When is the best time to transition from the academic research lab and found a biotech startup?
How do biotech startups find the right team members?
How does BaseLaunch help to build biotech startups?
What do biotech startups need to know when raising money?
”The more ways into venture funds you have, the better. BaseLaunch has that.Stephan EmmerthPhD Director Therapeutic Innovation and BaseLaunch
Developing new therapeutics costs millions of dollars. Getting these funds used to be easier for biotech startups a couple of years ago. Now, the markets are a bit more complicated. Investors are looking into individual assets, the financing rounds are a bit smaller. Despite that, venture founders shouldn’t panic, Stephan advises: “There are enough venture funds out there with enough money.”
Eventually, two factors will determine whether biotech startups find funding: “It comes down to the quality of the science and the quality of the team.” When biotech startups look for an investor, they should approach specialists in their field.
Getting into business with a biotech venture fund brings additional advantages: Your funding partner will usually take a seat on the board. “You want to have people in these boards who understand the business, the science, the markets and the technologies well enough to make informed decisions,” says Stephan. Another advantage: biotech venture funds are very well connected and can help with the next fundraising round. “Fundraising is hard, and it goes through networks,” Stephan says.
Which role does the ecosystem play for a biotech startup?
The life sciences and biotech ecosystem plays a significant role. Biotech ventures are risky, so convincing professionals to leave their secure jobs in larger companies and join a startup can be challenging. Limited funds (and limited salaries) are just one reason. The other is the lingering question of what happens if the startup fails. A fluid ecosystem provides opportunities for professionals. “It lowers the bar for people to take risks. If it doesn’t work, they will find their next job,” says Stephan.
Sai adds: “Biotech is a complicated and unique business space. It will be a long road towards progress, and many intermittent people will be along the way.” While much time and attention go to founders and CEOs, all positions, whether research associates, regulatory specialists, translational experts, or scientists, are critical for success. “Having an ecosystem is helpful because where there is an ecosystem, there is always another job. Basel has a very good ecosystem, but I hope it doubles or triples over the next ten years.”
(Listen to this part from minute 23:04)
Which advice should biotech startups follow?
Biotech startups shouldn’t be afraid to talk to people early on and ask for advice. “In biotech, the pathway to success is so long, and it takes many things to get there. Someone trying to quickly copy something you do is rare,” Sai says.
However, Sai recommends doing your due diligence on your advisors. “You may not want to take the advice of people who succeeded because sometimes their success might have been luck or circumstance, but their success won’t necessarily translate for you.”
On the other hand, failed entrepreneurs have learned a lot during their journey. In the US culture, they are perceived as attractive to investors and employers because they know which mistakes to avoid.
Stephan adds that in the beginning, many people will be willing to have a coffee, talk about your project and provide guidance. “Eventually, you must set up a project plan or look into pharmacology. The important transition starts when you do the work.”
There are lots of things you can outsource, Stephan adds. “But you cannot outsource decision-making.” Sometimes, the inputs you get will contradict each other. “You need to make up your mind and make your own decisions.”
(Listen to this part from minute 31:46)
At which point in time should biotech startups join an incubator?
Biotech startups should think about joining an incubator early when it’s clear that there are still many gaps to bridge. “If you need to further develop on all aspects, from science to business to anything else, then it makes sense to apply for BaseLaunch,” says Stephan.
If your startup is already far progressed and can convince funds to invest, your biotech startup might have outgrown the incubator phase.
(Listen to this part from minute 29:16)