Private investors are plugging the knowledge gaps

Whatever the reason, securing investment is important at key moments of a business’ evolution. Amongst the range of financing options on offer - from bank loans to issuing shares - private investment has specific attractions beyond just the finance itself.

It’s the reason DxS, a personalized medicine company, chose this option to finance their development. “We were utilising our executive scientific expertise to establish a brand new company - to manufacture medical research kits - and needed money for laboratory space, employing staff and working capital,” explains CEO Dr Stephen Little, “but we were also looking for business support as well”.

“We started by getting advice from the British Private Equity and Venture Capital Association (BVCA) directory to help us find backing and support".

After presenting a business plan to selected venture capitalists, with an interest in medical genetics, they secured £2.1 million investment from Northern Venture Managers (NVM).

Having already completed their research and secured the intellectual property, the firm presented an alluring prospect. They were in a position to plow ahead with development, which offered potential investors a promising return.

In spite of this, however, the process was a long one (15 months) and more complex than DxS realised. “Getting a good corporate finance advisor on board is essential,” Stephen urges; “Their help is invaluable with negotiations and providing a better understanding of how the process works”.

The main obstacle they faced was inexperience: coming from executive scientific roles at AstraZeneca - Dr Little and co-founder Dr David Whitcombe had never set up a company before.

But, what these two entrepreneurs lacked in investment credibility they made up for in perseverance. “We never gave up trying to find the right investor because we believed in the potential of DxS and were committed not only to securing investment, but getting it from parties aware of the long term value of the business,” explains Stephen.

The investors have picked up the mantle from the advisor. “NVM has brought in much more than cash, it’s helped DxS break into new markets”. Stephen reflects: “They supported us in cultivating a network of interested parties who are aware of the market potential of our chosen field and the products and services that we provide. Private investment is unique as a funding stream in that it offers networking opportunities and business connections that can prove invaluable in the future”.


How to find private investors? Go to Northwest Business Angels.

Join the Angel Investment Network here.


Did you know?

DxS lab services and technology licensing brought in early revenue allowing further expansion and the company has subsequently raised a further £1.5M through NVM, YFM (Yorkshire Fund Managers) and Hygea.

DxS was acquired by global Sample & Assay company QIAGEN in September 2009 in a deal worth approximately $130 Million.

Dr Stephen Little is now Vice President of Personalized Healthcare at QIAGEN.