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"Investors and founders should share the same vision and expectations"

03/09/2019

As managing partner of META Ventures, Francesca Natali was interviewed in the eHealth HUB Smart Guides on how to effectively seek funding

This report will be published soon on the eHealth Hub website, in the meantime, you can read some of her tips as an appetizer!   

1. Can you start by giving a little background info about yourself and META Ventures?

META Ventures is an international fund manager specialized in early stage investments into high growth companies. With over 20 years of experience in fund management and running private-public financial instruments, MV has invested in more than 200 companies in Italy, Poland, Slovenia and the Netherlands.  As a general partner of META Ventures, I have a track record in co-investing in the healthcare sector with Business Angels in Italy and Europe. I am Board Member and Observer of several companies specifically those with Business Angels co-investors such as Biogenera (Pediatric Oncology), Angiodroid (Medical device) and Cellply (Diagnostic Platform). Since 2015 I have been a member of the Venture Capital Commission at AIFI – the Italian Private Equity and Venture Capital Association and I have been involved in business plan competitions in universities in Italy and abroad. Since 2011 I have been focusing in the management of coinvestment funds with angel clubs and other early stage investors, targeting at SMEs in different sectors.

2. You review a lot of tools and solutions every year.  In a startup pitch, what is more likely to draw your attention and pick your interest?

Looking for investors is the entrepreneur's version of job interviews.  Investors are not investing in a business simply because they believe in the entrepreneur vision (though I do have to believe in it to invest!), they are investing into a business to make profit. Having promising margins is going to be the best way to impress investors but having the numbers themselves is not everything. They have to be presented in a pleasing, professional manner as well. I like to see longevity and a growing marketplace full of consumers. Investors want to see that their money is going to keep working for them, so entrepreneur should look to show them that his business can help them do that. A successful business has a clear vision and a problem that they aim to solve with their products or services. This problem should be something that affects a large group of people, as a niche problem will have fewer business opportunities or room for growth. But regardless of the size of the target market, it's imperative to have a clearly defined problem and a product that promises to solve it. Having repeat customers is a good sign of a successful business, in addition to this, having personal connections with customers through all avenues is always a good sign to attract potential investor.  Prove to potential investors that the product/service has loyal fans that will always be there for the brand!

3. What would you consider a red flag, the one thing that tells you "I don't want to investigate any further"?

Investors don't make money until there's a liquidity event. That's why we always talk about exit strategies.  You can have in front of you the world's happiest, healthiest, most cash-independent company, but investors won't be happy until you get them cash back. The win is getting money back out of the company in a reasonable length of time! If it's not scalable, forget it. The real growth opportunities are scalable. It used to be products only, but now there are some scalable services, like web services, for example. But if doubling your sales means doubling your headcount (that's called a body shop), then investors aren't going to be interested. If it's not defensible, it's tough going at best. If anybody can do it, then investors aren't interested. Of course, there are always exceptions.

4. Through META Ventures you already made a few investments on eHealth companies.  Can you say a few words about what made you choose these companies you invested in?

Investors and founders should share the same vision and must have the same expectations or, at least, they should be able, from the very beginning, to find a common way to align their own interests. Because of that it is crucial to select the right team and the best CEO. The team was always the positive factor both in Angiodrod and Cellply together with a sustainable and scalable business model:

Angiodroid has developed and patented an innovative medical device for peripheral interventional angiography based on carbon dioxide controlled injection. The company is the first one substituting traditional iodinated contrast media in angiography procedures eliminating all related side effects associated with renal or diabetic vascular disease.

Cellply has developed the first diagnostic platform to predict the efficacy of the therapy, through the ex-vivo analysis of pharmacological response of patient cells and tissue.