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June 16, 2011

Great Expectations for Angel Investors

By Spear's

Ingenious medical inventions and Great Expectations took centre stage at the second Beer and Partners investment fair of 2011 on Tuesday

by Mark Nayler

Ingenious medical inventions and Great Expectations took centre stage at the second Beer and Partners investment fair of 2011 on Tuesday.

According to Beer and Partners’ chief executive Michael Weaver, a ‘massive market’ presently exists for new inventions and developments in medicine. In order to take full advantage of this, Beer have brought together six of their associates to form a Life Sciences team. Given that they are preaching to the converted, their task shouldn’t be too difficult: over a thousand of the 1,800 investors currently on Beers’ books have invested in life sciences projects.

The biggest challenge in securing investment for a theatre production is convincing people they would be backing a money-making commercial business: ‘After all, it’s not show-nice or show-fair. It’s show business.’

Typically, they make investments of around £40,000: this is lower than Beers’ investors average of £100,000 but life sciences investors, says Weaver, tend to have a ‘more portfolio approach’, supporting several projects simultaneously.

The seven life sciences companies that had stalls at Tuesday’s fair are currently trying to break into a market that is not unfamiliar to Weaver himself: pre-Beer, he tried to launch a drug delivery device to enable medicine to be absorbed directly through the alveoli, thus increasing its effectiveness. The science was ingenious and the project was greeted with enthusiasm by surgeons at St Bartholomew’s Hospital.

There was just one small snag: the pressure that would be necessary upon inhalation, the experts pointed out, would ‘blow the back of your head off’. The story illustrates the importance of understanding your product inside-out, says Weaver – and many life sciences investors have scientific professional backgrounds. But just as important is understanding the market.

It’s a market that has huge potential for rapid scalability and returns, said Andrew Newell, managing director of Cipher Surgical, one of the life sciences companies to have a stand at Tuesday’s fair. Cipher’s invention is designed to solve a niggling problem for practitioners of keyhole surgery: currently, the only way to clean a laparoscope lens during a procedure is to take it out and give it a scrub. It is a disruptive and time consuming necessity that makes it difficult for surgeons to regain their exact position.

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Cipher were seeking £450,000 to launch a device that cleans the lens during surgery, and have already received considerable interest from investors who are attracted by the ‘easy-to-understand’ nature of the product. They are also attracted, says Newell, by the prospect of significant financial gain: despite hospital budgets being squeezed tight, once a new product is taken on by a few surgeons, the word spreads rapidly, and the returns can be handsome.

And for those looking to boost their spiritual health with a spot of theatre therapy, a production of Great Expectations that reveals the work’s ‘full gothic quality’ is on its way to the West End, due to arrive in late autumn this year. Great Expectations’ producer, Bruce Athol Mackinnon, pointed out that it is the first time the work will be presented in the West End, and it is the first such project that Beer and Partners have taken on.

The biggest challenge in securing investment for a theatre production, said Mackinnon, is convincing people that they would be backing a money-making commercial business and not just having a bit of fun: ‘After all, it’s not show-nice or show-fair. It’s show business.’ Business aside, Mackinnon’s passion for Dickens came across the table in waves – a good thing, considering they need a final injection of £1.3 million to bring their thriller version of a worn-out classic to the London stage.

Due to the level of demand, Beer will be holding three investment fairs this year, rather than the usual two: the final one will be held in November, where the usual range of inventions and investments awaits those browsing for a fresh business challenge.

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