Identify Assets with Unrealized Potential
At EGB Ventures, we look for assets with unrealized potential. While this includes physical assets and ideas, it also extends to people. We believe that the life sciences ecosystem is full of untapped human resources and we work hard every day to uncover those resources. We seed our portfolio companies not only with capital, but with experienced C-level life science executives and high-potential, mid-tier professionals. EGB benefits from this mentor/mentee atmosphere greatly, as it creates a pool of talent that can be drawn from when new ventures are formed.
Following Asset Acquisition
Following the acquisition of an asset and formation of a new venture, we endeavor to raise a round of seed capital ($1M – $5M) that is adequate to position the company for a public financing. Our experience in public transactions includes listings on Nasdaq, the Toronto Stock Exchange, the Canadian Securities Exchange, and the Australian Securities Exchange, as well as reverse mergers into Nasdaq-listed companies. While these public financings tend to be relatively small compared to the traditional $75M+ IPOs led by bulge bracket banks, they are at levels that provide the opportunity for significant increases in valuation not only to our private investors, but also participants in the public offering. We refer to these types of transactions as “public venture capital,” which position our companies for larger, institutionally-led public offerings as development milestones are met and the company profiles are raised via well-crafted investor relations strategies.
Following the completion of an initial public financing, we begin the process of EGB’s disengagement from the day-to-day operations of the company. This includes replacement of any EGB principals on the board of directors, as well as working with the company to build out its senior management team to ensure its success as a stand-alone public company.
Maintain Balance of Value
Finally, we work to maintain an appropriate balance of value within the EGB portfolio. To the extent the value of our investment in any particular company grows beyond a certain percentage of our portfolio, we work to rebalance through sales into the open market and privately negotiated block trades. Any rebalancing is done with a view towards minimal impact on stock price and only takes place following the expiration of statutory and contractual lock-ups and escrow arrangements. Disengagement and rebalancing post-public financing are integral parts of EGB’s investment thesis, which not only protect against a significant decrease in the value of a single investment, but also liberates human and financial resources for the pursuit of new ventures.