Understanding How to Fundraise in Biotechnology

Funding and fundraising are key for biotechnology companies to bring their innovations to life, to contribute to breakthroughs and save lives. However, research and development is a costly process and numerous are the companies which are halted at different stages of their business life cycle. This is particularly challenging for startups or small companies which have high operating costs and little to no revenues. 

Below is a non-exhaustive list on fundraising opportunities:

  1. Government grants: governments can offer significant funding sources based on how well your research stage fits the grant proposal. Bear in mind this is a highly competitive process and you should expect multiple submission rounds, audit requirements and interview processes. These grants vary by country and stage (discovery, development and commercialization), so look out for the applications windows and deadlines. Some grant application tips include scientific merit (explain in layman and scientific terms the science behind your idea) and eligibility (make sure your research/idea fits with the grant criteria for example that your proposed timescale aligns with the funding time). 
  1. Non-government grants: government grants have the caveat of being limiting (having to use funding on specific aspects), highly competitive (low success rate) and onerous validation process (audits can be expensive). Non-governmental grants can be delivered by charities, agencies, family foundations, corporate foundations. Partnering with corporate firms will allow you to have one foot in the industry which may facilitate future rounds of fundraising and commercialisation later on.  
  1. Incubators and accelerators: provide early stage support desperately needed for startups. Incubators cuts operational costs, gain mentorship support and develop business exposure. Accelerators on the other hand, will be useful to more advanced startups with a minimally viable product (MVP). A MVP is characterized with enough features to attract early-adopter customers and used to validate an idea in the product development cycle.  

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4. Private investment: this is particularly useful to medicine/clinical based companies who are racing the clock to not lose a competitive advantage over other startups. To maximise your chances of attracting investors, you should network by giving and attending presentations at industry conferences. What better way to learn more about the industry, understand any competition and meet future investors? Corporate companies such as Pfizer, AstraZeneca and Novo Nordisk also invest in biotech startups so look out for opportunities. 

5. Partner with pharmaceutical companies: multinational pharmaceutical companies spend substantial amounts on research and development (R&D) to ensure that their products and services remain cutting-edge. To maintain their competitive advantage, they often turn to startups for novel ideas and innovations in the field. For example, you may collaborate on clinical trials and have access to their resources (labs, supplies, resources). However, everything comes with a cost and you may lose some intellectual property (IP) rights.