Astek Diagnostics closed a $2 million spherical for its urine diagnostics system, even supposing elevating cash for medtech isn’t for the faint of coronary heart. The corporate’s deck has some great things in it and might be a deep supply for issues we are able to study from, too.
We’re in search of extra distinctive pitch decks to tear down, so if you wish to submit your personal, right here’s how you are able to do that.
Slides on this deck
Astek Diagnostics has a fairly beefy 22-slide deck that splits a number of the narrative over a number of slides. In some elements, the deck is complete and spectacular, nevertheless it additionally comes throughout as fairly defensive and barely dated, although this fundraising spherical closed just lately. Among the slides have been flippantly redacted.
- Cowl slide
- Imaginative and prescient slide
- Platform slide
- Method slide (Half 1)
- Method slide (Half 2)
- Present focus slide (Half 1)
- Present focus slide (Half 2)
- Answer slide
- The way it works slide (Half 1)
- The way it works slide (Half 2)
- Know-how slide
- Crew slide
- Advisory board slide
- Know-how validation testing
- IP overview slide
- Firm validation slide
- Firm timeline slide
- Funding phrases slide
- Industrial and Exit technique
- Comparable transactions slide
- Government abstract
- Closing slide
Three issues to like about Astek Diagnostics’ pitch deck
The place the AD pitch deck is sweet, it’s nice: complete, well-researched and well-designed. Slide 6 — the issue assertion — is a superb instance of all three coming into play.
A complete downside assertion
[Slide 6] An incredible, complete downside assertion. Picture Credit: Astek Diagnostics
Explaining the issue in a pitch deck is essential as a result of it lays the muse for individuals to grasp the need and relevance of your startup. This part ought to captivate the viewers by highlighting a spot or inefficiency available in the market that the corporate goals to deal with. It units the context for your complete presentation, permitting traders to know the magnitude and urgency of the difficulty at hand. Higher nonetheless, explaining the issue successfully helps to validate the market demand for a services or products.
On this slide, Astek takes the chance to current knowledge and insights that again up its declare, thereby reinforcing the potential for progress and success. This part is a startup’s first step in constructing a compelling narrative that aligns its mission with the pursuits and funding objectives of would-be traders.
On this slide, Astek paints an impactful image: big quantities of hospitalizations, pointless remedies, issues with pace and accuracy. Clear up these issues, this slide suggests, and nearly 70,000 lives per 12 months might be saved.
One other factor this slide does properly. It describes the issue, however what’s actually going to make traders lean ahead is the immense proportion of the issue: 8.1 million hospitalizations signifies that there’s a really formidable market dimension at play right here.
Stable defendability
In biotech, an organization is just as useful as the flexibility to guard it, and having an ideal moat is a key a part of constructing a startup for the ages. The truth that the corporate is considering IP safety is reassuring, though I did have some questions on what every of those really imply.
[Slide 15] The authorized moat round Astek is off to a superb begin. Picture Credit: Astek Diagnostics
One query I’ve right here is why the Take a look at Algorithm patent is proven with a publication quantity fairly than the patent quantity; the patent (US11,788,962) was granted in October 2023. The second IP entry — the Fluidic Cartridge patent — is marked as pending, nevertheless it’s obtainable to the general public.
The third one had me flummoxed, so I checked with the group at Run8 Patent Group. They defined that that quantity is neither a patent nor a publication quantity: it’s a provisional patent quantity. We weren’t capable of inform whether or not the patent was transformed to a non-provisional patent, however on the very least, the terminology is complicated right here.
The ultimate entry on this checklist — for a Speedy Cartridge Modification — can also be complicated. It seems that’s a regulation agency docket quantity, which isn’t a lot of an IP safety, and my pleasant patent lawyer buddies inform me that merely saying “submitting in progress” could have been clearer and probably a extra trustworthy description of what’s happening right here.
Simple to grasp (however …)
In slides 9 and 10, the corporate makes it very straightforward to grasp how the system works:
[Slide 9] – The way it works, half 1. Picture Credit: Astek Diagnostics.
[Slide 10] – The way it works, half 2. Picture Credit: Astek Diagnostics.
These two slides do a superb job explaining how a person would use the product. Insert pattern, micro organism are captured, then examined, then you may learn what the machine discovered. From a gross sales perspective — if I had been a purchaser of one in all these machines — that’s an ideal top-level view over how a person would use the machine.
However, from the angle of a shopper, that is how I might anticipate a machine like this to work. If I, a non-medically-trained particular person had been to stroll as much as this machine, I believe I might use it. the expectation of person expertise is so excessive now, that this isn’t an innovation: That is how issues ought to be. In fact, in medical gadgets, person expertise is usually not a excessive precedence, and maybe the benefit of use is a promoting level for the machine, however the way in which these slides are projected, I type of go “Sure, and so what?”
What I’d actually like to have seen right here is context. If all the opposite machines are a lot more durable to make use of, inform that story. If the machine is manner quicker, present that comparability. If there’s a main expertise breakthrough, that is what I might be interested in as an investor.
The product slides shouldn’t present how one can hit the minimal viable person expertise. It’s higher to clarify what it’s concerning the product that makes it particular, defendable and value investing in.
Three issues that Astek Diagnostics might have improved
There have been a number of potential studying alternatives — many greater than I’ve time or area to enter on this pitch deck teardown, however let’s select some takeaways:
Inform the total group story
The group slide has each an excessive amount of and too little info on it.
[Slide 12] Teeming with group members. Picture Credit: Astek Diagnostics
The aim of a group slide is to inform the story of why a group is uniquely positioned to construct this particular firm. As an investor, I don’t notably care about engineers or laptop scientists. The group slide is for highlighting the founding group and senior management, the oldsters which can be trusted to hold this firm via the subsequent few rounds of funding and product improvement. This slide wants extra context to be helpful.
Astek does get partial credit score for together with LinkedIn hyperlinks to every of the group members, however a short description below every identify could be simpler.
Because the firm put hyperlinks to the entire group’s LinkedIn profiles, I went seeking to see what I might discover — and I discovered some yellow flags. Kevin is listed as a co-founder, not as CTO on LinkedIn. His profile reads that he’s “a flexible full stack developer with a background in Chemical Engineering. My experience lies in growing web-based purposes.” In order that’s nice and all, however {hardware} is tough, and medical gadgets are extraordinarily specialised. Having a CTO that appears to haven’t any startup or {hardware} expertise might trigger traders to ask some questions.
Rick is listed as the corporate’s CFO — it’s complicated why an organization elevating $2 million would even want a CFO — however he doesn’t checklist Astek Diagnostics on his LinkedIn in any respect.
On the slide, Scott is listed as the corporate’s chief industrial officer — once more, a wierd function for an organization that doesn’t have a product in market but — however he, too, doesn’t have Astek Diagnostic listed on his LinkedIn. On the intense aspect, he does seem to have related expertise from Particular Diagnostics because the CCO and as a board member of LEX Diagnostics.
In a nutshell, make sure that no matter info you embrace in your slides matches with public info that’s obtainable. If not, prepare for some prickly questions from traders.
Let’s speak concerning the funding spherical …
[Slide 17] That’s a number of redacted knowledge. Picture Credit: Astek Diagnostics
The corporate has one thing happening on its timeline, displaying three rounds of funding, all of them redacted. Placing apart for a second that I’ve by no means heard of a “pre-Collection A” spherical, this, too, raises some flags.
The irony, after all, is that a number of this info is accessible via different knowledge sources. When traders consider whether or not to speak to a startup, they use no matter info obtainable to see the standing of the corporate. On this case, I regarded the corporate up on PitchBook and Crunchbase.
Crunchbase “is aware of” about three rounds of funding. Picture Credit: Crunchbase
Crunchbase tracked a $125k pre-seed spherical, a $256k grant led by the NSF (which seems to be $275k), and a $2 million seed spherical led by Wexford Scitech enterprise fund, which was reported in June 2023.
Pitchbook has a bunch extra info:
PitchBook reveals an enormous quantity of details about firm financials in its database. Picture Credit: PitchBook
All of that’s to say that I’m not completely positive why the corporate determined to redact this a part of the pitch deck, for the reason that info is so simply gathered from public sources.
What worries me extra, nonetheless, is the subsequent slide:
[Slide 18] This slide will not be solely superfluous, it’s probably a crimson flag. Picture Credit: Astek Diagnostics
There’s a number of issues to fret about on this slide: Elevating an quantity to “get to Collection A goal milestones” helps reply why the corporate wrote “pre-Collection A” within the earlier slides: It’s a bridge spherical. That might imply two issues:
- The corporate wasn’t clear on what it wanted to do to have the ability to increase a Collection A.
- The corporate didn’t hit the objectives for its Collection A.
Within the case of the primary possibility, that signifies that the founders didn’t have a superb roadmap for what it wanted to perform to be able to increase its subsequent spherical. That’s a crimson flag: It’s essential to have a agency set of objectives, making certain that the corporate has a transparent path to hitting its milestones and having the ability to increase its subsequent spherical.
The opposite different is that the corporate did have a transparent set of objectives, nevertheless it didn’t hit them. That occurs on a regular basis, and there’s no disgrace in that. Nonetheless, this deck makes the issue worse: It doesn’t clearly define what the corporate thinks the “Collection A goal milestones” are, and nowhere within the deck does it clarify what the milestones are, or what thinks it must do to be able to hit these milestones.
The ultimate crimson flag right here is that the corporate is making an attempt to pre-negotiate the deal: I respect that the founders have an opinion on what they suppose the cap and low cost are, however they don’t get to set these; the lead investor does. It’s attainable, after all, that this deck was up to date after the corporate already had a term-sheet in hand, but when that isn’t the case, this slide doesn’t come throughout as founders who’re skilled within the fundraising course of.
Many of the VC trade has stopped utilizing convertible notes nowadays, utilizing Y Combinator’s post-money SAFEs as a substitute. The additional bizarre factor right here is that Astek Diagnostics is, in reality, an Y Combinator alumnus from the accelerator’s S21 batch. It’s complicated why the corporate would go together with one thing aside from the usual funding phrases.
The straightforward factor could be to simply eliminate this slide altogether. When elevating a certain quantity, the phrases are all the time up for negotiation and can be relying on which manner the VC wind is blowing in that exact second.
Do away with the ‘exit’ slide
Subtle traders are aware of comparable exits within the area they’re investing in. A startup’s mission is to construct a particularly useful firm. As quickly as founders begin speaking about exits, they’re arguing towards themselves.
Amazingly, Astek Diagnostics included not one, however two exit technique slides:
[Slide 19] Exit technique, half 1. Picture Credit: Astek Diagnostics
[Slide 20] Exit technique, half 2. Picture Credit: Astek Diagnostics
This exit technique slide strikes me as spectacularly defensive, along with sending the fallacious sign. Belief high-quality traders to know their markets. Founders ought to clarify how they’re going to construct a multi-billion-dollar firm and fear about M&A or IPO one other time.
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