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For this edition of Pitch Deck Teardown , I figured I ’d test something new : We ’re taking a close flavor atthe CancerVAX campaignon the equity crowdfunding platform , StartEngine .
The team did n’t invite me to review the campaign or the sales pitch , I do n’t cognize much about cancer intervention , and I do n’t know and have n’t spoken to the squad ’s founders . Still , a general treatment for all cancers ? That’sgotto be worth a second smell . It ’s also a majuscule opportunity to walk you through the thought procedure of an investor .
Two green flags
First off , let ’s take a face at what really works about the ship’s company ’s pitch .
A complex topic made accessible
It ’s clean the CancerVAX team has some serious storytelling chop . Here ’s the main telecasting pitch for this campaign in which the company ’s CEO , Ryan Davies , explain what they ’re working on :
A pitch for a cancer vaccinum can very easily work into a cavalcade of technical language and complex science . I commend the CancerVAX team for making a staggeringly complex topic extremely approachable , even for the great unwashed who do n’t really know what genus Cancer is or how it works .
It ’s also worth observe that the caller hasan earlier version of this pitchon its YouTube transmission channel . do it to say , I ’m happy CancerVAX hired someone with a enough camera because the video embedded above is significantly better .
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Powerful, emotive storytelling
In the pitch video above , Davies plays one of the most powerful batting order known to storytelling : Make a fib strike close to home . It ’s comfortable to encourage your consultation to empathize with a single category who has lost their four - year - old son in a hail of bullets than it is to goad them to take over the disaster that 3,500 baby have died in a battle .
“ I have six daughter , and two Logos . Applying these same statistics to my family , one of my sons and two of my daughter will get some form of cancer in their lifespan . And another personal Federal Reserve note , my Father of the Church dumbfound cancer at the age of 47 , ” he says , drawing us into the narrative . “ That was scary . My married woman ’s father become cancer in his early 70s . And my granddad died from cancer . I ’m guessing that you probably know someone that has Crab , too . This is a disease that truly affects all of us . ”
I would argue that perhaps the society is laying it on a bit chummy — there ’s a slender line between rousing storytelling and worked up manipulation — but it ’s refreshing to see someone who is n’t afraid to really go into the tale . Very well done .
As a inauguration , you could apply this deterrent example to intend about how you could make your own story feel “ real ” and impactful .
Four red flags
CancerVAX has a lot of things going for it . From a journalist and investor linear perspective , though , the political campaign raises some pretty serious enquiry . Specifically , there are three major issues that would dissuade me from vest in this movement : the squad , the applied science , and the same red pin that the investment residential area saw with Theranos . . . .
Where are the life science investors?
Theranos raise a god - awful amount of money , but if you looked at its cap board , you ’d see that one category of investor stayed far off from the troupe : health tech and life sciences investor . That should have been a pretty serious red-faced flag for anyone else view drop a line a check for the ship’s company : If the experts do n’t see an investment funds opportunity , why would the Renaissance man investors ?
Now , let me be clear : I ’m not say that CancerVAX is in any elbow room fraudulent or a scam . I am only point out that it’sreallyweird to see something as bass tech and specialized as a vaccine for genus Cancer turn up on a crowdfunding site . The team does n’t say why it chose to crowdfund the task , but from the venture Das Kapital perspective , choosing to raise money via crowdfunding is a pretty serious ruddy flag : It ’s generally the option you take when everything else has flunk . It ’s the route you go down when angels back forth , the institutional investors wo n’t go near your company , and grant funding has failed to materialize .
Do n’t get me wrong . There are many good crowdfunding campaign out there , but most lean to be in field that are more accessible to the general population . Cutting - edge cancer enquiry is n’t that .
This red flag gets an additional shade of maroon when you look atDavies ’ LinkedInand his past companies in biotech and life sciences . He was the chief executive officer of Curza for 7 years , and according to PitchBook , the society raised around $ 10 million , including investment funds and grants from the American Cancer Society , Harvard Medical School , the National Institutes of Health , the U.S. Department of Veterans Affairs , Carb - X , andNovo Holdings .
So , if Davy has raised from what seem to be the “ right ” sort of investor in the past times , why did n’t any of these investor stick out in this metre around ?
It’s all about the team
The StartEngine campaign posit that Davies “ co - constitute several biotech companies / engineering , let in a nitric oxide topical wound - care intersection , a medical gadget party ( drug manner of speaking organization ) , and an antibiotic development company . ” Curiously , two of these society are not named , nor are they listed on his LinkedIn .
Since 1996 , Sir Humphrey Davy does n’t appear to have any gap in his résumé when he might have started the wound - care society or the aesculapian gadget company , which is a bit of a red flag all by itself . If I were doing due industriousness for an investment in CancerVAX , I ’d be curious what these companies were , when they were establish , who invested in them and what befall to them .
According to PitchBook , CancerVAX fire a $ 2 million round from undisclosed investor in March 2021 . Curiously , the person at CancerVAX who was associated with the investment funds is Lindsay Mann . It turns out thatMann is the original founder of CancerVAX , but he officially resigned in former August 2021,according to SEC filings . Mann does n’t name CancerVAX onhis LinkedIn visibility .
Of course , there could be many innocent reasons for why this is the suit , but If I were doing due diligence on the investing , I ’d have some question about why someone plant a company and then left five month later .
I aman enthusiastic advocate of founders paying themselvesif they ’ve raised venture capital letter . Data from Kruze Consulting suggests that chief executive officer wages in seed - stage biotech / drug company startups with $ 2 million in fundingrange from $ 110,000 to $ 197,000a year , with the median salary being $ 153,000 . If I were doing due diligence on an investiture in CancerVAX , I ’d be curious why it is paying its raw CEO $ 277,000 per year — almost double the median salary at similar companies at this degree .
Why did nobody invest yet?
It ’s not entirely exonerated when the StartEngine crusade was launched . The original pitch video was upload on YouTube on August 4 , but it ’s unlisted , so it ’s potential that the campaign plunge afterwards .
Now , usually I ’m not big on the whole “ wisdom of the crowd ” affair — I ’m in particular irked by investor who otherwise lead round but say , “ derive back when you have a lead investor . ” Still , as I save this , CancerVAX has successfully raised just shy of $ 643,690 with a calendar week left to go on the campaign . It appears to have raise an average of $ 1,324 from its 486 investors .
In other Word of God , CancerVAX has only give about 6 % of its fundraising end . Unless something striking happens over the next few Clarence Day , that ’s a vast risk to the society : If you postulate $ 10 million , half a million is n’t going to get you anywhere close to where you need to go .
at last , let ’s babble valuations . I do n’t work with many biotech startups in my consulting practice , so I do n’t have an nonrational sense of the valuation in biotechnology . But we do havePitchBook : I look at investment datum for biotech and pharma companies that raised between $ 8 million and $ 12 million in the past three years . For the 750 or so deals listed , the median valuation was $ 25 million .
I will leave it to you to visualise out whether the $ 61 million evaluation CancerVAX is using on its StartEngine drive is reasonable .
What about the tech?
I ’m not run to say a lot about the technology involved , because I ’m utterly incompetent to . What I will say , however , is that throughout the effort , the company says it is “ partnering with experienced genus Cancer research mental hospital , like UCLA , ” but does n’t name any of the researchers it is act upon with .
On the subject of technology , in the auction pitch video , Davies says , “ We ’ve now filed three patents . We ’ll uphold to charge many more . ” It turns out that those are provisional patents that have n’t been granted yet . The effect is that provisionary patents are n’t public and it ’s hard to ascertain how good or meaningful the patent portfolio is . Of course , provisionary patents do have time value , but I ’m rummy how many of StartEngine ’s investor are fully aware of the difference between a provisionary and a granted patent of invention .
I do praise CancerVAX for its simplicity , but there is little specific information about the engineering science it is build up to figure out whether it ’s practicable at all .
Conclusion
It hurt me to write this : The construct of a cancer “ vaccine ” ( it is n’t a vaccine ; it ’s a treatment , not a contraceptive equipment ) is improbably compelling . A act of people close to me are in Cancer the Crab treatment . Some very skinny friends have yield to cancer . I want the disease to be wiped off the face of the earth and I so very desperately want to believe .
However .
The red masthead are waving brightly in the twist , and as an angel investor , I ’d need to do some thick app to figure out whether there ’s a skillful chance of success . The risks are stratospheric and many - layered : team , technology , business model , and market to begin with .
On the other hired hand , if the team pulls off the Holy Grail and somehow achieve what no one else has been able to do in the chronicle of cancer research , CancerVAX will be an extraordinarily worthful company .
I ’m all for diversity of enquiry , and the company ’s half - million - one dollar bill research labor with UCLA is undoubtedly interesting ( even thoughPfizer just throw away $ 43 billionon Cancer the Crab research ) . From CancerVAX ’s pitch , it ’s hard to see what the company brings to the table that is n’t already being try elsewhere .
The choice of crowdfunding over traditional life science investor , the shadowy item about the team ’s past ventures , the departure of the original founder , and the CEO ’s seemingly high earnings are all touch on . What ’s more , the company ’s inability to hit even a tenth of its fundraising end , heighten by the lack of clarity around its technology and partnerships , add to my reservations .
While the story is emotionally engage and the pitch is well - demo , I ’m confident these takings would heighten too many questions for an investor to back this venture confidently .
