Starting a Biotech Company - Finance
Discussion
Probably get moved to the Business bit but while I'm here -
I know a man who can, in terms of doing clever Biotech stuff.
He's now retired and getting bored.
He now wants to try to do something clever in the Biotech game (that's what he's got lots of degrees, PhD etc in) via his own Company.
He thinks I'm the guy for money advice (not sure why), so he asked me if I knew how he could fund this.
I've no idea how he would go about starting his own Biotech Company or how funding is secured on such ventures.
Anyone here done a similar thing and care to share their experience / tips etc.?
He's not the Dragons' Den type.
I know a man who can, in terms of doing clever Biotech stuff.
He's now retired and getting bored.
He now wants to try to do something clever in the Biotech game (that's what he's got lots of degrees, PhD etc in) via his own Company.
He thinks I'm the guy for money advice (not sure why), so he asked me if I knew how he could fund this.
I've no idea how he would go about starting his own Biotech Company or how funding is secured on such ventures.
Anyone here done a similar thing and care to share their experience / tips etc.?
He's not the Dragons' Den type.
Typically angel investment / seed capital type arrangements to get anything innovative off the ground *but* investors are going to expect:
1) That he will have skin in the game too; and
2) To see real commitment (depending on age, that could present something of a hurdle).
The hardest part isn t usually the funding. It s building for growth: product strategy, development, team. That d be especially important in biotech where there s a regulatory landscape to navigate along with sales channel complexity.
If he s clued up, he ll either recognise the above and seek out investors who can help or, if he can cover it all off well, attract dumb money.
The more people bring to the table beyond just money, the more they expect that to be reflected in their returns.
1) That he will have skin in the game too; and
2) To see real commitment (depending on age, that could present something of a hurdle).
The hardest part isn t usually the funding. It s building for growth: product strategy, development, team. That d be especially important in biotech where there s a regulatory landscape to navigate along with sales channel complexity.
If he s clued up, he ll either recognise the above and seek out investors who can help or, if he can cover it all off well, attract dumb money.
The more people bring to the table beyond just money, the more they expect that to be reflected in their returns.
I know some people in the biotech startup game. I'm not expert but my impression is different, the main part of the job is attracting the investment. Go to Cambridge and throw a rock and hit an underemployed scientist. I've heard stories of 200 applicants day one, for roles in biotech startups. Leaders who can get things moving are rarer and often have history in the game
It's pure venture capitalism. ie makes more sense as part of a diversified investment portfolio. Even really promising drugs with successful trials, very rarely reach approval. Failure rate 90%+. Winners fund the losers. So any leader needs to understand how the odds add up, and the investment landscape, know the right people, and probably been lucky in the past to build some kind of track record.
It's pure venture capitalism. ie makes more sense as part of a diversified investment portfolio. Even really promising drugs with successful trials, very rarely reach approval. Failure rate 90%+. Winners fund the losers. So any leader needs to understand how the odds add up, and the investment landscape, know the right people, and probably been lucky in the past to build some kind of track record.
Edited by lizardbrain on Sunday 15th February 14:50
I actually think we’re agreeing: the idea is important but execution/commercialisation take a slightly different skill set to pure science.
Have seen it first hand when relative was working on some interesting medtech and the founders couldn’t see that there was an imperative to move very quickly on the commercial front and/or that connections were what was needed. I still wish they’d let me make a couple of calls as what they’d developed was both groundbreaking and of huge potential.
Have seen it first hand when relative was working on some interesting medtech and the founders couldn’t see that there was an imperative to move very quickly on the commercial front and/or that connections were what was needed. I still wish they’d let me make a couple of calls as what they’d developed was both groundbreaking and of huge potential.
(Multiple biotech startup (bootstrap and VC) + a bit of corporate)
No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc… to even begin to be able to answer.
If he thinks he’s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he’s on about.
No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc… to even begin to be able to answer.
If he thinks he’s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he’s on about.
stuthemongoose said:
(Multiple biotech startup (bootstrap and VC) + a bit of corporate)
No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc to even begin to be able to answer.
If he thinks he s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he s on about.
It's therapeutic and research - human diseases.No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc to even begin to be able to answer.
If he thinks he s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he s on about.
I'm now sworn to secrecy regarding the details after a bit more in depth chat today.
He's leaning towards not re-inventing the wheel by having to set up his own lab, but using an existing lab and guiding a research group as a Consultant.
There's a series of experiments that would probably take a year to complete.
He wants to own the IPR and doesn't want to end up with someone else stealing the idea and trying to do it without him.
Is this sort of thing possible?
harryt said:
It's therapeutic and research - human diseases.
Is the aim here to produce something like a drug/device for clinical care from an idea/theory?If so, you are looking at about a decade to go from idea to gaining FDA/MHRA etc approval. That's if everything works, you have to do bench/basic science research, than you have to do Phase 1-3 clinical trials, than production for research.
If it's drugs you are essentially going up against every major pharmaceutical company around, as well as every established academic unit. 99.9% of ideas will never get close to reaching the threshold needed for clinical use.
The most lucrative drugs around are often found by accident.
harryt said:
stuthemongoose said:
(Multiple biotech startup (bootstrap and VC) + a bit of corporate)
No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc to even begin to be able to answer.
If he thinks he s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he s on about.
It's therapeutic and research - human diseases.No where near enough detail to be able to even start to advise.
Tools and tech? Consultancy? Therapeutic or research applications etc etc to even begin to be able to answer.
If he thinks he s wanting money then try get seis investment to get off the ground, but even that may be boloney depending what he s on about.
I'm now sworn to secrecy regarding the details after a bit more in depth chat today.
He's leaning towards not re-inventing the wheel by having to set up his own lab, but using an existing lab and guiding a research group as a Consultant.
There's a series of experiments that would probably take a year to complete.
He wants to own the IPR and doesn't want to end up with someone else stealing the idea and trying to do it without him.
Is this sort of thing possible?
Well by definition you’re going to have to start sharing the idea to get buy in to a vision, or it won’t go anywhere.
Depending what it is, it may be wise to think about what IPR protection you’d even be able to get - patent being the obvious.
Ultimately you can’t get funding and keep control, by definition you’re giving up some control. The IPR is protectable and owned by the company you setup or it’s not protectable (trade secret etc, worse for finding and valuations to raise money)
Tbh if he’s serious about wanting to do something, just based of the responses and approach, he needs a co founder who actually gets business. So I’d be thinking two things.
Who’s my co founder?
Can I protect the idea, and if so how?
And go from there!
Co founder with experience / business head IMO - if he was really serious about going it alone he’d have searched/looked up/self learned about these other elements - doesn’t jump off page as that’s his wheelhouse vs the deeper bio - so plug that gap with experience.
HTH!
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