Thanks to the teams at Starburst Aerospace, NASA’s Human Research Program, the Translational Research Institute for Space Health (TRISH), Methuselah Foundation, and Microsoft Federal for hosting me to lead the inaugural Space-H Space Health Accelerator cohort in a workshop on the nuances of Business Innovation Value Proposition Pitching. A few notes from our engaging session:

Workshop Summary¹

Jeffrey Donenfeld, an experienced investor and business strategist, presented insights on venture capital financing and investor relations to a group of early-stage startup representatives. The presentation covered the venture capital financing lifecycle, effective communication of value propositions, and strategies for navigating investor relationships. Donenfeld emphasized the importance of articulating clear value propositions, understanding market positioning, and maintaining regular investor communications. The session also included discussions on various funding sources, including non-dilutive options, and the pros and cons of different financing strategies for startups at various stages of growth.

Introduction and background of Jeffrey Donenfeld

• Jeffrey Donenfeld introduced himself as a lifelong technologist and science enthusiast, as well as a business and venture investing strategist, focusing on building the future of humanity through technology and business innovation.
• Donenfeld shared his experience working with the National Science Foundation in Antarctica at the South Pole, where he served as an EMT in the medical clinic and helped build scientific instruments including a neutrino telescope and a microwave telescope.
• Prior to starting Echo Mesa and consulting, Donenfeld was the Investment Director at Boomtown Accelerators in Boulder, where he managed deal flow and investment funnel for 12 different accelerators, made about 120 investments, and built a portfolio worth approximately $500 million.
• Donenfeld emphasized his extensive experience in evaluating pitches, from reading applications to conducting initial interviews and making final investment decisions with executive boards.

Goals and structure of the presentation

• The main goal of the presentation was to provide insights on presenting to future investors, business partners, and network contacts, aiming to help attendees carry conversations forward effectively.
• The presentation was structured into three main sections: 1) Understanding general positioning within the US Venture landscape, 2) Demonstrating value proposition, and 3) Assessing fundraising options and fundraising value proposition.
• The final part of the presentation focused on building an effective pitch for investors and network contacts, synthesizing the information from the previous sections.
• Donenfeld offered to provide access to his AI notes on Fellow, a collaborative note-taking platform, and promised to share a PDF version of the presentation deck with attendees for later reference.

Navigating the Gartner Hype Cycle and AI in healthcare

• Jayant Menon from Nahlia(?) discussed their work on an autonomous healthcare system for astronauts in deep space, noting that the field of AI in healthcare is currently in the ‘trough of disillusionment’ phase of the Gartner hype cycle.
• The discussion highlighted that economics, rather than technology alone, is a significant driver in healthcare innovation. Menon suggested that the path to enlightenment in AI healthcare applications seems to be extending further with each cycle.
• Jeffrey Donenfeld inquired about Nahlia(?)’s positioning, asking if they consider their product a VR play, an AR play, a health tech play, an AI play, or an EdTech play, highlighting the multifaceted nature of their autonomous healthcare system for emergency situations.
• Donenfeld suggested that incorporating different technologies at various points in the hype cycle could help keep a company on a high wave while navigating through low troughs.
• Gartner’s specific hype cycles for various industries, including a health tech hype cycle for US healthcare payers in 2024, were mentioned as useful tools for setting business development goals and understanding positioning for talking to payers.

Effective Communication of Value Proposition

• Jeffrey Donenfeld emphasized the importance of being able to streamline and slim down the company’s value proposition for efficient communication in conversations and written materials.
• The Heilmeier Catechism, a tool used by DARPA, was introduced as a method for communicating a company’s value. It includes questions about what the company is trying to do, how it’s done today, the new approach, who cares, risks, costs, timeline, and how success will be measured.
• A distilled version of the value proposition was presented, focusing on identifying the target customer, providing a solution name or brand description, explaining what it does, and comparing it to the competition.
• Kate Nelson highlighted the importance of differentiation from competition, especially for companies working on bleeding-edge technology where competition might be stealthy or limited.
• Donenfeld emphasized the value of a company demonstrating knowledge of their competition, even in cutting-edge fields where competitors might not be publicly known.

Company value propositions and product discussions

• Nanotics’ value proposition was discussed, highlighting their platform technology that depletes targets from blood rather than adding molecules. They target ‘undruggable’ targets and offer better therapeutic index compared to conventional drugs, addressing limitations of antibody drugs.
• Nanotics is developing solutions for cancer, sepsis, cardiovascular disease, and neurodegenerative diseases. They have 38 granted patents on their technology, which intervenes at the information level rather than the cellular level.
• Innsightful presented their mental health solution for organizations, which leverages wearable technology and AI to track mental health symptoms and deliver just-in-time therapy. Their solution provides real-time monitoring of symptoms and identifies the most effective interventions.
• The discussion touched on the use of generative AI, autonomous agents, and digital twins in healthcare, focusing on how these technologies can assist in austere situations where an expert needs to know the next step.

Venture capital financing lifecycle and funding sources

• Jeffrey Donenfeld presented the venture capital financing lifecycle, illustrating different stages from discovery to exit and tracking who companies should be raising money from at each stage.
• Special Purpose Vehicles (SPVs) were highlighted as an increasingly popular tool for venture funds and companies to limit liability and market exposure. The pros and cons of using SPVs for early-stage funding were discussed, considering the cost (around $8,000-$10,000) relative to the amount being raised and the company’s valuation.
• Investment syndicates were discussed as another funding option, with Denver Angels mentioned as an example using a syndicate model to identify opportunities and raise funds from their network of investors on a per-investment basis.
• Non-dilutive funding sources were discussed, including SBIR and STTR grants for early-stage companies, as well as municipal and city grants. Various funding sources for manufacturing and delivery were mentioned, including Department of Defense (DoD) grants, DARPA(?), Defense Innovation Unit (DIU), and the Office of Strategic Capital (OSC).
• Family offices and family funds were discussed as potential funding sources, typically fitting between seed and Series A funding, but their placement can vary depending on the amount of funding provided.

Investor Relations and Communication Strategies

• Mahmoud Zubaidi from Gattaco(?) expressed concerns about investor questions regarding traction, noting that investors seem to be focusing more on advanced companies and less on early or risky ventures.
• Jeffrey Donenfeld advised that while traction isn’t always necessary, startups need to articulate how they plan to gain traction and demonstrate viability. He emphasized the importance of showing deep market awareness, understanding past failures in the industry, and explaining how the company plans to succeed.
• Donenfeld suggested using the ‘Halmark hashism(?)’ approach, which involves outlining midterm and final exams to check for success. He recommended breaking down the roadmap into clear, achievable steps and being transparent about progress and challenges.
• The importance of regular investor updates was highlighted. Donenfeld mentioned that some startups use Notion to streamline these updates, providing timelines, roadmaps, and honest assessments of progress, including areas where they might be behind schedule.
• Louis Hawthorne shared that their company, which has 30 investors on the cap table, uses a quarterly newsletter called ‘nanot News’ to keep investors informed and satisfied.
• Donenfeld encouraged attendees to connect with him on LinkedIn and offered to make introductions within his network, requesting that any introduction requests be well-researched and relevant to ensure high-quality connections.

1. Summaries and notes generated by Fellow.app AI NoteTaker ↩︎