnership with pharma, and follow-on funding from public markets.
JS: Can you give us any advice about how to approach investors?
Listen to the full answer here (7)
NH: Most are quite open on their website about who the teams are and the deals they’ve done. Good research and preparation is key. It’s incumbent on the teams to do the digging, look at the performance of those firms; use LinkedIn to look at the partners and see what they’re interested in. Your pitch should be specific for each investor. And use the OneStart mentors; a lot of them will be CEOs and executives who’ve received funding from the people the OneStart entrants will be approaching themselves.
JS: What about debt? What is and isn’t OK when looking to borrow finance?
Listen to the full answer here (6)
NH: I think it’s quite simple- companies at this stage, pre-VC capital, shouldn’t really be looking at it. It may seem attractive, but unless you have risk capital which can sustain you over bumpy times you shouldn’t really be looking at debt in any form.
JS: Finally, what’s the one piece of advice you wish someone had given you about your career when you were fresh out of university?
Listen to the full answer here (9)
NH: I wish that someone had said that early on in your career it doesn’t matter - take some risks, develop yourself. When we’re looking to bring people into SVB, of course we want bright people from the best universities, but we’re really looking for people with something different about them - they took a chance, an opportunity. That’s one of the great things about OneStart as well, it takes people who are typically on an academic career path and says ‘just give it a go’. Even if the company doesn’t progress, what you will have learnt is so valuable that you can take it back into the career you had formally. What may have seemed like a failure, in the long term really doesn’t matter and is a valuable learning experience, so just take some risk.