Founders in The biotech industry is no stranger to challenges. Success is impossible to achieve without significant investment, time and technical expertise. Although life science startups managed to emerge relatively unscathed last year, the ongoing economic climate makes fundraising a never-ending marathon. Inflationary market dynamics and ongoing fiscal tightening continue to pose significant risks to capital commitments. A successful increase in 2021 feels like ancient history.
As a venture capitalist specializing in early-stage life science companies, I work with startups that have the potential to revolutionize the world against biothreats, pandemics and more. Every day I see new biotechnology that inspires my team and our investors to put capital to work. Many of these startups were well capitalized last year but are now facing difficulties as they seek to travel.
To ensure survival, it is important to explore alternative funding methods instead of relying solely on classic fundraising. This is especially true for biotech startups, where investment needs are higher and success timelines can be much longer.
If you are an entrepreneur in the biotech industry, it may be time to make practical pivots to ensure your business can thrive. Here are five strategies that can help your biotech startup navigate a cooling fundraising environment:
To ensure survival, it is important to explore alternative funding methods instead of relying solely on classic fundraising.
1. Set lower fundraising goals
During an economic downturn, it may not be possible to raise a large amount of money, and the time and resources you invest in fundraising could be better spent on important business initiatives. By raising less, you can prioritize your survival, conserve your most valuable resource (time), and keep your focus on meeting short-term inflection points. With a smaller pool of investors, you can also maintain a stronger influence on your company’s strategy.
2. Target experienced investors
As you travel, it’s critical to focus on building relationships with investors who share your vision and can offer more than just capital. Investors experienced in your industry can provide valuable guidance and connections to help you navigate challenges and take advantage of opportunities – these types of investors are valuable in a downturn as they can advise you on technology-specific strategies.