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"Make sure to attract investors who listen to you. The best investors are experts in their field, but they are also aware of what they do not know."
Published: 28 May 2024
Text: Anne-Marie Korseberg Stokke
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As an entrepreneur, it can be tempting to say yes to everything and everyone offering you financing. But think twice before entering a partnership with someone who cannot add value to the company in terms of expertise, is the message from Pekka Simula from Innovestor.
"In most cases, as the owner, you know what's best for the company, so make sure to attract investors who listen to you. The best investors are experts in their field, but they are also aware of what they do not know," says Simula.
He recently spoke at The Life Science Cluster's 5th Norwegian Life Science Investor Partnering Day at Oslo Science Park, in front of a full audience of entrepreneurs, investors, and others from the health and life science ecosystem. He kicked off with three pieces of advice for those seeking investors:
1. Even the best investor in the world is not a master in everything.
2. The best investors know what they know (and typically don’t invest beyond it).
3. Find an investor that complements your team's expertise; and do your due diligence on them, while they do their DD on you!
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Pekka Simula recently spoke at The Life Science Cluster's 5th Norwegian Life Science Investor Partnering Day at Oslo Science Park.
Finnish Pekka Simula is a Partner at Innovestor Life Science and has over 20 years of experience in the health and life sciences industry, including as founder and CEO of Oncos Therapeutics, and CEO of Herantis Pharma, which went public in 2014. The Innovestor Life Science Fund is €90 million and invests in companies from pre-seed to Series A. They prefer to collaborate with other specialist investors, he explains.
"We want to invest in teams who know what they know, together with investors who know what they know. We invest in both therapeutics and digital health, and the solutions the company offers should directly impact the diagnosis, treatment, or management of patients or the discovery and development of new diagnostic or treatment options."
Simula emphasizes the importance of the business model when evaluating companies.
"Some companies in the discovery stage have a business model focused on selling services to the pharmaceutical industry, which can be a profitable business but may not align with the venture capital firm's goal of seeking high returns on investment.”
Having the same goals and being compatible are important in a partnership. He therefore has some practical advice for companies seeking an investor:
1. Define your business model.
2. Know your expertise gaps.
3. Determine if you want to navigate solo or together.
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Companies and investors had the opportunity to get to know each other, both inside and outside the meeting rooms, at The Life Science Cluster's 5th Norwegian Life Science Investor Partnering Day in Forskningsparken.
"We want to invest in teams who know what they know, together with investors who know what they know."
Pekka Simula"If you want an investor you can navigate with, it's important to find out if you get along, even in difficult times. To get there, you need to understand the investor's expertise and preferred role. And most importantly, do you have the same long-term goal?"
Companies in the health and life sciences sector take a long time to develop, often longer than initially thought, and Simula concludes by comparing the relationship between a company and an investor to a marriage:
"You have to look beyond the honeymoon phase and think that this is something you want to be involved in for a long time. Then you need to be able to work together and hopefully also enjoy it!"
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