Integrated and efficient software and services for digital pathology applications

Overview

microDimensions (mD) is a Spin-off of the Technische Universität München in 2011. As a provider of software solutions for the processing, visualization, and analysis of microscopic image data the company aims to speed up workflows for pharmaceutical and biotech companies as well as researchers in the field of digital pathology.

In December 2013, mD closed a financing round with three investment partners (HTGF, Bayernkapital, and a private investor).

Fast Forward Advisors supported mD in their Series A fundraising in 2016, including international  investor outreach and a strategic investment-friendly ESOP.

Project
Client: microDimensions GmbH
Sector: IT, Biotech, Medtech
Product: B2B SaaS
Web: www.micro-dimensions.com

Project summary

Service: Startup International Fundraising
Outcome: 7-figure Series A funding, strategic investment-friendly ESOP

“ Working with FFA enabled us to prepare for our Series A round and to meet investors that were completely out of our reach “

Martin Groher | Co-Founder & CEO | microDimensions

PROBLEMS & CHALLENGES

The main problems of mD in early 2016 were the following:

1. Strategic investment friendly ESOP

They were struggling in finding an ESOP structure that would enable employees to participate to the company’s success, even without having a classic liquidity event/trigger (an exit in form of trade sale or IPO) due to a potential investment deal being discussed with a strategic investor (which expressed the idea of not being 100% exit-focused).

2. Series A fundraising

They never raised an institutional investment round (from venture capital investors) and were lacking the network and the reach to efficiently and effectively close the 2M€ Series A funding. In addition they didn’t have a CFO and their focus was 99% on product and market development.

ACTIONS & SOLUTIONS

1. Strategic investment friendly ESOP

We started working with mD on the ESOP identifying a solution that would provide economic incentives to the employees even in a non-exit case e.g. when reaching certain profitability levels and business metrics. In this context we analyzed the very complex topic of company liquidity at the time of the specific event and the taxation problems related to stock options in Germany.

2. Series A fundraising

Since mD financial kits and fundraising materials were already investor-ready, we skipped the Phase 1 “investor-readiness check-up” of our standard Startup International Fundraising package and jumped right into the Phase 2 “fundraising operations”.
In Phase 2 we:
a) created a long-list of investors by crawling through our internal databases (with past transactions), investors via 2nd rank introductions and our own specific research
b) identified pitching opportunities in public and closed-door events
c) reached out and short-listed interested investors (and managed feedback loops and arrangement of 1-1 meetings)
d) supported in deal closing and negotiations

IMPACT & OUTCOME

1. Strategic investment friendly ESOP

The ESOP was signed by the new investors and the BoD of the company. We elaborated a deal with microDimensions to be the owners of the ESOP IP and templates, in order to provide it to future FFA clients.

2. Series A fundraising

After contacting 200+ investors throughout Europe and the US, we short-listed 4-5 investors, which in syndication with some of the existing investors and other new business angels invested a EUR 2M (USD 2.4M) round.