Adrenaline junkie? Raising capital could be for you!

Raising capital is no easy task and demands a great deal of time and energy. We interviewed Kitozyme CEO François Blondel, who agreed to share his experience of running several campaigns to raise capital. We also talked to KiOmed Pharma, Nyxoah and OncoDNA, three companies that have successfully raised capital in recent months.

What in your mind is the golden rule when it comes to launching a campaign to raise capital?

François Blondel: The key thing is to think ahead. Don’t wait until the cash is running out before taking the plunge. Campaigns generally last somewhere between 6 and 9 months, depending on the amount of capital to be raised, so you need to draw up your business and financial plans well in advance in order to organise the campaign in time. It’s also worth remembering that it isn’t just about the money – there’s also the matter of credibility. Potential investors want to feel as though they’re dealing with a sound company that has studied and prepared the matter carefully.

Speaking of which, how do you go about approaching investors?

FB: Having a good network of contacts is important. If you don’t have this, then you can use a financial intermediary who does this kind of thing for a living. They will help you to gather all the necessary information, such as financial plans, the company’s predicted future performance and market research, and will be able to communicate the message in a language that investors understand. They can open doors to investors who have an interest in your product, technology or service.

Is that enough to open every door?

FB: No, while a good intermediary is useful, you can’t rely solely upon them. Raising capital successfully to support a specific project ultimately boils down to the person managing that project. They have to weigh up their strengths and weaknesses and ask themselves if they are up to the job of running the campaign. People who are both scientific and business savvy are a rare breed, so it is only normal to team up with a partner who has the requisite complementary skills. This is exactly what we did with KiOmed Pharma. Yves Henrotin, Professor of General Pathology at the University of Liège, and I were looking for someone who would balance our own areas of expertise and so approached Houtaï Choumane, the current CEO of KiOmed Pharma.

Are all investors good investors?

FB: No. Generally speaking, those who invest larger amounts will want to monitor how the company is managed and sit on the board of directors. When preparing your campaign, it is therefore important to define the kind of people you want around the table. To do this, you need to identify the company’s needs and not just in terms of finance. A preclinical-stage company will need different resources than the one that is ready to take its product to market. The type of investors that you want to attract will depend on the stage you’re at. It’s a great opportunity to bring people and resources to the table that offer much more than just money. Companies sometimes make the mistake of focusing solely on the financial side of things.

Which is better: national or international investors?

FB: You have to weigh up the pros and cons. International investors certainly bring a sense of credibility that inspires confidence and respect. This isn’t something that can be measured, but it’s very noticeable nonetheless. Having said that, it’s important not to underestimate the added difficulties that such investors can pose for a company, such as the need to provide more explanations – a foreign investor will be less familiar with the Belgian market. Different languages can also have an impact if an investor is also a member of the board of directors and demand more time and energy.