Welcome to The Innovator, the monthly newsletter for iiM, LLC. What is iiM? We are a funding platform for early-stage companies in the animal health, agriculture and human health verticals. In this newsletter, we intend to share educational information, ideas and a perspective on the investments we are making. If you do not want to receive this publication, please let us know and we’ll remove you from the list of recipients. Please enjoy this issue of The Innovator.

Lydia Kinkade, iiM Managing Director

Before a company is given the opportunity to present at a pipeline or investor meeting, they are thoroughly vetted by iiM. The process begins with the identification of a startup that meets iiM’s investment criteria: they operate in the human health, animal health or agriculture industries and are seeking $50k-$5M in investment, typically in a Seed or Series A round. Prospective companies are introduced to iiM through a variety of sources; oftentimes, entrepreneurs are connected with iiM by angel investors or other venture capital firms that operate in our designated industries. iiM also proactively seeks out companies that they’ve encountered at pitch events, have been part of an incubator or accelerator, or were mentioned in industry-related publications. Entrepreneurs can also complete an application on iiM’s website.

Once a high-growth potential startup is identified, iiM’s team completes extensive research on the company to evaluate the competitive landscape of the industry, the experience of the founding team and how much money has already been raised by the business. Additionally, the team evaluates the firm’s intellectual property, market size and any regulatory or other hurdles that would hinder its ability to be successful.

Next, iiM reviews the company’s pitch deck and pro forma to assess:

1. Projected sales over the next 3-5 years and how efficiently capital is being used to grow the business.
2. Initial traction from target markets.
3. What milestones have already been achieved by the firm.
4. Whether the company’s scientific and technological claims can be substantiated by the tests and research that has been done.
5. Current/projected funding and valuation.  

Once iiM has completed its research, a call or in-person meeting is scheduled with one or more of the founders to more deeply understand why the company was founded, the soundness of its growth strategy, any existing partnerships that would accelerate its growth and the strengths and weaknesses of the team.

If iiM determines, after this vetting process, that the company would be a good fit for its portfolio, it will invite the founders to present at a pipeline or investor meeting where members will make the decision about whether to move forward with considering an investment.

Natalie Berigan Kuster, iiM Consultant

There are many terms in the venture capital world that can be confusing. As we look at various companies and meet with their founders, you may hear us use some of this terminology. Here are a few such terms and what they mean.

Burn Rate – The rate at which a company expends net cash over a certain period, usually a month. 

Option Pool – The number of shares set aside for future issuance to employees of a private company.

Pari Passu – At an equal rate or pace, without preference. 

Liquidation Preference – Liquidation preference determines who gets paid first and how much when the company is liquidated, sold or declares bankruptcy. 

Down Round – A down round refers to a private company offering additional shares for sale at a lower price than they had been sold for in the previous financing round. Simply put, more capital is needed, and the company discovers that their valuation is lower that it was prior to the previous round of financing. 

We are pleased to currently have nine companies in the iiM portfolio with due diligence underway for additional investments. One of our portfolio companies is SMRxT, Inc.

 SMRxT has developed Nomi, a medication adherence system, that accurately captures data to reveal how patients take their medication. The Nomi software platform has been built with the intent of using it for essentially any medical delivery device that could implement a sensor, such as a pill bottle, nebulizer, injection device or ingestible capsule. Nomi accurately captures medical adherence data to reveal how patients take their medication, and the system translates that data into actionable information for patient interventions and engagement. Nomi empowers and improves patient behavior without the patient lifting a finger. Once the prescription is filled, the device is ready to use. There is no application set up, Bluetooth or Wi-Fi connectivity. Nomi connects automatically using Verizon’s nationwide network. Nomi not only impacts the patient’s behavior towards better health, but it also helps hospitals and health plans avoid preventable costs and boost productivity.  

SMRxT, a Florida-based company with additional offices in Overland Park, KS, has 13 fulltime employees and six advisors with extensive backgrounds in healthcare and technology. The company has raised $9M in funding to date. SMRxT has invested in US-based manufacturing and software development, as well as customer support. In addition, Nomi is certified on Verizon’s network and is an official Verizon Innovation Partner. Verizon also provides development and system integration support, as well as access to Verizon’s healthcare customers as a strategic sales channel partner. Current organizations with Nomi programs include: Diplomat Specialty Pharmacy, Florida Hospital, Intermountain Health, Yale University, National Institute of Health, Cedars-Sinai Medical Center, and University of Kansas Medical Center. SMRxT is a FDA Class I registered device and is certified on Verizon’s cellular network. The Nomi system is HIPAA compliant.

iiM invested in a SMRxT Series B round in November 2018. The funding round is still open and iiM is considering making an additional investment before the end of 2019.

www.smrxt.com