Investor Membership

We were founded in 2005 by Alan May and Casey McGlynn who are still active members. Since 2005 we have invested over $60 million in over 100 startups. We typically invest $200k to $800k as an initial investment. Many of our deals are syndicated by us or by other parties to raise $3 Million or more. Our current minimum investment is $200k. We have participated on average in at least 1.5 later fundraisings for our portfolio companies.

Benefits of Membership

  • Get to Know Your Peers: Perhaps our primary benefit is getting to know and interact personally and professionally with our 130+ members and 12+ technical and scientifically skilled Fellows.

  • New Member Mentor Program: New members may opt to have a member assigned as a mentor. This often starts with a lunch and leads to an on-going relationship and advice over investment situations the new member faces or an opportunity the new member brings and wants to understand how it might fit into the LSA Deal Flow.

  • Share Due Diligence and Investment Savvy: Because are sector focused with core life science vertical segments, all members benefit from the work, education, and experience of fellow investors who participate in the due diligence and affairs of the company.

  • Our Deal Flow: We look at and participate in many promising new technologies and deals that will influence healthcare over the coming decade. We meet the scientists and entrepreneurs face-to-face. Our member-only on-line tools (supported by Proseeder software) give you password protected access to look at the Entrepreneur Application, entrepreneur-uploaded materials, and member-only comments about the investments.

  • Access to Our Follow-On Investments: We commonly make follow-on investments in our companies. While valuations are typically higher, these companies have performed against projected milestones and show traction with investors, strategics and customers. These are pre-vetted deals where some of our members have come to know the management and understand the market and product. Although fundraising may have to be allocated to prior LSA investors, there are often opportunities for other members to invest. Several recent deals have had attractive follow-on valuations, often because the company raised a smaller bridge or note round and has now achieved the milestones enabling a larger equity round.

  • Investment Paperwork: Kustov and Associates handles our investment accounting. Their fees are included in membership dues so our members have no additional accounting costs. We invest through an LLC so there is one set of paperwork and one set of documents for the company. You receive a K-1 tax form each year for your investments. Because of legal restrictions on the number of members of LLCs, we have to open a new LLC every few years and now are using Life Science Angels 9, LLC.

  • Tax Planning: We do not provide tax advice, although we do have occasional presentations on investment strategy by members who are not tax professionals. The experiences of these members help to steer you in the right direction when you talk with your tax advisor. Kustov and Associates is available to members for a modest consulting fee. All angel investors would benefit from familiarity with their financial situation and may wish to discuss the following beneficial IRS codes with their tax advisor: 

    • 26 U.S. Code § 1045 - Rollover of gain from qualified small business stock to another qualified small business stock.

    • 26 U.S. Code § 1202 - Partial exclusion for gain from certain small business stock.

    • 26 U.S. Code §1244 - Losses on small business stock.

  • Investment Monitoring: A key to successful angel investing is staying in close touch with the company to provide advice and monitor progress. Every round of investment has unique characteristics and results are better if an experienced investor with an investment in the company works with the management.

  • Investment Progress Reports: LSA does its best to have companies report regularly on their progress or lack-of-progress. The reports emailed to members of those investments. One of the difficulties of angel investing is securing reports on the companies when the investment amount is small. LSA addresses this problem by having a larger pooled investment through the LLC and having a deal lead who maintains contact with company management, often as a company board member.

Business Events

  • Member Dinners - We have 5 evening dinners in the Palo Alto Area that are attended by about 80 of our members, entrepreneurs, and guests. They are held at the Sharon Heights Country Club in Menlo Park or a similar facility. The meetings start with a cocktail hour for people to network. Then dinner and then two or three companies make presentations - 20 minute to present and 10 minutes for questions. Most companies have a due diligence lunch within a week of the meeting.

  • Screening Committee Meetings - Our two screening committees, Device/Digital and Bio/Genomics each have two screening committee meetings a month, fewer during holiday periods. A complimentary light dinner is provided at these meetings for members. In-person attendance is typically 20-25 members. There is a call-in on Zoom or by phone. Many company presentations are recorded for later review by members. Members are expected to attend two screening committee meetings a year, either in-person or teleconference.

  • Due Diligence Meetings - Companies that amass enough member interest in the Screening committees will then be evaluated further by due diligence teams consisting of Members and Fellows who have the expertise to evaluate different aspects of the business plan, including the market, technology, IP, financials etc. and develop the Term Sheet. LSA believes that good due diligence is important for making good investment decisions. Members are highly encouraged to participate in due diligence teams where they have relevant domain expertise. If a company passes the due diligence vetting process, the due diligence teams will produce a Deal Memo and nominate the company to be selected for dinner presentation. Members will vote to select two candidates among those nominated for dinner presentation.

  • Due Diligence Lunches - For companies selected for dinner presentation,  a due diligence lunch for LSA members only will follow shortly afterwards. This is often held at the offices of Wilson, Sonsini, Goodrich, and Rosati (WSGR) at 650 Page Mill Road. There is usually a dial-in and a recording of the meeting. Complimentary beverages and sandwiches are provided. There are typically 15 - 20 due diligence lunch meetings for new and follow-on investee companies a year. 

  • Member Education Sessions - We hold several 1 - 3 hours sessions in the Palo Alto Area on topics of interest to members. Important topics are repeated at least every two years. Past sessions have included: term sheets, building a portfolio, advances in digital healthcare, Proseeder usage, exits, deal valuation, tax provisions for small company investing, and introduction to LSA for new members. Beverages are provided and a light meal if the meeting is at a lunch or dinner time.

  • External Events - LSA informs Members of interesting events for Angels in the Bay Area and across the country - pitch events, open houses, speaker panels, angel meetings. Our members often receive discounts to paid events and invitations to events not generally available to the public.

During the COVID-19 Pandemic period, all meetings continue via Zoom and no in-person meetings are held.

Complimentary Social Events

  • Summer Party - This is a complimentary party for members and Fellows and sponsors, often at the house of one of our members. Food and beverage are provided. Attendance is often 80-100 members.

  • Christmas Party - Same as Summer Party, but in December or early January.

  • Screening Committee Regulars Annual Dinner - We provide a complimentary dinner at a fine local restaurant for members who regularly attend and contribute at our screening committee meetings.

Administration

  • We have a full-time Executive Administrator, who handles all paperwork and participates in all the deal closings.

  • We use the Proseeder software for the members-only section of our website. You can link to it on top menu bar or in a Quick Link. Every member has a password on this confidential members-only site. As well as having a "Deal Room" for all our entrepreneurs who apply for investments, we have a calendar of events, materials from member education sessions, library of LSA Newsletters, and the current deal flow pipeline. We support remote members who get the documentary materials and can attend meetings by phone or on-line.

  • We have a web master who takes care of questions about using the Proseeder software. When you join, you will be introduced by email when you join to our web master who is happy to respond quickly to your questions.

  • We have four Newsletter emailed a year. These include such items as an introduction to new members, list of investments made, calendar of events, interesting external events, and other newsworthy items.

Qualifications for Membership

All our members are accredited investors, often called 501C Regulation D. This includes a number of corporate and trust entities.

Most of our members qualify as:

  • A natural person who has individual net worth, or joint net worth with spouse that exceeds $1 million at the time of the purchase, excluding the value of the primary residence.

  • A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

Our Members
LSA members include investors with careers in the life sciences; however, many members are interested in investing in life sciences, but have had professional careers in a different arena. We welcome both types of members.

Members include prominent executives, physicians, scientists, engineers and entrepreneurs. LSA’s members have been founders, Chairpersons, CEOs, and senior level executives in many healthcare startups. LSA members are active participants in deal sourcing, due diligence, membership screening, coaching, etc. In addition, LSA’s members include family offices and groups desirous of an early window on healthcare startups, as well as in investing alongside LSA.

How much do our Members Invest?
Everyone’s financial situation and tolerance of risk is different. However, we find a good approach is to invest a smaller amount in more deals, for example 2 to 3 deals each year instead of putting all the investment in one deal. LSA members are expected to invest $25,000 per year.

We provide complimentary education sessions on all aspects of investing. New members who opt-in will be assigned a mentor member to learn about LSA and life science investing.

How much does and LSA Membership Cost?

Individual memberships are $1,750 per year. Couples/families are $2,500 per year. Memberships begin January 1. For new memberships that begin later in the year, costs are adjusted.

Some Numbers:

  • The minimum investment by an individual in an initial LSA investment in a company is $10,000.

  • In follow-on rounds the minimum investment is $5,000 unless our pro rata in the deal reduces this amount. Since LSA historically has made about 2 follow-on investments, there should be ample opportunities for these investments if you are an existing investor in the deal. There has often been investment available for other members, but only if existing members do not take their pro rata shares.

  • LSA only makes a first-time investment in a company if the total from all members reaches $200,000. There is no such minimum for follow-on investments.

  • Total investments from LSA in a typical year are $4.5 million.

  • LSA has invested over $60 million in over 100 companies since 2005.

Steps to Join Life Science Angels

If you are interested in joining, fill in the enclosed application and we will get right back to you.

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Thank you for considering membership in Life Science Angels.