Exploring Equity Investor Motivations for Early-Stage, Multifaceted Healthcare/Ag-tech Companies

Abstract

For as long as people have had ideas and innovations, they have required ways to fund these into reality. Raising capital has numerous issues; a large part of this is convincing investors that the idea/product will be a success. Central to convincing investors is understanding what motivates them to invest their time and money in a project and what turns them away. There is vast literature concerning the motivations of equity investors that talk about the main themes of investment motivation; Entrepreneur, Team, Market, Finance, Product, and Investor. However, despite resources talking about investors wanting broad, multifaceted technology; there is no literature specific about the motivations for this. This study chose to explore motivations for equity investors in healthcare/ag-tech ventures. This is because a vast number of technologies in these fields can apply across numerous sectors (i.e. Diagnostic platforms and drug repurposing). This study used a qualitative approach and semi-structured interviews to explore the motivations behind the investment decisions of equity investors with regards to early-stage, multifaceted healthcare/ag-tech companies. The findings supported the presence of the six broad themes mentioned above, and also the consideration of a seventh theme, Company Governance. Investors in a multifaceted company need to see the plan for the focussed market the venture intends to target. The study notes the number of times multifaceted investments have burned investors by attempting to do everything, and yet succeeding at nothing. The first contribution of this study highlights that companies need to be aware of the investor motivation regarding the company’s governance. Secondly, the recommendation that early-stage, multifaceted healthcare/ag-tech companies focus their intent at delivering one indication of their proposal and demonstrating that they are capable of doing this to tremendous effect; before attempting to harness the additional markets in which the product/technology can compete.