Investment Criteria

General Guidance for Applicants

Please consider the guidelines below when preparing materials to present to MABA. Although these guidelines are not intended to be proscriptive, greater adherence to principles outlined here will increase the likelihood of garnering interest from our members.

Strength of Management Team

The qualifications of the management team to lead the company to a successful exit should be clearly described.  In the event that the management team is not yet fully assembled, you should be able to articulate current knowledge and/or experience gaps and explain how those gaps will be filled if funding is obtained.  A clear, and well considered plan for meeting critical staffing requirements will be viewed favorably.

Products/Business Areas

We invest in life science companies with strong scientific merit and supportive data.   Therapeutics, devices, diagnostics and digital health are primary areas of interest.  Your application should describe your final product (or a mature prototype) and should include compelling evidence of the product’s utility.

Patents/ Intellectual Property

Your innovation should be sufficiently novel to support at least one defensible patent or submitted patent application.  If your product or platform is being developed under the terms of a licensing agreement, then those terms should be fully disclosed.

Market

Companies most likely to generate interest among our members are those that can plausibly demonstrate clear unmet market need or compelling competitive advantage. The total addressable market should be sufficient to support significant return to investors in the current round.  Assumptions regarding market penetration, unit pricing, etc. should be articulated.  External validation of these assumptions from end users and payers will be viewed positively.

Exit Plan

Your application should include a clear description of your exit plan, including the milestones required to plausibly achieve an exit and its projected timing.  A thoughtfully constructed list of potential acquirers, comparable acquisitions made in the target market previously, and the valuations of these prior acquisitions is particularly helpful. As a guideline, we are looking for a credible potential return to investors of at least 10X in ~5 years.

Valuation and Investment Size

Typical life science angel investment rounds are between $250,000 to $1 million per angel group, and possibly as high as $5,000,000 in a syndicated round, where multiple angel groups invest together. While, in general, we look for companies with pre-money valuations of $10 million or less, we are also interested in transactions with companies having higher valuations if there is a realistic prospect of a liquidity event in the near future.  If your company requires a significant amount of additional capital (e.g., more than $10M) to get to a plausible liquidity event, we will likely not be able to supply all of it. Therefore, you should have a realistic plan for raising the follow-on capital and a strategy for protecting early investors from dilution. The intended use of funds generated from the current round should be clearly articulated.

Structure

Although equity investments are preferred, we will consider investing in a convertible note structure provided that the note includes some combination of interest, discount from the first priced round and/or warrants to compensate our members for assuming the additional risk.  Revenue sharing models may also be considered for companies that have demonstrated strong market demand (validated by current sales), but for which the timing of exit through acquisition or entry into public markets remains uncertain.

Submission Materials

In addition to the completed application, you may provide appropriately titled additional supporting documents if you feel these documents will significantly clarify the business opportunity.  Executive summaries should not exceed three pages.  We prefer business plans in PowerPoint format.