3Qs with Scott Albert of The Aurora Funds
January 22, 2008
Scott took the time to answer our latest 3Qs of the week:
Question No. 1: My venture fund, The Aurora Funds, Inc., invests in early stage Life Sciences, Technology and Healthcare Services companies. This year, with the recession brewing, and all of its derivative affects, we are being selective:a) Quality deals that have been funded previously by angels and are now looking for their first institutional round. Revenue is good; profitability is not necessary. These deals are being actively sought, so we are looking in our geography and in markets that we know.
b) We are excited about core technology opportunities in the energy/renewable space and in the biotechnology space; also, in the growing healthcare services space.
c) Not really tired of anything. But you have to be selective when looking at “another” deal in certain spaces, like mobile content, etc.
Question No. 2: Our due diligence depends on the market space. We almost always search the web for background on the people. If it is an IT deal, then we usually check out blogs and other web sources. Most Life Sciences deals are IP driven, so you spend a lot of time there. Healthcare service deals are cash flow driven, so you really review the financial model - once you get comfortable with the people.
Question No. 3: Getting a meeting is sort of hard. We usually like to know the principals from a previous relationship. Or, to have them vetted by someone we know. There are dozens (hundreds ??) of articles on what to bring to the first meeting. What we like to see is:
a) A short presentation that talks about what the company does; the value proposition and why people will buy it
b) A comfortable discussion about the management’s goals and expectations.
c) A review of the competition and the market.
A first meeting should be about an hour or so.
