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Ten Pointers for the Perfect Pitch

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Presented by: Byron Shen

Investors often suffer from “attention deprivation” from seeing too many and too similar startup pitches. It is vitally important to explain your idea clearly and demonstrate quickly in order to grab their attention, fast! Create the perfect pitch by learning the ten key elements investors are looking for.

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Ten Pointers for the Perfect Pitch

  1. 1. Startup Investor Pitch Byron Shen, PhD MBA CEO, Velox Biosystems bshen@veloxbio.com
  2. 2. Back in the 1480s, Christopher Columbus had a “Startup Pitch” “The Travels of Marco Polo” - Columbus's copy with his handwritten notes • The Opportunity: • Spices in the Indies, Silk from Cathay • The Problem: • Under the Pax Mongolica over Asia, Europeans had access to the Indies/Cathay via a land passage • Marco Polo and the Silk Road • But with the fall of Constantinople to the Ottomans in 1453, the land route to Asia became unavailable to the Europeans • The Pitch by Christopher Columbus: • The Columbus brothers proposed to find a western sea passage to reach Cathay and the Indies (Image credit: Wikipedia)
  3. 3. Columbus’ Hypotheses & Assumptions Toscanelli’s map of the Atlantic Ocean (superimposed on a modern map) • “The Earth is not flat” • Known since the time of Aristotle • 3rd century BC. Eratosthenes computed the circumference of the Earth • 9th century. Alfraganus estimated a degree of latitude (or longitude) is 56⅔ miles • Map of the Atlantic Ocean by Toscanelli (1397 – 1482) • Columbus’ calculations • He estimated the Earth is 30,200 km in circumference • He estimated the distance from the Canary Islands to Japan to be about 3,700 km! (Image credit: Wikipedia)
  4. 4. Pitching to “Investors” • In 1485, Columbus presented his plans to King John II of Portugal • In 1486, Columbus presented his plans to Queen Isabella of Spain • In both cases, due diligence/expert opinion = Columbus’s idea impractical • In 1488, Columbus again appealed to the court of Portugal • But the Competition! Portuguese explorers developed the southeast passage to Asia around Africa. In 1488 Bartolomeu Dias reached the Cape of Good Hope. • … he also appealed to Genoa and Venice, the court of Henry VII of England…. With no success • But in 1489, Spain gave him some seed money (some annual allowance & free stuff) • He finally succeeded in 1492 with a Term Sheet with the Spanish crown: • The rank of Admiral of the Ocean Sea; Viceroy and Governor of all the new lands he could claim for Spain • He had the right to nominate 3 persons, and the sovereigns would choose one, for any office in the new lands • 10% of all the revenues from the new lands in perpetuity, and the option to buy 1/8 interest in any commercial venture with the new lands and receive 1/8 of the profits.
  5. 5. (Image credit: Wikipedia) (Image credit: requestreduce.org) 1st landing Oct. 1492 & the rest is History…
  6. 6. The Startup Journey The Obstacle Course (Image credit: redbull.com)
  7. 7. Different Types of Pitches 1. The speed-dating pitch 2. The Pitch/Investor Deck ➔ The due diligence discussion “Velox Biosystems Wins Big at UC Entrepreneur Pitch Competition”
  8. 8. Rapid Accurate Point-of-Care
  9. 9. Urinary Tract Infection Sepsis Cancer
  10. 10. Rapid Screening Device Antibiotic Sensitivity Test Device High-volume Consumables
  11. 11. Different Types of Pitches 1. The speed-dating pitch 2a. Executive Summary 2b. The Pitch/Investor Deck ➔ due diligence discussion
  12. 12. Startup Investor Deck - Compelling, Convincing, and “Comprehensive (enough)” - Key Information for Investors
  13. 13. Your Investor Deck - Key Elements 1. The problem you are solving 2. The size of the opportunity 3. The level of competition 4. Your solution and differentiation 5. Your team (strength, experience, etc.) 6. Current status (IP, early data, prototype, etc.) 7. High level financials (the underlying assumptions) 8. Use of the funding 9. Your roadmap (key milestones, timeline, etc.) 10.Potential future exits (and returns) for investors
  14. 14. Examples: Velox Pitch Deck • Narrative structure • Company/Mission – Unmet Need – Solution – Data – Competition – Market Opportunity – Pipeline – Team – Roadmap/Milestones • Appendix (supporting data slides/details) • Navigation tabs/ribbon • shows where you are in the pitch deck • easy navigation back and forth
  15. 15. There are still several fundamental challenges in healthcare today which seriously affect the correct diagnosis and timely treatment of medical problems. This is especially true in the areas we are working on: urinary tract infection (UTI), sepsis, and cancer early detection, where existing technologies can only target either speed or accuracy, but not both, or sometimes they just cannot "find that needle in a hay stack". Our rapid, ultra-sensitive detection technology is able to identify and quantify the presence of disease at the single-cell or single-target level; provide both speed and accuracy that is not available today; and we can "find that needle in a hay stack". We have already developed product prototype and have very exciting clinical data to show we can create game-changing solutions and make a big difference in medical diagnosis. And we have a great team to make it happen, and we will become a company with value in $billions in the future. Contact: Byron Shen, PhD MBA (bshen@veloxbio.com) “Discover possibilities that were once impossible”
  16. 16. Velox Core Technology/Value Proposition • 3D rapid detection platform: • Culture-free pathogen detection • Digital droplet molecular detection • Ability to achieve exceptional sensitivity and rapid speed in combination
  17. 17. • Antibiotic resistance is one of the most urgent threats to public health (CDC) • In UTI, there is a rapid increase of resistance (even in the U.S.) due to high prevalence/recurrence, high misdiagnosis, and empirical use of antibiotics • High prevalence/recurrence rate • High false positives (30-50%) in Dx • Testing for antibiotic resistance takes at least 2-3 days currently • 2nd most common type of infection in the body (NIH) • 150 million UTI cases/year global (2001) • 40-60% women will get UTI at least once; 25% women will experience recurrent UTIs (NIH) • All pregnant women should be screened for UTIs • 52% increase in hospitalization due to UTIs • 15+% annual growth in US • $6 billion in healthcare expense w.w. (AUA)
  18. 18. • Patented detection principle is an elegant solution for high throughput scanning of large sample volumes • Virtually zero sample processing • Direct enumeration of bacteria (much more sensitive than indirect methods)
  19. 19. UTI Rapid Screening Sample-to-Answer in 10 minutes Significant improvement in diagnostic accuracy Point-of-care Antibiotic Susceptibility Test Sample-to-Answer in 2 hours Phenotypic AST against a panel of common UTI antibiotics Targeted antibiotic Rx in the same day Cloud-based Local Resistance Rate Surveillance Antibiotic resistance monitoring/tracking Velox Prototype Device Check out the 2-minute Velox pitch video by clicking here: http://www.veloxbio.com/video/
  20. 20. R² = 1.00 1 10 100 1000 10000 1E+0 1E+1 1E+2 1E+3 1E+4 1E+5 1E+6 1E+7 AverageNumberofHits/90sec Particle Concentration (particles/mL) Highly Accurate Bacterial Quantification Phenotypic Antibiotic Susceptibility Test
  21. 21. UTI Rapid Screening • Clinical feasibility study (n = 500) • Superior accuracy - False positives 6.7%; False negatives 1.2% • For Dipstick - False positives 34–49%; False negatives 6-26% Antibiotic Susceptibility Test • Clinical feasibility study (n = 60) • Accuracy (categorical agreement) already surpasses 90% • Enables clinicians to make informed antibiotic decision at the point-of-care Further development to optimize product/clinical performance See Data Table 1 See Data Table 2 Urology specialist: “this product certainly has the opportunity to be a game changer in this space.”
  22. 22. Point-of- care < 10 minutes Accuracy > 90% < 2 hours Accuracy > 90% VELOX Biosystems ✓ ✓ ✓ ✓ ✓ Dipstick ✓ ✓ Urine Culture ✓ ✓ Microscopic Analysis ✓ Clinical laboratory systems (Beckman Coulter, BioMérieux, BD, etc.) ✓ ✓ Click here for detailed comparison
  23. 23. • Currently there is no such product in the point-of-care space • An in-depth competitive analysis shows most other technological approaches may not be practical for point-of-care applications • Clinicians are actively looking for solutions to fill this unmet clinical need ✓ Primary Care/Urgent Care ✓ Urology ✓ OB-GYN ✓ Emergency Medicine Total Available Market > $1 billion • U.S. market: • >11 million UTI outpatient cases/year (suspected cases even higher) • 5 million intended pregnancies/year; average 2-3 screenings per pregnancy • U.S. point-of-care TAM > $400M • Global market: > $1 billion Go-to-market Strategy • Selling to clinics directly in key market segments where the demand for point-of- care testing is highest • “Razor/razorblade business” model: PoC analyzer device + high volume consumable test kit sales
  24. 24. In-depth Market Research Survey with 50 Physicians The Velox UTI Product is viewed very positively by all clinician groups, with high scores on “interest level”, “meets unmet need”, “improving patient outcomes”, “innovation”, “likelihood of purchase”, and “likelihood of becoming a standard of care”. Clinicians also indicate that a very high percentage of their UTI patients would benefit from the Velox UTI Product: • Primary Care/Urgent care: >90% of UTI patients • Urology: >80% of UTI patients • OB-GYN: >93% of UTI patients • Emergency: >70% of UTI patients Clinicians consider both Velox UTI Products highly valuable for their clinical practice!
  25. 25. 0 20 40 60 80 100 120 140 2020 2021 2022 2023 UTI Sales Revenue Projection ($millions) US Europe Asia ROW UTI product introduction in early 2020; revenue projection for 2020 - 2023 Potential additional revenue from cancer liquid biopsy product by 2022 Potential additional revenue from bloodstream infection product by 2023 Potential additional revenue from partnership projects UTI Screening Prod UTI AST Prod Cancer LBx BSI/Sepsis
  26. 26. Cancer liquid biopsy • Market opportunity est. $1.9B in 2022 (bcc Research) • Velox IC3D Digital Droplet Technology can achieve >> 10x improvement in detection sensitivity • Scientific publications (Lab on a Chip) • Development plan prepared (including clinical study plan) for colorectal cancer liquid biopsy Bloodstream Infection/Sepsis • Market opportunity est. $1.4B in 2023 (Kalorama) • $5M NIH collaborative research project with UC Irvine • Scientific publications (Nature Communications) Food Safety (upstream application) • Feasibility study completed • Potential partnership opportunity with other companies in the food safety space
  27. 27. Core Competency • Microbiology, Molecular biology, Immunology, Cancer biology, Chemistry, Microfluidics, Fluorescence detection, Instrumentation, Regulatory • Ability to leverage UC Irvine resources/expertise Current IP • Encapsulated sensors and sensing systems for bioassays and diagnostics • Methods and devices for characterizing particles in clear and turbid media • Droplet-trapping devices for bioassays and diagnostics New IP (to be filed) • New detection technologies • Application/product embodiment
  28. 28. Tim Abram, PhD • Velox Director of R&D • Biomedical engineering and system integration • Medical device and Dx startup experience Byron Shen, PhD MBA • Velox CEO • 25 years in medical device, pharma/biotech, diagnostics • Fortune 100 and mid/small companies experience Prof. Weian Zhao, UC Irvine • Velox Founder & Sci. Advisor • UCI Zhao Lab (30 people) • MIT Technology Review TR35 • NIH Director’s New Innovator Award
  29. 29. $2M seed money (angel and VC investors) • Velox lab/operation set up in April 2017 • $5M NIH R01 grant (with UC Irvine) • UTI technical and clinical feasibility demonstrated • R&D pipeline with other high impact applications • Key partnership projects established Planning $6M Series A raise in early 2019 • Complete 1st UTI product development and clinical trial • CE mark/510(k) regulatory submission in 12-18 mos. • UTI Screening product intro in 2020, followed by UTI AST product 6-12 mos. later • On-going R&D pipeline activities IPO or M&A exit for investors Platform Technology
  30. 30. Fundraise complete 3 mo. 6 mo. 9 mo. 12 mo.
  31. 31. Velox Data Slides *If you are interested, here are 5 data slides including more details about clinical feasibility data, concept validation with clinicians, and competitive analysis
  32. 32. • Diagnostic performance using a simple CFU/ml threshold cutoff is already far superior than that of dipstick. Diagnostic accuracy (especially specificity) can be further improved by applying an intermediate zone for data analysis/report. • Both analytical methods result in an excellent NPV, demonstrating the value for a rule-out test. Sens (%) Spec (%) PPV (%) NPV (%) FPR (%) FNR (%) Intermediate zone: 1-5x105 CFU/mL 98.7 93.3 79.4 99.7 6.7 1.2 No Intermediate zone (Cutoff = 105 CFU/mL) 99.0 77.4 53.8 99.7 22.6 0.99 Intermediate zone: 1-5x105 No Intermediate zone (Cutoff = 105) (n = 397) Culture + Culture - (n = 481) Culture + Culture - Velox + 81 21 Velox + 100 86 Velox - 1 294 Velox - 1 294
  33. 33. N VME* (%) ME** (%) Categorical Agreement*** (%) Sensitivity (%) Specificity (%) COMBO 107 1.87 4.67 93.5 94.0 91.3 AX 20 0 0 100 100 100 CP 25 4.00 0 96.0 100 87.5 CZ 24 0 4.17 95.8 94.7 100 GM 22 4.54 9.09 86.4 88.2 80.0 NF 16 0 12.5 87.5 86.7 100.0 *VME – very major error (reference category result is R and new device result is S) **ME – major error (reference category result is S and new device result is R) ***FDA guidelines require Categorical Agreement to exceed 90% Sensitivity and Specificity here may also be considered as “True Susceptible Rate” and “True Resistant Rate”, respectively
  34. 34. Technology Advantages Disadvantages Point-of-care AST Dipstick Point-of-care; easy to use; inexpensive High FPR and FNR; no AST No Conventional urine culture + ID + AST Sensitive; comprehensive info; Time consuming; lab-based No Urinalysis and microscopy Fast; relatively inexpensive No AST No MALDI-TOF Rapid and sensitive, potential for AST Expensive equipment, not practical for point-of-care No PCR Good sensitivity; bacteria ID; some AST info Extensive sample processing; expensive to cover all AMR genetic markers; genotyping /= phenotyping No Fluorescent in situ hybridization (FISH) Good sensitivity; bacteria ID; potential for AST assay Sample processing; expensive to cover all AMR genetic markers; genotyping /= phenotyping No Microfluidics Potentially more rapid with minimal sample processing, small footprint May be challenging in engineering complexity, assay cost, LOD No Immunological-based assay Rapid and inexpensive Poor specificity and sensitivity; No AST No Forward light scattering (current embodiment) Inexpensive, with potential for AST LOD, specificity somewhat lacking; take 3 hrs for bacteria detection No
  35. 35. Primary care/ urgent care Urology OB-GYN Emergency Medicine* Interest level 4.5 4.6 4.4 3.9 Meets unmet need 4.2 4.5 4.3 3.6 Improving patient outcome 4.5 4.5 4.1 4 Likelihood of purchase 4 4.2 4.1 3.5 Innovation 4.4 4.3 4.2 4.5 Likelihood of becoming a standard of care 4.2 4.4 4.1 3.5 (N = 50 clinicians; weighted average in each group) 5 = Strongly Agree 4 = Agree 3 = Neutral 2 = Disagree 1 = Strongly Disagree • (Primary care/urgent care) “It is a great tool. Very helpful to determine presence of uti and guide initial tx. 2 hour AST turnaround would be a fantastic event for my patients.” • (Urology) “This would be great. We are in significant need for a way to better utilize or not utilize abx.” • (OB-GYN) “This would be an amazing tool. Practical and convenient with the potential for improved patient care.” • (ER*) “Sounds absolutely amazing, especially for diabetics and/or those with recurrent UTI whom we know have had antibiotic resistant organisms in the past!” *Note: In general, ER clinicians place very high value on the 10-min UTI Screening, but feel the 2-hr AST is on the long side for the ER setting.
  36. 36. Thank you, and Q&A Yeah! Byron Shen, PhD MBA CEO, Velox Biosystems bshen@veloxbio.com

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