Tech trends and business ideas

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Tuesday, February 28, 2006

Sequell Process

Our Startup funding / VC consulting process

Our investment process is optimized to realize substantial returns from early-stage firms developing high valued-added core technology. Our process phases are:

1. Deal Flow
2. Evaluation
3. Selection
4. Decision
5. Value Creation
6. Liquidity Planning

These phases provide timely responses to entrepreneurs, ensure quality portfolio companies, and set the stage for our value-added model post-investment.

1. Deal Flow comes from our entrepreneur network, syndication partners, and later stage venture capital firms. These deal flow sources are attracted to us by our ability to perform due diligence and assist portfolio firms in achieving critical time-to-market milestones. Obtaining most of our deal flow from such qualified sources frees up more resources for building portfolio value.

2. Evaluation begins with the introduction of a business plan through one of the members of the our network followed by a face-to-face meeting and subsequent investigation. We assesses the strength and completeness of the team, the company's technology, competitive advantage, target market, marketing plan, financial history and projections, and capital needs. The due diligence will include reference checks with customers, industry experts, and management references.

3. Selection is based on input from our Advisory Committee and analysis of team industry knowledge, technology development capabilities with a "deep science" orientation, portfolio fit, time-to-market focus, target market sizing and dynamics, competitive landscape and entry points, capitalization table, revenue projections and sales cycles, and recruiting capability.

4. Decision rests on discussions on perceived valuation, roles of both current and potential co-investors, and deal terms. A unanimous decision by the managing members is required to proceed with each investment.

5. Value Creation is achieved by assisting the portfolio company's management team in implementing and utilizing methodologies that manage and monitor time-to-market strategies using proven process models. Important ingredients in these models are a strong emphasis on early and frequent customer involvement in product development, concentration on differentiators, and recruitment of key contributors (advisors, executives, strategic partners).

6. Liquidity Planning is approached as a continuous process integral with value creation that provides multiple options. All management decisions are analyzed for strategic impact on liquidity paths with the intent of maximizing investor returns

Saturday, February 25, 2006

Analytics outsourcing - emerging models in India

The Indian Industry has witnessed a growth in the amount of Clinical Trial Data over the last decade. The success of the IT industry in India has instilled confidence amongst CROs and the Pharma companies to venture into various models of data management outsourcing. Some CROs have created data management infrastructure to provide a basket of services as a preferred full-service provider including clinical trial and data management.

Big CROs offer their Indian counterparts to use their global server, software and other infrastructure with addition of user licenses to extend their data management business. Hence they can have cost-saving on few hardware and software to start the data mangement business. These CROs also offer stand-alone data management services.

Another model that is becoming popular for a few selected pharma companies in India is the retained Full Time Equivalent (FTE) Model. In this model, the pharma companies outsource the job of developing the facility, offices and human resources (FTEs) [ Statistical Programmer, Statistician, Data Viewer, DB Designer and Medical Writer } to a service provider, who could be a CRO or an IT company with the understanding of the Clinical Trial Data Mangement and Biostatistics business.

The Pharma Companies provide hardware, software and arrange for their installation and training. This model is essentially an extension to the contract staffing model as the service provider provdes the office and manpower both. This model promises the vendor to act as a Functional Service Provider (FSP) on project / protocol basis after certain pre-decided years.

This model demands a lot of initial investment and provides an opportunity for the local service provider to learn tricks of the data management business besides promisiing a lot of future core business as an outsourcing partner. Main competitors in this kind of business models are the local CROs and ITES companies who plan to diversify into data mangement segment.

With India emerging as IT superpower and Clinical Trial Hub, outsourcing to India for Clinical Data Management is more obvious than predicted. The Indian Industry, which earlier relied on its cost effectiveness to attract customers, is now moving towards an entirely different direction. Quality and fast response are the new buzzwords to dominate the business processes which ensure accurate, reliable services to the customers. While several models of businesses are emerging, only results will tell how many of them are attaining fast break-even after meeting stringent global regulatory standards. The time will test the success of experimentation of each of these players, who cross the critical path with proactive risk mangement approach in this world of innovations and new technology. The layers meeting the industry expectations of increased adoption of global standards, regulatory compliances and pressures of cost and cycle time reductions in drug development, with an efficient and effective data mangement system will survive.

The author is a career Venture Capital consultant for early / late stage enterprises specialising in Analytics Outsourcing / Clinical Trial Ventures and can be contacted thro email kmonyb at gmail dot com.