Investment Thesis Development

Introduction

Without a lot of exposure, it can be challenging to understand venture investments in your discipline or domain expertise.

Remember the goal is to frame a working model that calls out current state, key risks to overcome, the scientific | business | commercial | clinical | development plans and team’s approach to overcome the key risks, company building opportunities, and on what time line.

We want you to have a work product you can point to that showcases how you think the unsolved problems can be solved. This work product is to be a living, breathing document, as the science evolves, as the market changes, and as you learn from your experiments and others on what failed, and areas to pivot.

We want you to be able to share your thesis with more than your lab mates, advisor, or peers in your cohort. We want you to be able to get others, who are not subject matter experts, to get excited by what you’re excited by, and it’s time to think outside of the lab and peer-reviewed box.

Exercise: Develop your own investment thesis

1. Download the above thesis development template. You already have a couple of ideas of areas that keep you up at night. Is it the last three papers you read, the draft manuscript you’re revising, is it a mass media headline, is it something your friend shared, you know the one working across campus in a completely different field and problem space.

Use the thesis development template to fill in the areas you want to focus on

1. Technology: Is this something that can be leveraged and used to scale?
2. TAM: Is the total addressable market really, really huge?
3. Team: Is the team cohesive, capable of execution (If relevant)?
4. Traction: What is the company showing now? What are their next milestones?
5. Potential interview questions with internal and external experts to refine your thesis

To begin your thesis development, you can use this prompt (best if paired with any recent literature in the space):

🤖

I am a PhD graduate who specializes in [specific technical area] development. Please help me build an investment thesis in this area by: 1. Summarizing [two] recent papers [don’t forget to attach the paper(s)] 2. Identify 3 bullet points focused on scientific translatability, safety considerations, and platform potential 3. Recommend 3-4 competitive companies in this area and summarize their funding history 4. Recommend 2-3 development partners worth exploring and 2 points on why they may be relevant 5. Bonus: Help me find [two] relevant papers
2. Company Evaluation & Diligence
Starting place_Potential Diligence Questions-Biotech.pdf

Ask around to meet with scientific founders, with a goal to have them pitch their company to you. Ask specifically for them to share with you a non-confidential pitch deck that you would like to review and provide feedback. Share that you may be able to offer relevant introductions. Conferences, LinkedIn, X, on- or off-campus scientific and business focused meetups are great places to start branching out. The goal is to socialize, network, and learn from others OUTSIDE of the four corners of your lab, and OFF campus.

Response Tip: Remember, I don’t know or show me is an acceptable response, too!