Impact Science supports the process of investment by providing evaluation of the technologies and operations in early-stage companies. We are usually contracted by the target company, but work within guidelines agreed in advance by both the company and the investors. We also provide evaluations of target technologies or products that are subject to partnership and licensing discussions.
A European venture capital (VC) organisation was considering a follow-on investment in one of its portfolio companies, which was developing technology for the pharma industry. Both the VC and the target company wished to establish a fair valuation for the proposed investment, taking into account likely future revenues, and the risks associated with achieving them.
Impact Science worked with the VC to establish the criteria on which the evaluation should be based, and constructed a questionnaire which was directed to relevant staff in the target company. The criteria included: status of programmes; experience and skills of management and staff; strength of IP, and; future plans (with costs and revenues). An Impact Science team conducted a comprehensive site visit and assembled the findings into a document that was shared with both the company and the VC. Based on the findings, we produced recommendations to guide the valuation, and identified critical risks that needed to be addressed through the company’s forward business plans. The recommendations were discussed and accepted in a meeting between Impact Science, the VC and the company’s board. The investment went ahead.