Value Add

As any entrepreneur will tell you, finding potential investors is not the problem. It can be difficult to get access to the right people, and certainly there are investors relevant to your market who are not located conveniently on your doorstep, but the issue is closing the deal, not opening the dialogue.

That’s where our involvement changes the game.

Venture capital, corporate and private investment is actually a relationship business, not a financial services activity.Our key skill derives from our assessment of motive, rather than a financial services advisory input, on both sides of the transaction.

Relationships driven by motive

Given an understanding of motive, Team Kapital can contribute usefully in the negotiation process. It is not our style to simply make an introduction and to leave the prospective parties to follow through. Instead we work closely with both sides, throughout the due diligence and negotiation process, and ensure that motives are satisfied, communication is effective, and deal-breaking misconceptions are swept aside. We also have the experience required to suggest solutions to the inevitable issues that crop up along the way.
In marketing speak, we provide an additional channel of communication between investor and company throughout the process. In practice this means detailed briefing and debriefing at each stage, engaging both sides. The result is an increased success rate of negotiations, ensuring that those potential investor discussions are converted in to money in the bank.

But is it fundable?

Our second key contribution is in assessment and, if necessary, adjustment of the business plan to a form that is fundable. What was fundable for a seed round is seldom appropriate for the Series A and growth rounds that follow. We only work with a small number of clients at any one time because we work very closely with our chosen few.

Proof of concept

We are currently working with CompanDX, the commercialization vehicle for the van Geest Cancer Centre, developing a bio-informatics project. We engaged with the management team and Board and have led a very significant development of the business model, based on our knowledge of the market. This new model has been adopted by the Board and Team Kapital has been retained to help execute the plan, as well as raising the necessary finance along the way. But that is not all: unfortunately the CompanDX CEO has been forced by illness to step back from the business and we have been asked by the investors to step in. Simon Haworth is now providing CEO support, engaging with Chinese investors as we embark on development of six CompanDX products in China. These are extraordinary times for CompanDX and we have raised approximately £4m of non-dilutive funding for the company to date.

We have learned from our CompanDX experience and, working with Dave Tapolczay, have created Dynasty Biotechnology on the GSK Science Park site in Stevenage UK. Dynasty partners with UK biotech to develop technology for commercialisation – first in China and then in the Rest of World. Uniquely our input is financed by Chinese non-dilutive funding and Dynasty Biotechnology is creating an important two-way bridge for Chinese biotech and pharma, attracting Inbound Chinese companies to the UK in preference to other European locations and facilitating China access for UK biotechnology knowledge.

NEXT: Exit Strategy…