Scaling in the US

In collaboration with Silicon Valley Bank and Penningtons Manches Cooper, Bailey Fisher hosted discussion focusing on the potential challenges and opportunities of scaling a growing healthcare business in the US. We were joined by Nigel Pitchford, Kym Denny and Paul Kinnon, who generously shared their hard-won experience as our expert speakers.  Key considerations from the discussion are summarised below:

Ensure you really understand commercialised healthcare

The US healthcare market is vastly different to that of the UK. It’s an obvious point, but it’s crucially important to understand how this system works, as it is not necessarily intuitive. The differences are numerous, however perhaps most important is an understanding of the payer model, and therefore who exerts the real influence when driving new technologies into practice; unlike the UK, healthcare in the US is ultimately paid for by employers and insurers, and it is therefore these parties who exert this influence, over and above the doctors and medical specialists themselves.

Strongly consider US VC involvement, but be realistic about what they can bring

In addition to the obvious differences between the US and UK healthcare markets, there are a host of more subtle nuances to be navigated as you grow. It is worth seeking investment from US VCs who have a more inherent understanding of the market and local knowledge networks, in addition to any US headcount you may choose to employ. British VCs will support this strategy, as the advantages are many and obvious, though ensure you remain realistic in your expectations; you will likely be entering unchartered territory with new technologies, and even local experts will be learning as they go. Be prepared to pivot, and adapt your strategy as appropriate.

Be ambitious, believe in the opportunity, and don’t be afraid of failure

An oft-quoted difference between US and UK VC funding is the sheer size of investment rounds. Whereas the UK mindset is more cautious, with local market opportunity restricted by the NHS’ own modest budgets, the nature of the US healthcare market means the commercial opportunities are huge, and US VCs therefore expect significant exit values, and early investment rounds to be aligned to this potential. US VCs expect to see boundless ambition, unwavering self-belief, and commitment to a US strategy, in addition to a clear commercial proposition. This ambition relates to both investment requirements and growth plans, so be bold in your attitudes.

Understand your value proposition, and communicate this early across all stakeholders

US VCs will be expecting significant exit potential if they are to fund your plans to expand, and as such their key interest will be your commercial plan and value proposition, rather than the science underpinning your product. However, the importance of this value proposition (essentially why customers will choose your product or service over others) extends beyond securing funding; the message needs to be clear and understood by all stakeholders (investors, payers, end-users, KOLs, patients, employees) as early as possible, and will require constant review and fine-tuning. This commercial value must sit at the heart of your strategy, and be understood across your organisation, as it is ultimately what will define your growth and success.

Know the key opinion leaders in your space, build relationship with them, and leverage them
Identifying and engaging with the US-based key opinion leaders in your space will be crucial to your company’s success, beyond simply providing guidance around market and product strategy; they are an additional guide through the intricacies of the US healthcare system, and are often the lynchpins linking the various relevant facets of your market; from payers (employers/insurers) to doctors to regulators and beyond, their influence will play a key part in your growth and success, so these relationships have to be a priority.

When the timing is right, consider relocating

Whilst a small local workforce is an important first step in growing your company in the US, the sheer size of commercial opportunity means that this may well become your most important market, and a time will likely come when it is worth considering relocating your company HQ stateside. Whilst smaller enterprises can be managed successfully from any location, a business that is scaling in such a key location will soon require more immediate and frequent access to a host of local resources, and positioning decision-making nearby is an obvious benefit; with rich technical, commercial and management talent pools, world leading technical authorities and knowledge networks, experienced and diverse investors, and significantly greater commercial opportunity, the advantages of a US-based HQ are numerous. The trick, however, is knowing the right moment to make the move!

Discussion took place as part of Bailey Fisher’s Leadership Series of events for executives in the entrepreneurial growth market.  The dinner was hosted by James Houlder, Director at Bailey Fisher.

Bailey Fisher hosted local business owners from across the East Anglian region to discuss the importance of employee engagement and retention as a crucial part of a company’s hiring strategy.

Inevitably, what constitutes employee engagement differs from business to business, and around the table it was apparent that investment was being made into a variety of objectives to offer a better employment experience. Training and development was a consistent theme, as was the opportunity to participate in charitable endeavour; clear and consistent leadership, direction and a sense of worth.

Business owners can of course benefit hugely from a happy and motivated workforce. Research shows that 39% of employees work harder if they are happy, and highly engaged employees are 87% less likely to leave than their less engaged counterparts. A challenge for the future appears to be understanding how to motivate current and future generations of workers where salary is already being seen as insufficient in itself to attract and retain talent. Workplace culture assumes greater importance, as does more frequent questioning of a business’s carbon footprint, its approach to flexible working and uptake of disruptive technologies. There is already a greater understanding and acceptance that people will change roles and careers more regularly, and this makes the case for having a strong sense of engagement and retention policies ever more important.

Our thanks go to Ian White, CEO of Beckett Investment Management, for initiating discussion, and to our event partners Peter Gale and Ellie Newell of C. Hoare & Co and Richard Lane of Farrer & Co.

Discussion took place at the Private Markets Dinner, part of Bailey Fisher’s Leadership Series.

With our focus on supporting earlier stage, high growth companies, we often discuss senior hiring plans with first-time executives, for whom a Retained Search is a new and perhaps unknown process.  This is often weighed against other, more immediate options, which can appear more attractive from both a cost and a timescale perspective.

So why choose a Retained Search process over other options?

The key benefits are numerous, however the following points stand out:

  1. Specific Targeting – a business’ product, market and proposed strategy often mean a very specific blend of skills and experience is required in an Executive’s background, and it is likely the candidate pool is both geographically dispersed and somewhat limited. In addition to helping define and better understand your role’s requirements, a retained search process will employ dedicated research resources to analyse hiring markets in depth, and ensure all relevant talent is identified, targeted and considered. Whilst this seems obvious, this is not always appreciated when comparing against other approaches.
  2. Candidate Visibility and Availability – a common theme among high-performing Executives is that they are usually well employed in stimulating, exciting and well-rewarded positions, at the forefront of their markets, where they are both professionally and emotionally invested in the business’ future plans. It is therefore not surprising that A-Grade Executives are rarely actively seeking new opportunities. That said, with relevant opportunities for progression often infrequent, one finds these Executives may be open to discussing something really special, if approached appropriately by a trusted contact. An experienced Search consultant will be able to leverage trusted networks built over many years to ensure these passive candidates are approached discreetly and briefed accordingly.
  3. Expert Consultation Throughout – hiring Senior Executives is not easy, and people are a highly unpredictable commodity; whether it be candidate identification, engagement, assessment or the eventual negotiation, there will always be unforeseen, and often significant, challenges through a recruitment process, and Executives on both sides of the Boardroom Table rightfully expect a professional, knowledgeable and trustworthy Consultant to navigate them through these difficulties. Often, it is the steady hand of the Consultant which ensures a successful outcome, and is a key part of the value-add that a Retained Search process offers.

Whilst there are many further, more subtle benefits to using a Retained Search process, we find that these are the key differentiators, and their value cannot be overstated. The right executive can often be the difference between business success and stagnation, whilst the wrong executive may cause significant and lasting damage. Indeed, the cost of making the wrong hire often far outweighs the cost of the Retained Search process, and as such it is right to consider the approach as an important investment in the future success of a company.

We were pleased to partner with UBS Wealth Management to present a Global Economic Update by Paul Donovan, Global Wealth Management Chief Economist for UBS.

One of the first challenges in trying to understand the economy today is that the quality of economic data is not what it was. Most economic data was designed in the 1930s. The way economic data views the world is not well suited to the changes that are happening today. Patterns of employment are changing. The rise of self-employment, home working, and having multiple jobs confuses data. The difference between investment spending and consumer spending has become blurred. GDP measured a manufacturing based economy very well – it was, after all, designed to help maximise wartime production. It is becoming less and less useful, however, in a more service sector based economy.

The result is that we have to be careful in being too precise about economies. The broad trends are probably correct, but the details are almost certainly not.   There are, nonetheless, trends that we see emerging today. The trend of ever more trade taxes from the United States has upset the global trade system. Trade taxes hurt listed companies more than they hurt the wider economy, because the overwhelming majority of global trade is conducted inside companies (moving goods from subsidiary to subsidiary).

Trade taxes are also more damaging to investment than to the consumer. This is because investment goods form a disproportionately large part of global trade. Trade taxes are thus a disproportionate tax on investment. It is also because the uncertainty around global supply chains seems to be causing companies to rethink their investment plans. So far, this has not really been noticed by the consumer. The investment slowdown is causing a global economic slowdown. Only if this spills over into labour markets and the consumer would a recession be threatened.

More on these and other topics can be found at ubs.com/pauldonovan – where you can also sign up for the daily podcast covering the key economic issues.

Paul Donovan spoke at Bailey Fisher’s Leadership Series event in partnership with UBS Wealth Management.  The event was attended by CFOs from UK-based growth technology businesses.

Bailey Fisher has enjoyed a successful year under its new management team, following an MBO in 2018.  The Cambridge-based executive search experts have seen continued growth and increased headcount, with Toby Young returning to lead the Technology Practice and the recruitment of Danielle Grant to focus on Finance & Operational hires.

Bailey Fisher came under new management last year when Managing Director Andrew Moore led a succession buyout to secure the long-term development of the business. Andrew says: “Bailey Fisher continues to be a fundamental part of the Cambridge cluster and the UK technology sector, supporting innovative businesses with their growth strategies. Over the past 12 months we’ve worked with some of the most disruptive tech businesses, attracting C-suite executives who have had a fundamental impact on business success.  We’ve also continued to support growing businesses regionally with operational and leadership hires.  I look forward to seeing further growth in the future. The amount of investment into Seed/Series A tech companies is exciting to see, and of course, the importance of high quality leadership teams remains vital.”

Founded in 1998, Bailey Fisher established a reputation as executive search experts building boards and leadership teams for growth companies in the Cambridge technology cluster and the wider UK entrepreneurial market. Based in Cambridge with offices in London, Bailey Fisher specialises in C-suite hires for growth businesses across Technology, Life Sciences and Industrials.  Recently, the firm rebranded and launched a new website at www.baileyfisher.com  

Bailey Fisher Executive Search is an independent executive search firm based in Cambridge.  We specialise in finding and attracting individuals who have a fundamental impact on successful business growth.

Founded in 1998, we thrive in the fast-paced environment of one of the world’s most exciting technology and biotechnology clusters.  We’re proud of the role that we’ve played in the growth of the Cambridge cluster over the past 21 years, by building boards and leadership teams for many of Cambridge’s most innovative businesses.  Our focus remains firmly on the Cambridge cluster, but we go well beyond our home and technology and have supported the growth of some of the most successful companies to have emerged from the UK entrepreneurial market.

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We make impactful hires for innovative companies. Whether seeking a CEO for a venture backed start up; CFO for a future fundraise; commercial leader for an ambitious scale up or technology lead for an innovative corporate, our clients share a focus on growth.

We hire across the C-suite in our specialist sectors: Technology, Life Sciences and Industrials. Partnering with our clients, we take the time to understand their challenges and ambitions so that we may introduce the right individuals to give strategic advantage.

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Andrew Moore & Toby Young were pleased to host our latest Leadership Dinner for Chair/NEDs ‘Seed, Series A & Beyond’.

It was clear from the evening’s discussion that there are concerns surrounding the availability of liquidity. The opportunity to use AIM no longer seems to be a viable option for the UK’s early stage tech sector. Perhaps the sweet spot for entry has changed to reflect a slightly more mature business type.

Private Equity continues to provide an alternative route for those with profitable growth, but it is the Series A to C companies that see the greatest challenge in securing funding to accelerate. There is a lot of money available but not from the traditional sources.  You need to look far and wide and at what price?

As an interesting anecdote, views as to the role of a Founder / CEO post-investment differ widely. For the majority, the strength of the team continues to be one of the key factors in deciding on investment. For others, however, there seemed to be little patience for those who fail to meet the demands of new investors and are unable to drive growth as quickly as expected. Thanks to our co-hosts Silicon Valley Bank & Taylor Vinters and our guests for sharing their experiences and insight.

 

Our Technology Leadership Dinner is a peer-to-peer forum for CEOs and other C-suite leaders from across the growth technology sector to meet for an informal dinner and discussion on a topical issue.

The Technology Leadership Dinner is hosted by Bailey Fisher in partnership with Mills & Reeve and Grant Thornton.

We were delighted to welcome Martin Frost as guest speaker for our most recent Technology Leadership Dinner. Martin is CEO of robotics pioneer CMR Surgical, the latest Cambridge company to achieve unicorn status following a $240m Series C round in 2019. The Series C funding is Europe’s largest private financing round to date for a medical technology business, and will fund CMR Surgical’s global commercial scale up.  Martin shared the challenges and successes of the journey so far with CMR Surgical.

Attendance at the Technology Leadership Series is by invitation for CEOs and other C-suite leaders in the growth technology space. If you are interested in finding out more about future events, please contact Helen Poole or Kerry Linsey.

We are delighted that Martin Frost will be joining us as guest speaker for our next Technology Leadership Dinner.

Martin is CEO of pioneering medical robotics business, CMR Surgical, the latest Cambridge company to achieve unicorn status following a recent $240m Series C round.  The Series C funding is Europe’s largest private financing round to date for a medical technology business, and will fund CMR Surgical’s continued global commercial scale up.

Martin will join us in Cambridge on 12 November to share his insights into leading a business through rapid global expansion.  The dinner is the latest in Bailey Fisher’s Leadership Series of events for business leaders of growth technology businesses.  This event is hosted in partnership with Mills & Reeve and Grant Thornton, and will be attended by CEOs and other C-suite leaders from the Cambridge cluster and wider UK technology sector.

Attendance at this event is by invitation.  If you are interested in finding out more, please contact Helen Poole or Toby Young at Bailey Fisher.

The latest in our series of Life Sciences Leadership Dinners explored the potential challenges and opportunities of scaling a growing healthcare business in the US.   This event was hosted in partnership with Penningtons Manches Cooper and Silicon Valley Bank.

Our guest speakers – Nigel Pitchford, Kym Denny & Paul Kinnon – initiated lively discussion on a diverse range of considerations:

Ensure you really understand commercialised healthcare
The US healthcare market is vastly different to that of the UK. It’s an obvious point, but it’s crucially important to understand how this system works, as it is not necessarily intuitive. The differences are numerous, however perhaps most important is an understanding of the payer model, and therefore who exerts the real influence when driving new technologies into practice; unlike the UK, healthcare in the US is ultimately paid for by employers and insurers, and it is therefore these parties who exert this influence, over and above the doctors and medical specialists themselves.

Strongly consider US VC involvement, but be realistic about what they can bring
In addition to the obvious differences between the US and UK healthcare markets, there are a host of more subtle nuances to be navigated as you grow. It is worth seeking investment from US VCs who have a more inherent understanding of the market and local knowledge networks, in addition to any US headcount you may choose to employ. British VCs will support this strategy, as the advantages are many and obvious, though ensure you remain realistic in your expectations; you will likely be entering unchartered territory with new technologies, and even local experts will be learning as they go. Be prepared to pivot, and adapt your strategy as appropriate.

Be ambitious, believe in the opportunity, and don’t be afraid of failure
An oft-quoted difference between US and UK VC funding is the sheer size of investment rounds. Whereas the UK mindset is more cautious, with local market opportunity restricted by the NHS’ own modest budgets, the nature of the US healthcare market means the commercial opportunities are huge, and US VCs therefore expect significant exit values, and early investment rounds to be aligned to this potential. US VCs expect to see boundless ambition, unwavering self-belief, and commitment to a US strategy, in addition to a clear commercial proposition. This ambition relates to both investment requirements and growth plans, so be bold in your attitudes.

Understand your value proposition, and communicate this early across all stakeholders
US VCs will be expecting significant exit potential if they are to fund your plans to expand, and as such their key interest will be your commercial plan and value proposition, rather than the science underpinning your product. However, the importance of this value proposition (essentially why customers will choose your product or service over others) extends beyond securing funding; the message needs to be clear and understood by all stakeholders (investors, payers, end-users, KOLs, patients, employees) as early as possible, and will require constant review and fine-tuning. This commercial value must sit at the heart of your strategy, and be understood across your organisation, as it is ultimately what will define your growth and success.

Know the key opinion leaders in your space, build relationship with them, and leverage them
Identifying and engaging with the US-based key opinion leaders in your space will be crucial to your company’s success, beyond simply providing guidance around market and product strategy; they are an additional guide through the intricacies of the US healthcare system, and are often the lynchpins linking the various relevant facets of your market; from payers (employers/insurers) to doctors to regulators and beyond, their influence will play a key part in your growth and success, so these relationships have to be a priority.

When the timing is right, consider relocating
Whilst a small local workforce is an important first step in growing your company in the US, the sheer size of commercial opportunity means that this may well become your most important market, and a time will likely come when it is worth considering relocating your company HQ stateside. Whilst smaller enterprises can be managed successfully from any location, a business that is scaling in such a key location will soon require more immediate and frequent access to a host of local resources, and positioning decision-making nearby is an obvious benefit; with rich technical, commercial and management talent pools, world leading technical authorities and knowledge networks, experienced and diverse investors, and significantly greater commercial opportunity, the advantages of a US-based HQ are numerous. The trick, however, is knowing the right moment to make the move!

Attendance at the Life Sciences Leadership Series is by invitation for C-suite executives from high-growth Life Sciences & Health Technology businesses. If you are interested in finding out more about future events, please contact Iain Hopper or Kerry Linsey.