Join Life Science Angels

LSA members include dozens of accredited investors with significant experience in life science operations and investing. 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. ƒIn addition, LSA’s members include top tier venture capital firms desirous of an early window on healthcare startups, as well as co-investing alongside LSA in some deals.

The demographics of healthcare investing are virtually all positive: An aging, baby boomer population, enormous opportunities to improve patient outcomes and quality of life, an unprecedented focus on entrepreneurialism in our universities turning our more and better educated entrepreneurs and researchers, a large and well capitalized healthcare sector looking for new products, therapies and acquisitions, and an emerging realization at all government levels that healthcare is an enormous driver of jobs and economic growth. Against that are the increasing costs and complexity of bringing healthcare technology to market and obtaining reimbursement for approved devices and therapies. This all spells opportunity, while the U.S. healthcare system undergoes a transition from fee-based service to preventive medicine. The Bay Area is fortunate to include three great universities, all with cutting edge research in healthcare technologies. Our relationships with those universities provide rich interactions as well as access to potential commercialization opportunities and expertise that is invaluable as we analyze potential investments.

Our deal screening committees – Bio, Device, and Digital Health – work hard to screen and evaluate investment opportunities for LSA members. The investment committees select the companies to present to one of our member dinner meetings based on a rigorous due diligence process. Members make their own investment decisions, including in which deals to invest and how much, but the investments are made through a single LLC. LSA manages all of the paperwork.

Due diligence is the best conduit to successful early stage investing. Research in early stage investing has shown a direct correlation between the amount of diligence and investment returns. Having said that, infinite diligence will not produce infinite returns. While data remains scarce, available data suggests a minimum of 40-60 hours of diligence as the best practice. It is essential that members actively participate in diligence teams. It is enormous fun and often educational to learn from your angel colleagues while providing advice and insights based on your own experience and expertise. Importantly, successful early stage investment involves picking people and teams more than technologies and engineering. A major advantage of an organized angel group tends to be the scope and depth of the group’s network, enabling insights into the performance and reputation of entrepreneurs and founding teams. Furthermore, LSA’s access to physicians, researchers, scientists and engineers can often provide collaboration of the potential for something to be built and to work as expected. Finally, diversify. A diversified portfolio tends to include some very high risk, potentially high return investments alongside some later stage lower risk, lower return investments. Major considerations for healthcare investments include projected capital to exit and the clinical/regulatory approval pathway, which often determines the projected capital. Balancing deals with shorter, less complicated pathways with those with longer, more complicated pathways is typical. Moreover, some healthcare products can be marketed without any formal regulatory approval, and often provide interesting opportunities for investment.

Everyone’s financial situation and tolerance of risk is different. There are two general approaches to angel investment. One is to pick individual deals, commonly 2-3 per year. Generally, starting modestly is a good idea both to learn the process and to build a better appreciation for the risks. Another approach is to join the LSA Side Fund. This operates to automatically invest in LSA deals that hit a minimum investment criteria in terms of number of investors and capital raised. As an LSA member, you are expected to invest a minimum of $25,000 per year, in any combination of one or more deals. Importantly, most healthcare investments will require more than one investment. Members should plan to earmark some capital for follow on investing in subsequent rounds.

LSA is prominent throughout the U.S in the healthcare field and so receive numerous investment opportunities from other angel groups. While we have always syndicated informally among select angel and venture capital groups, the professionalization of organized angel groups over the last decade has created a rich pool of partners where individuals within the groups have ben able to build and expand a foundation of trust and respect. Two years ago, LSA created an informal syndicate of angel groups knowledgeable about and interested in healthcare investing. This group is expanding and is expected to grow during 2012. Syndication group members have agreed to cooperate in the sharing of deals and due diligence, increasing the knowledge of investors in target companies, as well as enhancing the capital pool available to those companies. All of these sources, as well as our members, sponsors and partners keep our deal pipeline full, creating a high quality diversified pool of investments for our members.

There is an annual individual membership fee of $1500. The recommended minimum investment is $25,000 per year. LSA has no override or management fees.