Since the COVID-19 pandemic started, biotechnology companies have received more attention than ever, even though vaccines are just one small component of the life sciences. You’d have to be willfully ignorant not to notice the many headlines about life sciences companies as they break ground and release research.
While the burgeoning field of life science shows a lot of promise, it’s not smooth for every company, however. Startups and smaller companies are especially vulnerable to the current uncertain economy.
An uncertain or even unstable economy doesn’t mean that the next big idea has to wait. But, with the life sciences, lives could be at stake if those ideas wait. Plus, establishing a company in a struggling economy can lead to a big payoff in the future.
But when it comes to getting off the ground, life science and biotechnology startups may have to be flexible and consider alternative funding sources. This is especially true if traditional fundraising opportunities are scarce.
Life science startups have several options, including multiple smaller donors rather than angel investors funding a more significant portion of startup costs. Tech incubators and government funding are also options. For example, the Washington State Department of Commerce and Find Ventures recently named ten tech startups to participate in their Equitable Innovations Accelerator.
Seeking investors outside of the United States may work for some life science companies. Consider how ProfoundBio raised $70 million in capital from several sources, including Sequoia Capital China.
Aside from funding, life science companies should consider adjusting their plans to fit their budgets. For example, Sana Biotechnology recently scrapped plans to build a facility in the Bay Area, instead opting to develop in relatively more affordable Seattle.
Thinking beyond Silicon Valley is advantageous in more ways than one: many up-and-coming and successful life science firms are established in the Seattle area. In addition, partnering with established biopharma companies in the area may be cost-effective.
Of course, no one expects startup founders to know about every possible opportunity, especially if they’re new to raising capital or working in the life sciences. That’s where consultants such as David Johnston can help. Johnston was previously CFO for ImmunoGen, which he helped go public, and sat on the board of non-profit Tissue Banks International.
While he now heads his own consulting firm, David Johnston has three decades of experience in life sciences, making financial decisions or providing guidance to those in need. This experience puts Johnston in a unique position to help other emerging life science companies, especially those in need of creative financing strategies.
A consultant like David Johnston can also offer advice to turn a startup’s high-minded plan into actionable steps. Sometimes just strengthening a strategy is enough to appeal to investors that would otherwise pass on an opportunity. Once a company successfully makes it past seed funding, it will have a track record that can attract more investors.
However, getting over this hump is difficult for some life science companies without outside help. Fortunately, that help exists.
For more information, check out DBJ Consulting.