A well-known Catch-22 in the business world is known as the Permission Paradox — “You can’t get the job without experience, and you can’t get the experience without the job”¹. This dilemma is commonly encountered by life science business development professionals. Good deal experience is hard to get and often takes a bit of luck and fortunate timing to obtain. Typically, the people hired for high profile business development positions or staffed on important deals are those with direct, relevant transaction experience. Even accomplished business development executives often specialize on a specific type of deal (e.g., sell-side, buy-side, M&A, etc.) and tend to stay within their comfort zones. So, for someone who wants to transition into a business development career, enhance their deal making experience, broaden their knowledge of different types of transactions or simply learn from the best practices of those who are deal making experts, what should they do? This is a common career development question that many business development professionals think about for themselves and their direct reports.
Unfortunately, there are not many formal education opportunities to learn the critical skills that go into executing life science transactions. Business schools do not teach about the activities or nuances of BioPharma licensing, M&A and / or financing transactions. The business development conferences tend to be good for networking purposes and showcasing panelists who have done high profile deals, but lack a hands-on education or training component. Furthermore, very few companies have formal training programs to develop or enhance business development skills. At large companies, the business development folks tend to focus on buy-side deals. Working on M&A or in-licensing deals can build valuable search / evaluation, valuation analysis and transaction skills. But, a different skill set and knowledge base is required at most smaller companies, where the emphasis is typically on sell-side and financing transactions. Early-stage and small life science companies are often founded and led by entrepreneurs with strong scientific or medical backgrounds, but who may lack formal deal experience, which is so critical for financing and advancing technologies.
The lack of executive education opportunities for deal makers creates a professional development challenge. The best deal-makers are those who have a versatile understanding and appreciation of being on both sides of different types of transactions. So, how does one obtain that knowledge and expertise?
At Locust Walk, we have identified the need for executive education in the biopharmaceutical / medical device transaction space as an opportunity to share our approach to deal-making via a business development and financing course, known as the Locust Walk Institute. The Locust Walk Institute is an exclusive 2-day training program for executives to learn from the best practices developed over the past eight years at Locust Walk and previously in the careers of accomplished deal makers. Through a highly interactive format that includes lectures, hand-outs, break-out sessions, guest speakers and a simulated (and highly competitive) deal negotiation, several important topics are covered during the course including:
- Running a Multi-Track Process: Financing and Strategic Partnering in Parallel
- Building the Business Case: Target Product Profile and Commercial Assessment
- Deal Preparation: The Teaser, Management Presentation and Target List
- Valuation Analysis: Deal Comps, Precedents, DCF
- Biotech Financing Sources: Venture Capital, Corporate VC, Family Office, Crossover Investors, Public Markets
- Accessing the Public Markets: IPO and Follow — On Offering Process Considerations
- Term Sheet Preparation and Review
- Managing Due Diligence
- Exit Analysis
- Negotiations Strategy
If you or anyone in your organization would like to enhance your financing and business development education and skills, we encourage you to consider attending this unique offering. To learn more about the upcoming Locust Walk Institute course on May 3 – 4 in San Francisco, please visit: http://www.locustwalkinstitute.com/. If you have any questions about the Locust Walk Institute, feel free to contact me at josh@locustwalk.com.
¹ The 5 Patterns of Extraordinary Careers by James M. Citrin and Richard A. Smith, published by Random House.
Written by Josh Hamermesh