Startup Funding Espresso – What Investors Look for in a Biotech Startup

What Investors Look for in a Biotech Startup

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Biotech startups bring a unique set of value propositions and exit opportunities to the startup investor.

Here's what investors look for in a biotech startup:

Investors look first and foremost for a novel target to pursue.

These receive outsized funding rounds at the early stage.

Investors look for platform-based approaches rather than individual products.

The platform promises multiple products at a lower cost to develop.

Some investors look for a fast follower of a recently proven therapeutic.

This could be an alternate target with the same mechanism of action.

Given the amount of funding required to take it all the way to the market, most investors look to exit sooner in a clinical trial or upon FDA approval.

Investors look for exits in the 5 to 7-year window.

They look at how much additional funding will be required to reach the exit.

They avoid substantial follow-on raises as it causes dilution.

Finally, they look for an experienced team, both on the technical side and the business side.

The customer in the biotech industry is not the patient who uses the therapeutic, but rather the pharma company that buys the startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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