Strategy and Value-Add

Based upon our experience in intellectual property strategic planning, we have developed a differentiated strategy which allows us to access superior deal flow and then conduct extended due diligence on select companies through a unique consulting arrangement before investing. Our investment experience and intellectual property expertise have been developed over 20 years and involvement in over 60 life science companies. As IP strategic planning integrates with key fundamental activities of early stage companies (such as R&D, Product Development, Business Development/Corporate Partnering, and Financing Activities), IP strategic planning is essential to maximize and preserve the value of early stage life science companies as they mature. IP strategic planning is the key aspect of the value we bring to portfolio companies. To our knowledge, no other venture fund offers this unique value-add to its companies.

How does our selection process work?

Our value-add, IP strategic planning expertise, generates deal flow from other premier venture capitalists and serial entrepreneurs who want our involvement in their companies at an early stage. In this sense, our deal flow is pre-screened in that the vast majority will already have raised an institutional round of financing from other premier life sciences venture capital funds. Our process involves selecting from this pre-screened, venture- backed deal flow, a "Pool" of approximately 35 to 40 high quality companies over the life of our Fund. Once we have elected to work with a Pool Company, we will engage the company in a consulting arrangement to provide value-added IP strategic planning expertise and other business building value-added insights. This unique consulting arrangement allows us to conduct “extended due diligence” on these venture-backed Pool Companies before investing our Fund’s capital.

In the course of the engagement, we interact continuously with management, providing us a unique position to evaluate each company's management, fundamentals, plan and execution over an extended period of time through the IP and business strategic planning process. This close working relationship allows us to gain insights into these organizations not readily available to other potential investors and provides us with a thorough and unique understanding of each investment opportunity, resulting in the selection of the most advantageous opportunities. We typically work with Pool Companies for 6-12 months and are treated like an "insider" prior to investing, allowing us to select the "best of the best" of these companies to invest in at their next capital raise. Our portfolio companies represent the best group of companies selected from the Pool after extended due diligence.

How do we commit our capital?

Our initial investment into a portfolio company is between $1 to $2.5 million with a reserve of significant capital for later rounds. We pay particular attention to pre-money values and path to realization. Our strategy is to have a balanced portfolio of 15 early stage life companies selected from a portfolio Pool of 35 to 40 companies.

What is intellectual property strategic planning? Why is it important?

IP strategic planning is the integration of the fundamental activities of early stage life science companies with the creation, development and presentation of the company's IP portfolio, on a worldwide basis. Critical to IP strategic planning is the development of multiple levels of protection to:

• Complement the maturation of the company and development of the technology:
  In all early stage life science companies, there is a natural evolution of the underlying technology as it moves from product concept to reality, and as the company goes through associated rounds of financing. A strong IP portfolio that tracks the development of the company's technology, protecting each improvement and variation, is critical to preserve value along that evolution;
• Confirm competitive advantage:
  In almost all instances, the underlying technology upon which a life sciences company is formed provides key competitive advantages in the marketplace. It is critical for the IP portfolio to leverage those advantages in order to establish the company's position against potential competitors;
• Preserve near and long-term product opportunities:
  Early stage companies, by their nature, must be selective regarding which product opportunities they initially take forward. The IP portfolio must not only reinforce near-term product opportunities, but must also preserve the company's ability to monetize longer-term opportunities;
• Complement research and development activities:
  The research and development of products in the life sciences arena often requires large expenditures of capital. Therefore, it is critical that the IP strategy anticipate milestones that may be achieved within the R&D pathway, and proactively establish a corresponding IP portfolio to maximize the value of those achievements;
• Support business development activities:
  An integral part of any collaboration strategy or licensing activity is the underlying strength of the associated IP. In order for a company to realize the greatest value through a such a relationship, the IP portfolio must directly complement the basis for, and objectives of, the collaboration or license; and
• Maximize both the perceived and demonstrated value of the company's technology:
  As a life science company moves toward a liquidity event, the potential market associated with the pharmaceutical, device, tool or instrumentation developed by the company will be the primary driver of valuation. Critical to realizing that value, however, is the existence of an IP portfolio that provides the perceived opportunity to effectively "dominate" a relevant therapeutic or diagnostic space, in addition to protecting the near-term revenue potential for the product.