A business based on technologies in medicine, healthcare, and biology has its specifics. Long-term scientific research and testing of new products require enormous investment funding, while the path from the very idea to profit can take several years. It was for this reason that the growth in investments in the biotechnology market was slow in the past. Today, this industry shows positive trends caused by the revolutionary biotechnologies and scientific discoveries that appeared recently.
For example, innovative medicines that help in the treatment of cancer attract a vast number of patients and their families, as well as investors who see the possibility to receive huge dividends from funding biotechnological startups. Besides, there is a tendency to unify the biomedical business in a corporation, which strengthens the further position of the biotechnology market.
Despite the attractiveness of the market, investors rarely reach out to financing biotech startups themselves. Therefore, to attract capital, you need to think carefully about the tactics and strategy of your fundraising campaign.
Learn as Much as You Can About the Potential Investors
Starting a biotech business, you need to decide who your potential investor is and how much they correspond to your startup. Take an interest in the investor’s past. Learn whether they funded such biotech startups before and if they did, for how long.
- An investor may be interested in financing at an early or late stage of the project. Which option is better for you?
- Try to find an investor experienced in successful investments in biotech startups funding.
- Do your best to make the investor adapt to your startup, not vice versa.
Creative Startup Presentation
The fact is, you are not the only one who is looking for an investor. They are already tired of cold calls and ignoring emails from unknown companies and people. Trying to present your startup in the same way, you are probably not going to get a response from the investor.
Your first contact should impress the investor. So try to find an interesting way to present your startup. Learn whether the investor is active on Twitter, Facebook, or Instagram. Choose informal words to catch his interest. Keep in mind that at the first contact, the investor is not so much attracted by the potential profit from the investment, but rather by your sincere enthusiasm about the biotech project.
- Don’t look for a company to help find you an investor.
- Tell the investor about how your startup can improve the lives of a vast number of people who need medical care.
- Your primary weapons are your wit and charm.
Offer a Clear Funding Plan
When financing a biotech startup, carefully calculated reliable information is of interest to the investor. Your plan should be convincing, realistic, and professionally prepared. Since the investor does not have a complete understanding of the prospects of their financial participation in your startup, only an accurate 100% thought-out business plan can convince them of the feasibility of investing.
Do not have high hopes for your startup IPO. A rapid increase in the value of shares in a public biotech company needs serious preparation work. These may be, for example, successful clinical trials of a new medication. A positive test result must be confirmed by independent sources, authoritative for your potential consumers. There is no need to rush with the IPO because your preliminary forecasts may not work after the project’s launch.
- When discussing a financial plan with an investor, use the numbers from your project analysis professionally.
- Don’t be afraid to adjust and streamline your plan. Listen to the opinions and comments of the investor: you are now on the same team.
- Convince the investor of the startup’s liquidity and the way to reach it.
Manage Risk
Investing in any project, including a biotech startup, has its risks. Don’t even try to convince the investor that funding your project is safe from risks. Your financial partner will rather believe in your ability to manage inevitable risks. Your competence in understanding how to mitigate the consequences of unforeseen circumstances is a convincing argument in favor of raising funding.
Decisions to eliminate or minimize risks must have a sound legal basis. Therefore, your arguments and options, as well as the licensing structure, should be clear and logical. In this case, it’s better to use the help of a lawyer. Make sure that they know all the legal nuances of the biotech business thoroughly.
- Use the opportunity to get discounts that law firms offer in the early stages of startups.
- Risk reduction is carried out step by step for each development stage.
- Convince the investor of the feasibility of investing before risk.
Get the Right Team
The team you recruit will be implementing your grandiose plans. Try to create a balanced group of young enthusiasts and experienced professionals.
Venture investors are always attentive to those who work with their investments to turn them into net profit under your leadership. It is especially important not to make a mistake when choosing a team for a complex biotech startup that is looking for funding. There is no place for amateurs: everyone should have a level of training appropriate for a scientific organization.
- Look for employees with proper education and a worthy portfolio.
- Your people should be ready for many years of work.
Present Yourself to receive a Funding
When you are 100% ready to search for an investor, think about how you will present your startup. Focus on creating a compelling and scientifically accurate video presentation. This is the most effective tool at the stage of searching for an investor for a startup.
How can you do it? Contact us, and we will find a solution for you within any budget, as well as help you prepare for the presentation even with a very tight deadline.
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