Yuval Binur, Accelerated Technologies Partners, United States http://www.aal-invest.eu/page/speaker-profiles-yuval-binur

1. Financing Companies In The
New Environment –
Challenges and Opportunities
A General View with applications to Assisted
Living

2. What is going on in
the World?
A Personal, Somewhat
Click to edit Master subtitle style Pessimistic
Observation by
Yuval Binur, Ph.D.
Accelerated Technologies Partners

3. Innovations – The Key to
our Business.
Successful Innovations require:
• Entrepreneurial spirit and culture: allow risk
taking
• Industrial and academic infrastructure:
provide trained management and research
support
• Understanding market unmet needs: ensure
the right product solutions
• Active and growing local capital market:
provide the FUEL that move the innovation
vehicle to success

4. Let’s focus on the Fuel…
What has changed that affects our
ability to raise capital for medical
companies?
and what opportunities arise?

5. These are the main factors that
have changed and affect our ability
to finance companies:
• The depressed world economy
• Shifting global markets
• Health care reform (US) and similar
global H/C system problems
• The changes in H/C unmet needs
• The state of large corporations
• The failure of the VC model

6. Thunderstorms over the world’s
economy – how long they will last?
they will last?
DJIA
2010
“Today, the only trades that can make some money to
investors last on the average 11 minutes from buy to
sell...”
SJP, a NY investment banker

7. Wow! my family owes
$174,132.24 to
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 05 Sep 2010 at 08:52:07 PM GMT is:
The estimated population of the United States is
309,059,262
so each citizen's share of this debt is
$43,533.06.
The National Debt has continued to increase an
average of
$4.14 billion per day since September 28, 2007!

8. Shifting Global Markets
”Empires don’t lose power overnight ,they
fade away”… and markets follow

9. We have been slow to recognize the
emerging new world order:
Our maps still place the Atlantic in
the center…

10. Unmet Needs and H/C reform
• Remaining unmet clinical needs that
can be addressed by current
technologies are few and difficult
• The #1 killer in the developed world
is being shifted from CV to Cancer,
followed by Obesity/Diabetes
• A new family of unmet needs surfaced:
Cost-cutting therapies to replace more
expensive ones

11. Regulatory processes are becoming
more difficult and costly
• The US becomes more
restrictive – they operate from fear
• Costs of meeting regulatory
requirements are skyrocketing
• We as an industry need to
understand better the regulatory
processes in the emerging markets

12. The State of Large Corporations:
• With disappearing IPO markets,
corporations are the only exit to full
liquidity
• Organic R&D is largely dead despite huge
mergers in the pharma industry
• However, to be attractive for acquisition,
strong IP, proof of concept, advanced
clinical data and in many cases revenues are
required.

13. Now we come to the core:
The failure of the current VC model:
the venture capital model was developed in
the late ‘50s and was based on a
supercharged IPO market fueled by the
emergence of new technologies.
…”Just place your BP and shake the money tree…”
Business plan

14. “My portfolio of venture funds is mostly
under water, depends only how deep.
They all live on oxygen that is diminishing in
their tanks…”
A large institutional manager
Lacking IPO exits, most of the VC funds cannot show returns
that compensate for the risk taken by the institutional
investors

15. So what do the VCs do?
• To address lack of returns, venture
capitalists selected a strategy of :
“Invest only in late stage companies”
But
With no flow of early stage there will
be no late stage companies for them to
invest in…

16. A few of the pitfalls of the VC
Industry:
• In today’s changing world, it takes
$80m to $200m from inception to
commercialization of a medical product
• These sums are beyond the typical VC
capabilities – their answer is syndication
• Syndications create boards of directors
with conflicting interests, usually all
VCs
In the last 5 years, incompetent boards
killed more companies than failed
technologies

17. So what do we do?

18. Optimists, Pessimists
Let’s be
realists…

19. What can we do? A laundry list for
financing medical companies today
(a) Before starting a Company:
• Focus on unmet needs rather than on
technology
• Plan a long term budget to cash
break-even point
• Talk to the regulatory and
reimbursement advisors to get ideas
as to what the barriers are
• Review IP and FtO carefully

20. Assisted Living and Market
opportunities
• Define the unmet needs
• Identify technologies that can address
the unmet need
• Example: IT in Assist Living
• Build a business model – it is all about
return on investments

21. Ageing and ICT
Social
• • 80+ population: doubles until 2050
• • 60+ population: from 20% in 1995 to 25% in 2020
• • 50+ population: 21% has severe vision/hearing/dexterity problems
• • Today 4 working for 1 retired, in 2050 only 2 working for 1 retired
• • Cost of pensions/health/long-term care: up by 4-8 % of GDP (2025)
• • Shortfall of care staff
Economy
• • Wealth and revenues in Europe of persons over 65 is over 3000 B€
• • Smart homes market will triple between 2005 and 2020
• • Early patient discharge by tele-health: reduced cost of 1,5 B€ p.a.
(DE)
• • Tele-care technology at home: Empowerment of elderly and efficiency

22. What can we do? A laundry list for
financing medical companies today (II)
(b) Preparing to raise funds:
• Remember that the value is in the equity – try to
keep as much of it as long as possible
• Do thorough DD on your funding sources as much
as they do on your business
• Think out of the box on funding sources – do not
rush to the VC community:
– Angles (covered by my colleague in this
conference
– Grants and government support (NIH, EU)
– Early corporate money
– Friends and family
– New World money

23. What can we do? A laundry list for
financing medical companies today (III)
• Establish relations with the BD guys in the
relevant corporations
• Maintain control within the Board, either
through majority or through protective
provisions in the investment agreement
• Plan exit on day one based on M&A, not
IPO.
• Build and maintain a capital efficient
company

24. In Summary:
Be realistic Be focused
Be flexible Be resilient
Think out of the box

25. The old fashioned way is gone:
No more Vikings to conquer the world
No more smokestack industries
Old fashioned VC is not optimal any longer

26. It is all about people…
“…with the world becoming this flat – with so
many distributed tools of innovation
empowering individuals to compete, connect
and collaborate, the most important
competition is between you and your
imagination...” – Tom Friedman

27. As a final note -
I am a realist:
♥I recognize the trends ahead
♥I believe in people’s abilities
♥I believe that crisis brings opportunities
♥I believe in early stage innovative ideas
that can grow to impact how we live
♥ I look every morning in the mirror and try
to see the reality

28. THANK YOU
TACK