BioWorld Today Columnist
In these challenging times, entrepreneurs are fighting to be heard by investors who are terrified they might make a wrong choice with their money.
Execs struggle to figure out the choice buzzwords that will soothe the fevered VC brow and loosen those purse strings. They long for the old days when throwing in a few "paradigm shifts" and "accelerated commercializations" would clinch the deal.
CEOs today complain about spending hours in meetings and on the phone answering the same questions over and over - it's clear they cannot come up with the phrases that will bring comfort to the investors.
The last Biotech Business Buzzword Compiler (BBBC, courtesy of Dr. Vin Miles) was published in the mid-1990s. It needed updating.
In the interests of providing customer service, your BioWorld Today columnist has spent her summer tracking down the magic words that investors (apparently) long to hear!
Yes, you too can amaze your friends and relatives by sounding like a top-notch entrepreneur, striding purposefully around Sand Hill Road and Boston, hitting up those venture capitalists for tens of millions. Heck, you might even rope in a private equity fund or hedge fund investor with these witty wordings.
Simply choose one word - any word - from each column below to generate a highly meaningful phrase. Close observers will note that some of the words have such versatility that they can be used in all three columns. However, I suggest that you use the powerful words only once per sentence. In the case of "incentivize," I strongly urge that you use this word only once per month to avoid overpowering your audience.
Finally, I have compiled a list of phrases that should be dropped from your road-show vocabulary immediately! They are the verbal equivalent of wearing banker's suspenders to a venture meeting.
Phrase Book: More Explanation Needed
My research revealed that several key phrases generated a Pavlovian response in potential investors.
A warning: Only a true "Zen master" (a buzz phrase that sprang into being right in front of my eyes at an Economist conference) can use these in a predictable way. Novices may generate the roadshow equivalent of a failed Phase III trial.
• Cash Conservation Plan - a survival plan, as in "Our drug failed, the investors won't pony up any more, and we need to buy time to find someone to buy us."
• General Markush - this has nothing to do with Russian generals, but rather refers to a method of representing many related chemical structures with a single drawing, usually for patents. "We think, by looking at the general markush, that this group of compounds can be pursued with little chance of patent infringement." Just rolls off the tongue.
• Skin in the game - creating a gruesome mental image, it means giving management the opportunity to lose big-time if the investors lose.
• Two-bagger - "if those data are as good as we hope, the stock might be a two- or three-bagger." Sadly, the data were bad.
• Keeping our powder dry - this is carried out primarily by not investing.
• The market has capped return - the reason your IPO tanked.
• You can have any valuation you want, as long as it's $150M - another reason your IPO tanked.
• The buy side are colluding - yet another reason your IPO tanked.
• Beyond NASplat - a description of your tanked IPO.
• "It's like lashing the Hindenburg to the Titanic" - your board's reaction to the brilliant M&A plan you presented.
• N.F.L. - a colorful way of describing big pharma's ability to generate on their own the three to eight new products/year for the next 10 years predicted by Fred Frank as required to keep these companies afloat.
• East Coast Terms-West Coast Terms - the reason you can't get the deal terms you need, no matter which coast you start with.
• Agnostic - used to describe ambivalence about a particular company: "I'm agnostic about that firm."
• Validated target - a target addressed by drugs already approved, preferably with more than $1 billion in annual sales.
• Bake-off - what the emerging company does when it interviews investment bankers pre-IPO.
• "What kind of color are you looking for on your next trial?" - come on, give me an update, or spin, or insider info.
Phrases To Stop Using Right Now
• Win-win situation: We all know what you really want is a win-for-us, lose-for-you situation.
• Definitive agreement: as opposed to what? Wishy-washy?
• Cash is King: I still say it's Elvis.
• Capital efficiency: Most investors agree that biotech excels at capital inefficiency.
• Unmet medical needs: This seems to contradict the investor risk aversion that requires all innovation to have a clear precedence for success.
• Critical mass: does not involve dissension at the Vatican.
• Validates the technology: Only revenues really validate the technology.
• Low-hanging fruit: And I think you just stepped in it.
• Runway: I had a bad experience crashing thanks to an overly short runway, but still, time to let this one go.
• The gold standard, or (the favorite of Monty Python fans everywhere) The Holy Grail
• Shots on goal: You are allowed to use this phrase if you are willing to play against the San Jose Sharks for even one quarter.
• Revolutionary breakthrough: as opposed to those boring breakthroughs.
• Value proposition: a reader commented, "sounds like looking for a cheap prostitute."
• Core competency: OK, you've finally found something you're good at. For God's sake, don't "leverage" it.
• Low-to-mid single digit royalty: Can't you just say three?
• Merger of equals: Has this ever happened?
• And finally, a call from one of our biotech buddies for a new term to follow in the path of "leading edge" and "cutting edge" right past "bleeding edge." Gut-splattered edge, perhaps? Severed limb edge? Email me (email@example.com) with your ideas!
When composing your own presentation, just remember that great Saturday Evening Post bumper sticker: Eschew Obfuscation!
Robbins-Roth, Ph.D., founding partner of BioVenture Consultants, can be reached at firstname.lastname@example.org. Her opinions do not necessarily reflect those of BioWorld Today.