I. What changes - Biotech VC Investors

The Landscape of Biotech VCs

First of all, if you want to start a biotech startup, sooner or later, you will need to raise capital from investors, who are largely biotech venture capitalists (VC). In contrast to all the AI and tech startups, you cannot start a biotech startup in your parents’ garage, especially in drug discovery and wet-lab-focused products. Therefore, it is important to have a big picture of the landscape of biotech VC and ask the following questions - how much capital is there? Who are the investors and decision-makers?

In the U.S., around 90 biotech VCs have AUM ≥ $1B

There are approximately 90 biotech venture capital firms managing assets of $1 billion or more, according to PitchBook. That’s more than $90 billion in assets under management (AUM) for biotech! So, if you have an idea with great potential, you should not be shy about raising $100 million because it is only 0.1% (or less) of the capital out there looking for promising biotech startups to invest in.

👉 Quick tip: If you’re considering a career in venture capital or you’re a founder looking to tailor your pitch to VCs, it’s important to start with a targeted list of firms that align with your background, interests, and business goals. Begin by compiling an Excel sheet of biotech VCs, then narrow it down by considering factors like focus area, investment stage, business model, and location. Much of this information can be found on the firms’ websites or inferred from their active portfolios. While you might not uncover everything, a simple search should provide a solid sense of whether the firm might be a good fit. And when you have that initial conversation with an investor, don’t hesitate to ask for details! Each firm has its own structure and culture, which influence its investment strategies and portfolio choices.

Next, let’s talk about the people behind the VCs.

Players Behind These VC Firms

It is a rarely touched area of who made up biotech VCs and who the decision-makers are. Are these people just undergrads taking a 9-to-5 job? Are the decision-makers from wealthy families? How many of them actually know the science side of biotech startups rather than the business side? It turns out that most of the people in a biotech VC firm actually will understand what you are talking about, if you pitch in front of them.

Let me break down some key insights for you.

• Academically, advanced degrees are common but not mandatory. PhDs are the most prevalent (50-75%), followed by MDs and MBAs (10-35%).

• At the Associate level, they typically have some post-graduation work experience. Consulting is a common background, with around 30% of Associates coming from this field. Operating experience in Pharma or Biotech accounts for only 10-15%, while about 15% have prior VC experience, and 10% come from other financial sectors like Private Equity or Investment Banking.

• In senior roles like VP and Principal, 20% have moved up from Associate positions, often within the same firm. Operating experience has become more prevalent, nearly doubling, while partner-level professionals frequently have prior VC experience (40%) or operating roles in Pharma (30%) or Biotech (45%). Consulting and financial backgrounds each account for about 30% of Partners.

Do you want to know more about a day working in a biotech VC? An interview with a friend who has a PhD at Oxford and is now working in a big biotech VC firm is cooking under the hood - remember to stay tuned!

Read more about the exit strategy of biotech companies here.

II. What never changes - timeless wisdom

🤔 Sometimes being ambitious is not good (?)

Is it a good thing to be ambitious?

My friends living in LA told me everyone there was so used to having Brad Pitt or other Giga movie stars sitting next to them at a Starbucks that they wouldn’t even bother to care. Nobody will shake a bit in front of these movie stars. Everyone in Hollywood is ambitious enough to want to be the next Robert Downey Jr., so their noses are pointing to the sky.

Like the mentioned top university students, they aspire to be the next Jeff Bezos or famous dropouts who change the world. So, each other is giving each other the least frank possible. Oh, you are developing a cancer drug? Cool. Me too. And I think mine is a better one. Tell me more so I can dismantle yours and absorb your talents to my advantage. I remember one time I was taking notes of a postdoc’s presentation at a very top school and was warned not to take notes because it would make the speaker uncomfortable. 😮

Continue reading here…

III. Book Quotes

Here are some book quotes for you to ponder over the weekend.

Thanks for reading,

— Anthony