Table of Contents
When Should a Medical Startup Hire an FA?
Many founders of healthcare companies will ask:
We know investors ourselves, why do we still need an FA?
This is a very practical question.
I. Knowing investors does not equal completing financing
During the financing process, companies need to solve:
- Investor screening;
- Financing rhythm;
- Valuation;
- Material preparation;
- Due diligence;
- Term negotiation;
- Transaction execution.
These tasks require a continuous investment of a lot of time.
II. What is the core value of an FA?
A professional FA’s value is not just “introducing investors.”
More importantly, it helps companies to:
Find the right capital
Different investment institutions focus on different stages, industries, and transaction sizes.
Establish a reasonable valuation
Valuation not only affects the amount of financing, but also affects subsequent financing and equity structure.
Optimize the transaction plan
Companies need to comprehensively consider:
- Financing amount;
- Equity ratio;
- Investor type;
- Board arrangements;
- Valuation adjustment mechanism;
- Liquidation preference.
III. When should you start looking for an FA?
It is generally not recommended that companies wait until their cash flow is very tight to start financing.
A more reasonable way is:
Plan the financing window in advance.
Especially for innovative drug and medical device companies, the R&D cycle is long, and capital planning needs to be arranged in advance.
T-Capital’s View
An excellent FA does not simply help companies “find money.”
The real value is:
Helping companies find the right capital partners at the right time and in a reasonable way.