Advice on capital increase of an active ingredient company
Summary
Health sector startups with little commercial traction continue to suffer to raise money in Spain, even though their capital needs are evident in the case of research and development.
ST strategy advised Filtros Solares* in its second capital increase. It analyzed the work done so far, configured, modified and perfected the documentation and design of the process, and prepared a screening of potential investors.
Raising capital to the health sector
The potentiality of patents
Maintain structure until monetization
The complete story
Opportunity
After making its first round of capital and holding three patents (in addition to a fourth one in progress), the company had to make a relevant capital increase in order to develop its business plan and cover the financial needs of the company until the break even, which is expected in three years (according to the current financial plan).
The research needed to carry out new patents to continue protecting the brand, and consequently the company with its products, implied a relevant investment in the phase in which the company was in.
The company was looking for advice in the configuration of a relevant capital increase, as well as support and accompaniment in the search for potential investors.
Recommendations
We recommend that the CEO and management team take some immediate steps to improve the documentation and focus of the capital increase:
- Continue screening carried out by ST strategy, in addition to maintaining the ongoing contacts established by the company.
- Follow up the investors based on the methodology shared by ST strategy.
- Modify the Blind Profile and the Information Document to comply with the structures required by such a process.
- Focus the process with efficient communications to transmit the needs in an optimal way and to understand the perspectives of the potential investors.
* The confidentiality of our clients is a priority of the company. Although we have changed their names, the information is real