Typical Milestone Events for investors
When evaluating a project it is essential to understand in detail what the venture’s ultimate goals are in terms of future positioning.
Ensuring a well-defined and defensible market position, and demonstrating clear insight on how exactly they plan on achieving that is a must. This should be clearly displayed in the company's development roadmap.
Depending on the nature of the project, general aspects to be considered in such a development roadmap are often grouped into; technical, clinical, regulatory, and commercial related items. Each with specific particularities depending on the type of product in question, and the company’s stage of maturity – with well-defined milestones set out for each area.
Here are som key pointers to keep in mind:
Get an overview
Typically, you will see that earlier-stage projects mainly will focus on developing the technical area of the project to reach proof of concept, whereas more developed initiatives tend to focus more heavily on generating conclusive clinical evidence to reach the milestone of regulatory clearance (in general CE and/or FDA) and ultimately drive early adoption among Key Opinion Leaders (commonly referred to as ‘KOL’s’).
In addition, a venture’s development roadmap also provides a clear overview of;
a) what has been achieved to date
b) what is expected to be achieved (and by when) moving forward
With each achievement being a point of de-risking for the project, and therewith the investment thesis of the investor.
Questions to ask yourself
While evaluating a company's future roadmap and defined milestones, it tends to be valuable to evaluate how these milestones are linked to the current, and future investment rounds. Answering the questions: “what milestones will be achieved with the proceeds of this investment round and, will these achievements be solid enough to raise the next round at that point in time?”
In general, Business Angels join early-stage investment rounds, prior to any clinical validation, but often require strong milestones around the IP (and FTO), and product verification and validation for the MedTech field. In the case of Pharma related projects these milestones are more in the field of drug target discovery, and in vitro safety aspects. Moving ahead in the project maturity stage, key milestones include the development of clear objective data in a pre-clinical or clinical setting, and early commercial traction when considering the Digital Health space.
Contribution by
Lourens Verweij, Additio Investment Group
