Navigating the London Business Challenge Week: A Journey with Belfry Medical

I very much enjoyed my experience of the London Business Challenge Week. The project choice was quite straightforward for me. The allure of working with Belfry Medical was undeniable to me; I have a background in the healthcare space and have a strong interest in going into healthcare investing. Belfry is a medical device startup with a mission is to revolutionise the medical field with precise and safe controlled substance. They created a proprietary inhaler device and, planning to enter the market via the medicinal cannabis space, sought our support to improve their financial valuation model of the business. They would then be able to leverage our model to inform their strategic planning in securing investments and fostering growth. Their goal to redefine medical standards piqued my curiosity, while the challenge of refining their valuation model offered a tangible real-world application of my knowledge from the MFA and previous experience.

We started the week with meeting with our client, on local premises at LBS. Here, the client presented to company in further detail, and we clarified the project scope and objectives: what a successful outcome would look like for them, whether they had any relevant information about the market size, what the working capital of the firm is, whether they expected any regulatory hurdles and what the competitive space looked like. From there, we defined responsibilities within our group. Crafting a comprehensive valuation model involved determining the market size of the medicinal cannabis space and market penetration of Belfry to forecast revenues in the model, as well as forecasting other elements in the assets and liabilities of the model, so we split into three groups.

Most mornings we would try to align on our next steps, work separately come together again at noon to re-align then have a meeting with our client in the afternoon for any questions we had. By the end of an intense week, my team and I reached our objective of providing Belfry Medical with a robust and well-documented valuation framework. We presented it to the Belfry team, which was delighted with the outcome (as far as we could tell!).

I think the most valuable insight I obtained from working with Belfry Medical is with regards to the realities of startup dynamics and entrepreneurial decision-making: even though a financial model might give you a precise quantitative outcome, there are many layers of uncertainty within the model which need to be appreciated to be able to tweak it. A significant uncertainty is the market size and penetration, as these are numbers taken from online sources, but they can be quite obscure. The client also often has missing data, such as working capital or certain projected costs. This is even more the case for a startup, which can make things very fuzzy.

As a startup founder, I think it is essential to embrace this uncertainty while having a strong understanding of the financials, or at least have the support in-house. In the end it’s the financials that drive the growth of the business and whether you receive investment. This financial awareness is often a missing element in healthcare startups and why many go awry. The Challenge Week confirmed my interest in bridging the gap between healthcare and finance, helping innovators bring their therapies to market more efficiently and effectively.

Written By, Elena Meganck (MFA 2024)

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