Last Updated on
June 3, 2024
By
Excedr
The biotech industry has had its ups and downs recently. Despite its peaks and valleys, it remains a strong, dynamic, and evolving industry that sits at an important intersection of biology, technology, and innovation. From groundbreaking therapies and personalized medicine to cutting-edge diagnostics and agricultural biotech, the potential for biotech to transform lives and industries remains immense and tangible.
As we all know, bringing these innovations from concept to reality often requires substantial financial investment, particularly during the early and growth stages. The challenges of funding the early years of research and development create difficult hurdles, leading to a wide range of success and failure. This is where venture capital (VC) comes into play.
In this comprehensive guide, we aim to explore the role of VC investors in the biotech industry, highlight some of the leading and emerging firms specializing in biotech investments, and offer insights into funding trends and opportunities for biotech startups.
Whether you're a startup founder looking for funding, an investor thinking of entering the biotech space, or simply an enthusiast who wants to learn more about the funding landscape of biotechnology, this guide is designed to expand your knowledge of the investors currently playing a major role in the biotech sector.
We’ll start off by talking about the basics of biotech venture capital, why VC funding is often essential, and what venture capitalists look for in a biotech startup. We’ll also highlight some of the major investors in the biotech sector today.
Venture capital is a form of private financing traditionally provided by investors to startups and early stage businesses with long-term growth potential. VC investing plays a critical role in the biotech industry, providing the necessary funding and strategic guidance that biotech startups often need to bring their ideas to market.
VC funding is not just about capital though. It also involves gaining access to managerial expertise, technical support, and a vast network of industry contacts. This combination of financial and strategic support can be a huge value-add for biotechs navigating the complex and capital-intensive process of developing and commercializing biotech innovations.
For new labs with limited operating history, VC has become an increasingly important source of funding. In situations where access to bank loans, other debt instruments, or capital markets are oftentimes not available, VC funding is essential. Not only do you need lab space, but you also have to have the right kind of equipment. VC investment gives you access to the capital to get your lab up and running. However, VC funding isn’t the only available source of capital at this stage in a company’s lifecycle. There is a breadth of sources out there to tap into, including government and non-government grants.
Securing VC investments for your biotech company requires a lot of dedicated time and effort. Because of the heightened financial risk of early stage investing , VCs are going to take their time analyzing and performing due diligence on your company—as well as all the others trying to raise money—to make sure the potential for a good return is possible. So how can you stand out, and what are VCs looking for?
Large markets will grab an investor’s attention. “Large” generally means that the addressable market is forecasted at, or to grow to, $1 billion or more in revenue. To receive the return they expect from their investments, venture capital firms generally want to ensure that their portfolio of companies has a chance of growing sales worth hundreds of millions of dollars.
The larger the market size, the greater the likelihood of the investment to capture additional market share and increase the company’s total enterprise value. This makes the business even more exciting for VC firms looking for possible ways to exit their investment. Ideally, the business will grow fast enough for them to take first or second place in the market.
Investors want to spend their money on outstanding products and services that have a competitive edge that will last a long time. They look for solutions to real problems that haven’t been solved before by other companies currently in the marketplace, whether these challenges are technological, business/infrastructure, or a combination of both. They’re looking for products and services that customers can’t live without, because they’re so much more innovative or comparably cheaper than anything else currently available in the market.
When assessing your company, they’re looking for uncovering a competitive advantage. They want to be able to generate sales and profits before competitors enter the market and begin to crowd out a company’s overall profitability. The fewer direct competitors, the better for you and your potential investors.
We’ll go over this in greater detail later in this article, but from a high level, we recommend the following: take a look at all the other biotech ventures out there right now. Do your homework about the firm and its investors. Adjust your pitch according to what you learn. Avoid using the same pitch for each company. VC firms typically receive dozens, and sometimes hundreds, of pitches in a given month. It’s imperative that you keep you presentation punchy and simple to the problem you’re solving
Ask yourself, in terms of other biotech startups, what are you doing differently than your direct competition? Who has your direct competition approached for financing? Don’t expect any VC firm to invest in you if they’re already working with your competitors. It’s also important to foster a strong and formative internal organization and provide some proof of concept, demonstrating some operational derisking upfront.
Management is the biggest factor that smart investors consider. Their investment is in the management team and its ability to execute their business plan. As such, investors are looking for executives who have built successful businesses that will generate high returns for investors.
As a business looking for a venture capital investment, you should be able to provide a list of qualified and experienced people who play major roles in the company’s development. If your business lacks talented managers, you should be willing to hire them from outside. Many venture capitalists would rather invest in a bad idea that’s led by a strong management team than invest in a stellar business plan that’s supported by a group of inexperienced managers.
Anything you tell a potential investor needs to be supported by data. During their due diligence investigations, these firms will have their accountants review your financial reports very closely.
Be sure to have organization and understanding around the company’s income statement, balance sheets, and cash flows along with information about your customer acquisition costs, retention rates, average purchase amounts and more. Make sure you account for every penny and every product, with reports and receipts to back it up.
Even if you carefully put together your financial statements, your financial situation will be hard to prove if it’s not supported in documentation at this phase. A simple accounting error may be the difference between getting the funding or not.
Not only do venture capitalists want to see your financial reports, they want to see that you’re making progress. You don’t necessarily have to be profitable yet, but if there isn’t proof of concept and a business model poised for material growth, you likely won’t secure an investment. They want to know about your sales, marketing, and business model along with historical revenues and future projections.
Actually getting a VC firm to invest in you is a major task. Many startups are unsuccessful. Which is often why we focus the most on how to get an investor to notice you and your company.
But it’s important to not lose sight of the second ingredient to success: selecting the right VC firm for you! It’s often an extremely pivotal decision. The right partner not only provides financial support but also brings valuable expertise, industry connections, and strategic guidance. It’s often a long and close partnership you’re building here.
With that in mind, let’s go over some key criteria that you or any biotech startup should consider when choosing a VC firm to work with.
Look for a firm with substantial experience in the biotech sector. It’s even better if they have experience in your exact area of focus. These firms will have a deeper understanding of the unique challenges and opportunities in biotechnology, including regulatory hurdles, product development stages, and market dynamics, compared to general VCs.
A well-connected and biotech-focused VC firm can facilitate introductions to potential partners, customers, and key industry players, providing you with a significant advantage in a highly competitive landscape.Further, a well-established VC firm will also have a strong track record of navigating through the various business challenges that arise when moving up market and expanding the reach of your company.
Assess the financial strength of the VC firm. It's not essential, but it is ideal to partner with a firm that is capable of supporting your startup through multiple funding rounds as you scale.
You can also examine the firm’s track record in biotech investments. A history of successful exits and positive returns indicates a strong ability to identify and nurture promising companies. Speak with other entrepreneurs who have partnered with the firm to gain insights into their experiences and the value the firm added to their ventures.
Additionally, conduct a bit of research on the background of the VC partners and their senior staff. It’s often a great sign of a strong VC partnership when the individuals leading your investment have a strong background in your business’ particular area of operation along with a history of steering their previous investments towards a successful exit.
Beyond capital, many VC firms offer a range of value-added services. These can include mentorship from experienced industry veterans, strategic advice on business development, and operational support. Such services are particularly beneficial for startups needing guidance on navigating the complexities of the biotech industry.
Additionally, some firms provide regulatory assistance, services that can help you manage compliance and approval processes. This can often be exactly what you need to accelerate product development and enter the market quicker.
Figure out if the VC firm's goals and vision align with those of your startup. A shared vision for your company’s future will help foster a collaborative relationship between you and an investor, ensuring both parties will want to work towards the same goals. Discuss expectations, timelines, and long-term goals to confirm that the partnership will be mutually beneficial.
A good cultural fit is highly impactful! It’s often a major factor in fostering a productive partnership. If you can, evaluate the firm’s communication style, decision-making process, and overall approach to collaboration. A VC firm that values transparency, open communication, and a supportive partnership will be more conducive to your startup’s success.
ARCH Venture Partners has made it their business to back disruptive science by investing anywhere from $50,000 to $150 million per company. They have offices in three of the top cities for biotech, including Chicago, Seattle, and San Francisco. They also have an office in Dublin, Ireland. They had five series A deals in 2019, and are currently involved in coronavirus research.
Learn more about ARCH Venture Partners.
Orbimed, founded in 1989 in NYC, has over 20 years of investment experience in the healthcare industry, and has $19 billion in assets under management. It has grown into a global company, with headquarters in several cities. The firm’s partners have a consistent track record and have proven themselves a steady venture capital partner in the life sciences. The firm focuses on investing in biopharmaceuticals, medical devices, diagnostics, and healthcare companies with the potential to change and save patient lives.
OrbiMed has built a strong foundation for successful investments due to its operating skills, investment experience, and scientific understanding. From early-stage companies to national corporations, OrbiMed discovers global companies with innovations that will help ensure humanity experiences healthier and longer lives. The investment team is involved in public equity and private markets and comprises over 100 experienced professionals who hold expertise in law, medicine, biotechnology, and finance.
Learn more about OrbiMed.
Cannan prides itself on being an early-stage venture capital firm. Like ARCH, they invested in five major series A deals in 2019. Biopharma only represents a small portion of their total portfolio, but the companies they’re involved with are highly reputable. For example, Comet Therapeutics is developing small molecule therapeutics with a focus on rare genetic diseases and errors of metabolism that aims to address defects in the body’s ability to turn food into energy.
Some other examples include Arrakis Therapeutics, a company pioneering the discovery of medications that directly target RNA, and Graywolf Therapeutics, a biotechnology company developing next-generation immunotherapies highlighting non-responsive tumors for destruction by the immune system.
Learn more about Cannan.
SR One Management is a venture capital firm well-versed in funding companies in the life sciences and health care. It was founded in 1985 by GlaxoSmithKline (GSK) and focuses on improving the health of patients with unmet medical needs. It does this by translating innovative technologies into next-generation medicines. SR One partners with industry experts, scientists, entrepreneurs, and other investment partners to build and execute strategies that support the growth and development of elite biotech companies.
Learn more about SR One Management.
Sofinnova was also involved in five series A projects in 2019. Overall, they’ve funded 88 companies, of which 41 IPO’d, and 17 resulted in mergers/acquisitions. Their 120 years of operating experience and 100 years of investing experience has led to 18 FDA approved drugs, and much more. Their portfolio includes companies focused on orphan disease, cancer, and other specialties such as neurology, women’s health, and ophthalmology.
Learn more about Sofinnova.
Flagship Pioneering participated in three Series A projects in 2019 and has founded over 100 companies, adding six to eight new ventures annually. The firm boasts an impressive track record, with more than 20 IPOs since 2013 and over 2,500 patents granted worldwide. One of Flagship's most notable portfolio companies is Moderna, renowned for developing one of the first COVID-19 vaccines using mRNA technology.
Flagship Pioneering extensive network of collaborators includes industry giants such as AstraZeneca, Bayer CropScience, and Nestle Health Science. This network enables Flagship to leverage significant expertise and resources, fostering innovation and growth within its portfolio companies.
Learn more about Flagship Pioneering.
Atlas Venture, a biotech venture capital firm, was founded in 1980 by Michiel de Haan as a subsidiary of NMB Bank in the Netherlands. The company spun out of NMB Bank in 1987, and the name Atlas Venture was chosen. Its headquarters are located in Cambridge, Massachusetts.
Following its founding, it diversified its venture capital funds in 1990 to include life sciences and technology in its investment strategies. These sectors were eventually separated into two different firms. The company is committed to investing in innovative biotech startups, and focuses on finding and funding remarkable entrepreneurs with experience in research, business, and clinical development; all of which are necessary tenets for building a breakthrough biotech company.
Learn more about Atlas Venture.
Frazier Healthcare Partners is a venture capital firm focused on investing in innovative healthcare and life science companies. It specializes in incubation, growth equity funding, and liquidation. Since its establishment, it has invested in over 200 companies and raised over $7.1 billion in total capital.
The company has a variety of investment interests, ranging from company creation, venture capital investments, to acquiring lower middle-market firms that are profitable. For the same purpose, the company is divided into two teams: Growth Buyout and Life Sciences, both of which invest in North America, Europe, and Asia, with a focus on healthcare services, pharmaceutical startups, and innovative products.
Learn more about Frazier Healthcare Partners.
The COVID-19 pandemic has led to the rapid development of high-throughput healthcare innovations and drug delivery technologies. Since the virus first appeared, scientists and medical professionals have worked tirelessly to treat and prevent any similar future crises.
Behind these groundbreaking innovations and developments are other critical players like 5AM Ventures, a well-established venture capital firm comprising expert life science investors. Its mission is to solve funding issues in the healthcare sector and build next-generation life science and biotech companies.
Learn more about 5AM Ventures.
Private equity and venture capital firms play a pivotal role in introducing innovative and affordable solutions to health infrastructure. Polaris Partners is committed to just that, with a focus in healthcare, software, and biotech startups.
It builds companies that work on life-changing solutions, and partners with healthcare founders to support them in their endeavors across all stages. Together, the firm and the founders it supports develop approaches that accelerate medical operations, provide scalable solutions, and improve patient care.
Learn more about Polaris Partners.
As good as an idea might be, building a successful business around it often requires a substantial amount of funding and resources, especially in a capital-intensive industry like the life sciences.
This is where venture capital (VC) firms like Perceptive Advisors can provide a helping hand to startups. By investing in the company, the firm can help the founders get their business off the ground, validate their science, and conduct initial proof-of-concept studies. Perceptive Advisors, also known as the Perceptive Xontogeny Venture Fund, was founded in 1999 by Joseph Edelman, the Chief Executive Officer and Portfolio Manager of the company.
Learn more about Perceptive Advisors.
IndieBio, a biotechnology and life science accelerator located in San Francisco, California, was founded in 2014 by Arvind Gupta. Upon its founding, it was the world’s first startup accelerator for synthetic biology.
IndieBio is committed to raising biotech startups from bench to product by assisting in the development of the startup’s business model, go-to-market strategy, and future fundraising efforts. It provides each company $525,000 in seed funding, co-working and lab space, and dedicated mentorship. Startups also gain access to its huge network of alumni, investors, biotech entrepreneurs, investors, press, and corporate partners. Its accelerator program is renowned, and has supported big ideas since the beginning, creating value that adds up to over $4B.
Learn more about IndieBio.
We face health crises and challenges often, and many investors are now focusing their resources on companies that can bring revolutionary solutions to the healthcare sector. RA Capital, short for RA Capital Management, LP, is a multi-stage investment manager that does just that.
It provides funding to public and private healthcare, life sciences, pharma, and biotech companies for developing drugs, medical devices, and diagnostics. RA Capital was founded in 2001 and is led by Piter Boelhouwer, the managing director of the company, and its managing partners, Peter Kolchinsky, Rajeev Shah, Andrew Levin, Josh Resnick, and Ryan Berry.The firm is dedicated to evidence-based investing, and supports the development of drugs, medical devices, diagnostics, and more.
Learn more about RA Capital.
New Enterprise Associates (NEA) is one of the largest venture capital firms, with a focus extending beyond healthcare to technology companies as well. Founded in 1977, NEA manages over $25 billion in assets and invests in companies at various stages, from startups and early-stage ventures to those in the later stages of growth. The firm has offices in multiple locations, including Menlo Park, New York, and San Francisco.
NEA's diverse portfolio includes investments in technology and healthcare, and the firm has a history of participating in significant funding rounds. In 2019, NEA participated in three Series A deals, reflecting its commitment to supporting early-stage innovation. The firm's long-term investment strategy is designed to help companies grow from inception through to massive growth and market leadership
Learn more about NEA.
Founded in 1986 by the Chan family, Morningside Ventures is a venture capital and private equity firm that invests in businesses within clean technology, education technology, and life sciences. Headquartered in Hong Kong, the firm operates with a strong commitment to ethical investment and long-term company building.
In the life sciences sector, Morningside specializes in early-stage investments, focusing on diagnostics, therapeutics, medical devices, and innovative health technologies. The firm has supported a variety of groundbreaking companies, such as Adiso Therapeutics, which is advancing treatments for inflammatory diseases. In 2019, Morningside participated in three Series A deals, demonstrating its ongoing commitment to fostering early-stage innovation.
Morningside Ventures is renowned for its dedication to addressing significant health challenges, investing in both high-prevalence and rare diseases to create impactful medical solutions. The firm’s approach combines substantial financial backing with strategic guidance and access to a robust network of industry experts.
Learn more about Morningside.
The Column Group, founded in 2007 and headquartered in San Francisco, focuses on investing in early-stage drug discovery companies. With $4 billion in assets under management, the firm is dedicated to building science-driven companies with unique scientific platforms that have the potential to deliver breakthrough therapeutics.
The Column Group invested in two Series A deals in 2019 and continues to emphasize long-term value creation through innovative science. The firm’s portfolio includes companies such as Audentes Therapeutics, Crinetics Pharmaceuticals, and Atreca. The Column Group's approach is to create fundamentally strong companies from the ground up, supporting them with significant financial and operational resources to achieve their growth and development goals.
The firm’s investment strategy targets disease-focused drug discovery, leveraging a deep understanding of the scientific, competitive, and regulatory landscapes. By focusing on high-impact ideas and exceptional talent, The Column Group aims to develop transformative therapies that address significant medical needs.
Learn more about The Column Group
Third Rock Ventures, LLC, founded in 2007 and headquartered in Boston, Massachusetts, is a venture capital firm specializing in life sciences. With offices in Boston and San Francisco, the firm has a portfolio comprising over 60 companies dedicated to translating scientific discoveries into breakthrough medicines. Third Rock Ventures has raised $3.8 billion since its inception and continues to focus on developing new biotechnologies that address high unmet medical needs.
The firm’s investment strategy emphasizes creating and supporting innovative life science companies from their earliest stages. Notable companies within its portfolio include Sage Therapeutics, Editas Medicine, Constellation Pharmaceuticals, and Flare Therapeutics. Third Rock Ventures recently closed a $1.1 billion fund, its largest to date, which aims to support the creation of approximately 10 new biotech startups
Learn more about Third Rock Ventures.
Alta Partners, a healthcare-focused venture capital firm, is based in San Francisco, California, and was founded in 1996. It has been building impactful companies alongside industry leaders and entrepreneurs for decades now, and boasts a life sciences portfolio with over 70 FDA approvals.
The firm’s tech-enabled services companies treat hundreds of thousands of patients yearly, and it continues to seek out innovative entrepreneurs with a good idea and an irrepressible passion for creating life-changing solutions.
Learn more about Alta Partners.
Lux Capital, founded in 2000 in New York, focuses on investing in companies at the intersection of science and technology. With over $1.5 billion in assets under management, Lux Capital has established itself as a key player in the venture capital landscape, particularly in the fields of biotech, robotics, AI, and deep tech. The firm has offices in New York and Menlo Park.
Lux Capital's investment philosophy emphasizes supporting visionary entrepreneurs who are developing breakthrough technologies. Their portfolio includes companies like Lumafield, Drone Racing, and Novig. The firm provides not only financial backing but also strategic guidance, leveraging its extensive network and deep industry knowledge to help startups navigate their growth paths.
The investment team at Lux Capital consists of seasoned professionals with backgrounds in science, engineering, and finance, ensuring a comprehensive approach to supporting their portfolio companies' success.
Learn more about Lux Capital.
Entrepreneur First, established in 2011 and based in London, specializes in nurturing early-stage startups by assisting individuals in developing ideas, forming companies, and securing funding. With branches in London, Paris, and Berlin, the organization boasts a global presence and a robust network within the tech and biotech sectors.
Their distinctive approach includes offering funding, mentorship, and access to a vast network of experts and investors. Several notable companies, such as PolyAI, Automata, and Gensyn, have successfully graduated from their program. The team at Entrepreneur First comprises seasoned investors, entrepreneurs, and industry specialists who work closely with founders to foster the success of their ventures.
Learn more about Entrepreneur First.
New Leaf Venture Partners, based in New York, focuses on investing in biopharmaceuticals, information convergence, and life science tools. With over $2 billion in assets under management, the firm has supported more than 150 companies, including PassageBio, BrightInsight, and Edgewise.
Founded in 2005, New Leaf Venture Partners emphasizes creating efficiencies and improving healthcare outcomes through innovative solutions. The firm provides not only capital but also strategic guidance and industry connections to help startups achieve their goals. The investment team at New Leaf Venture Partners brings extensive experience in life sciences and finance, ensuring a well-rounded approach to venture capital.
Learn more about New Leaf Venture Partners.
F-Prime Capital, headquartered in Cambridge, Massachusetts, has over 50 years of investment experience in the healthcare and technology sectors. With more than $2 billion in assets under management, F-Prime Capital Partners focuses on early and growth-stage investments in biopharmaceuticals, medical devices, diagnostics, and healthcare IT.
The firm has a global presence, with offices in the United States and Europe, and a portfolio that includes companies like Denali Therapeutics, Orchard Therapeutics, and Beam Therapeutics. F-Prime Capital Partners leverages its deep industry expertise and broad network to support its portfolio companies' growth and success. The investment team consists of professionals with diverse backgrounds in science, medicine, and finance, providing comprehensive support to their portfolio companies.
Learn more about F-Prime Capital.
Alexandria Venture Investments, based in Pasadena, California, is the venture capital arm of Alexandria Real Estate Equities. Founded in 1994, the firm focuses on early and growth-stage investments in life sciences, technology, and agtech. Their portfolio includes prominent companies like Grail, Juno Therapeutics, and Moderna.
The firm leverages its extensive real estate assets and industry connections to support the growth of its portfolio companies. Alexandria provides capital, strategic guidance, and access to a network of industry experts and resources. The investment team includes professionals with backgrounds in life sciences, real estate, and finance, ensuring a comprehensive approach to venture capital.
Learn more about Alexandria Venture Investments.
Founded in 1999 and headquartered in Hellerup, Denmark, Novo Holdings serves as the investment branch of the Novo Nordisk Foundation. With over $60 billion in managed assets, Novo Holdings invests in life sciences companies at various development stages, from seed to growth.
Their portfolio features prominent companies such as Novozymes, Chr. Hansen, and Symphogen. Novo Holdings provides capital, strategic advice, and operational assistance, drawing on its deep industry expertise and expansive network. The investment team, composed of professionals with backgrounds in science, medicine, and finance, ensures robust support for the growth and success of its portfolio companies.
Learn more about Novo Holdings & Novo Nordisk Foundation.
Andreessen Horowitz, commonly known as a16z, was founded in 2009 and is headquartered in Menlo Park, California. The firm manages over $16 billion in assets and focuses on investing in technology and life sciences companies at various stages, from seed to growth.
The portfolio of a16z includes notable companies like Airbnb, Coinbase, and Pinterest, as well as biotech companies like Apeel Sciences and Freenome. Andreessen Horowitz offers comprehensive support to portfolio companies, including access to a network of industry experts, operational guidance, and strategic advice. The investment team comprises professionals with backgrounds in technology, healthcare, and finance, providing a well-rounded approach to venture capital.
Learn more about a16z.
Established in 1876 and based in Indianapolis, Indiana, Eli Lilly & Co. is a global leader in the pharmaceutical industry with a dynamic venture capital arm. The company focuses on investing in early to growth-stage biopharmaceutical and healthcare enterprises, driving innovation in drug development and medical technologies.
Eli Lilly & Co.'s venture capital division offers financial backing, strategic guidance, and access to the company’s extensive resources and network. Their investment strategy prioritizes pioneering therapies and medical advancements that address unmet medical needs.
Among their notable portfolio companies are Prevail Therapeutics and Avid Radiopharmaceuticals. The investment team at Eli Lilly & Co. includes seasoned professionals with expertise in science, medicine, and finance, providing comprehensive support to their portfolio companies.
Learn more about Eli Lilly & Co’s VC division.
Founded in 1969 and headquartered in London, Eight Roads Ventures is a global venture capital firm specializing in healthcare and technology investments. With over $6 billion in assets under management, the firm invests in companies across various stages, from early to growth.
Eight Roads Ventures' portfolio features companies such as WuXi AppTec, Kymab, and Codiak BioSciences. The firm offers financial backing, strategic advice, and access to an extensive network of industry experts and resources, fostering the growth and success of its portfolio companies.
The investment team at Eight Roads Ventures brings together a wealth of experience from diverse fields, including healthcare, technology, and finance, ensuring their portfolio companies receive well-rounded support.
Learn more about Eight Road Ventures.
Khosla Ventures, established in 2004 by Vinod Khosla and based in Menlo Park, California, specializes in early-stage investments in technology and healthcare sectors. With over $5 billion in assets under management, the firm boasts a diverse portfolio featuring companies like Guardant Health, Impossible Foods, and BioConsortia.
Khosla Ventures focuses on investing in groundbreaking technologies and offers extensive support to its portfolio companies, including strategic advice, operational assistance, and access to a broad network of industry experts. The investment team at Khosla Ventures is composed of experts from science, engineering, and finance backgrounds, providing a comprehensive and innovative approach to supporting their ventures.
Learn more about Khosla Ventures.
Sanofi Ventures, the venture capital arm of Sanofi, was established in 2006 and is headquartered in Paris, France. The firm focuses on investing in early and growth-stage biopharmaceutical and healthcare companies, with a portfolio that includes Warp Drive Bio, MyoKardia, and Immunocore.
Sanofi Ventures offers not only financial backing but also strategic guidance and access to Sanofi's extensive resources and global network. Their investment strategy prioritizes innovative solutions that address unmet medical needs and have the potential to transform healthcare. By leveraging Sanofi's deep industry expertise, the firm helps portfolio companies navigate the complexities of the biopharmaceutical landscape, accelerating their path to market.
The firm is committed to fostering breakthrough advancements in medical science, supporting ventures that aim to improve patient outcomes and create significant societal impact. Through a combination of capital investment and strategic support, Sanofi Ventures plays a crucial role in driving forward the next generation of healthcare innovations.
Learn more about Sanofi Ventures.
Insight Partners, established in 1995 and based in New York, focuses on investing in high-growth technology and healthcare companies. Managing over $30 billion in assets, the firm boasts a diverse portfolio that includes prominent companies such as Twitter, Shopify, and Qualtrics.
Insight Partners offers robust financial backing along with strategic advice and operational expertise to its portfolio companies. The firm is dedicated to promoting growth and scalability, guiding startups through their expansion phases to help them reach their business objectives. By providing a combination of capital and practical support, Insight Partners enables companies to accelerate their growth and realize their full market potential.
Committed to fostering innovation and success, Insight Partners leverages its deep industry knowledge and resources. The firm plays a crucial role in advancing transformative technologies and healthcare solutions, ensuring that its portfolio companies are well-equipped to thrive in competitive markets. Their holistic approach empowers startups with the necessary tools and insights for sustained growth and achievement.
Learn more about Insight Partners.
Y Combinator, founded in 2005 and headquartered in Mountain View, California, is a prominent startup accelerator that has funded over 2,000 companies, including leading biotech startups such as Ginkgo Bioworks and Notable Labs. The accelerator offers seed funding, mentorship, and access to a vast network of investors and industry experts.
Y Combinator's program is designed to help early-stage startups refine their business models, develop their products, and prepare for subsequent funding rounds. With a robust alumni network and extensive resources, Y Combinator serves as a crucial partner for biotech entrepreneurs. By leveraging their deep expertise and connections, Y Combinator provides startups with the strategic guidance and support necessary to thrive.
Focused on fostering innovation and growth, Y Combinator assists startups in navigating the complexities of the biotech landscape. Their comprehensive approach ensures that startups are well-equipped to achieve their goals and make significant strides in their respective fields.
Learn more about Y Combinator.
Founded in 1984 and headquartered in Boston, Bain Capital Ventures specializes in investing in technology and healthcare companies across various stages, from seed to growth. With over $6 billion in assets under management, the firm has a diverse portfolio that includes notable companies like DocuSign, Rapid7, and Jet.com.
Bain Capital Ventures provides not only capital but also strategic guidance, leveraging its extensive resources and network to help portfolio companies thrive. The firm's investment strategy targets disruptive innovations with the potential to transform entire industries. By focusing on groundbreaking technologies and healthcare advancements, Bain Capital Ventures plays a pivotal role in driving industry change.
Committed to fostering growth and success, Bain Capital Ventures offers comprehensive support to its portfolio companies, ensuring they have the necessary tools and insights to achieve their objectives. The firm's holistic approach combines financial backing with strategic expertise, enabling startups to navigate their growth journeys effectively.
Learn more about Bain Capital.
Founded in 1999 and headquartered in San Francisco, Versant Ventures specializes in investing in early-stage biotechnology and healthcare companies. With over $2 billion in assets under management, the firm boasts a portfolio that includes companies such as Audentes Therapeutics, Crinetics Pharmaceuticals, and Atreca.
Versant Ventures is dedicated to building transformative companies by working closely with entrepreneurs and providing strategic guidance, operational support, and access to an extensive network of industry experts and resources. This collaborative approach ensures that startups receive the support they need to develop and thrive.
Focused on driving innovation in the biotech and healthcare sectors, Versant Ventures leverages its deep industry knowledge to help portfolio companies navigate the complexities of growth and development. By prioritizing breakthrough technologies and therapeutic advancements, the firm plays a crucial role in shaping the future of healthcare.
Learn more about Versant Ventures.
Actually approaching a VC firm or VC investor can feel like a daunting task for biotech startups, but with the right strategies, you can feel more confident in your idea, pitch, and company. Hopefully, with the right strategy, you can increase your chances of securing funding. Here are some best practices for seeking VC investment, crafting a compelling pitch, and building relationships with potential investors.
Not all VC firms are the same. Some specialize in specific industries or investment stages of business development. Research and identify VC firms that have a strong track record in biotech investments and align with your startup's stage and goals. Understanding a firm’s portfolio and investment criteria will help you target those most likely to be interested in your venture.
Investors will scrutinize every aspect of your business, so be prepared with detailed information about your technology, market, competition, financials, and team. Ensure your business plan is robust and includes clear milestones, financial projections, and a well-thought-out exit strategy. Have all necessary documents, such as pitch decks, financial statements, and regulatory plans, ready and well-organized.
Your pitch should tell a compelling story about your startup, highlighting the problem you are solving, your unique solution, and the impact it can have. Clearly articulate your value proposition and how your technology or product stands out in the market. Use real-world examples and data to support your claims. Be true to yourself, your story, and your vision.
VCs invest in people as much as they do in ideas. Highlight the strengths and expertise of your management team if you have one. Showcase their backgrounds, achievements, and how their skills complement each other. And if you have advisors or key partners, mention their contributions and the value they bring to your startup!
Showcase any progress or traction you’ve made. This could include pre-clinical or clinical trial results, partnerships, customer feedback, or pilot studies. Demonstrating that you have made significant headway reduces perceived risk and makes your startup more attractive to investors.
Time is limited during pitches, so make every word count. Avoid jargon and overly technical language unless necessary. Your goal is to make your business understandable and exciting to someone who may not have deep technical knowledge. Practice delivering your pitch succinctly, covering all key points without overwhelming your audience.
Networking is crucial in the VC world. Attend industry conferences, biotech events, and investor meetups to connect with potential investors. Building relationships before you need funding can make it easier to approach VCs later. Use platforms like LinkedIn to follow and engage with investors and industry leaders.
Cold emails and unsolicited pitches are less effective than introductions through mutual connections. Leverage your network to get warm introductions to VCs. If you have mentors, advisors, or other investors, ask them to introduce you to potential VCs.
After initial meetings, follow up with investors to keep them updated on your progress. Send periodic updates about milestones achieved, new partnerships, or significant developments. Keeping potential investors in the loop shows that you are making progress and keeps your startup on their radar.
Transparency and honesty build trust with potential investors. Be upfront about challenges and risks, and how you plan to mitigate them. Investors appreciate founders who are realistic about their business and its potential hurdles. Approach your target biotech VC firms with thorough preparation, a compelling pitch, and strategic relationship-building.
While nothing is guaranteed, doing so can make a huge impression. If it doesn’t lead to a proposal, it can ultimately increase your chances of securing the funding you need to grow and succeed. VCs talk with one another about companies they’ve heard from. Further, excluding any important information that would be meaningful to an investor will certainly be uncovered during the due diligence phase of a potential investment.
There’s a chance you’re not generating revenue right now. It’s the nature of the beast that is biotech. It’s also probably the reason you’re reading this blog post. If you’re starting to raise a round—whatever the stage—it’s going to be challenging. Worse, it takes up all of your time. Time you could spend at the bench.
But because this industry is so capital-intensive, you’re going to need funding. And often, you’re going to need a lot of it. Developing a new therapeutic or medical device takes millions of dollars or more, and a whole lot of time, and fundraising can sometimes be the only way to keep the lights on.
Thankfully, there are a wide variety of biotech funding options available. Sadly, there’s a chance it’s going to be difficult to raise the money. If you’re a biotech startup founder looking to fundraise, and you're going to go the venture capital route, use our criteria and list above as a starting point.
Guess what? Excedr actively works with venture-backed laboratories. This is because our leasing program is a strong fit with any company looking to use their money wisely. Leasing specialized, often highly expensive equipment needed for modern research and drug development is a great way to extend any fundraising round, from pre-seed to Seed to Series A, B, C, and beyond.
By skipping the large upfront investment required to buy an LC/MS system or flow cytometer, biotech startups can keep more cash on hand, and monthly payments make it simpler to manage cash flow. Simply put, you can keep more cash on hand, extend your most recent fundraising round, and raise a future round at a more favorable valuation (thanks to our non-dilutive leasing terms).
Additionally, our white-glove service means you’re a VIP as well. This white-glove service extends beyond Excedr to include our Partner Network.
If you’d like to learn more about how leasing can extend your cash runway (e.g., make your funding round last longer) and alleviate cash burn (e.g., slow down your spending), let us know! We can put together a customized lease that fits your needs.
