Financing for a biotechnology startup
Biotechnology startups are an integral part of the medical and research industries. They’re often pioneering their respective fields to develop new products or treatments to make the world a better place, like providing psychological support for safety-sensitive patients. Their hard work contributes to better health standards and increasing life expectancy. If you’re the founder of a biotech startup and stuck on where to go for capital, this article will give you a few sources of fundraising to get your startup off the ground.
Search for Industry Grants
Are you looking for grants for your biotechnology startup? If not, this is a good place to start. There are many options, such as corporate, non-profit, and federal. Before you dive into these, you’ll have to do a bit of research to determine which is appropriate for your startup. There is one route that many startup founders go down, and that is applying for SBIR and STTR grants.
The National Science Foundation (NSF) is another great resource for founders looking to fundraise capital for their biotechnology startup. NSF offers free consultations for potential business owners to help them understand the guidelines and processes. It’s important to note that not all NSF grants are free.
If you’re a biotechnology startup based in North Carolina, you’re in luck. Of the many North Carolina grants you can apply to, NC IDEA MICRO and NC IDEA SEED are great options for entrepreneurs testing a big new business idea or scaling a startup.
Collaborate with a University
Another option for raising capital for your biotechnology startup is by partnering with a research university, such as Duke University or the University of North Carolina at Chapel Hill. One important, and maybe obvious, thing to note is that the academic institution must offer a biotechnology program. The partnership is common as the strategy benefits both the university and the startup. It is an excellent alternative if you are uncomfortable working with a larger organization that might require more control of your startup.
Collaborating with the university will provide the biotechnology startup with medical devices, diagnostics, and guidance on strategy. Furthermore, they often offer lab spaces that you can use alongside facility, students, and other startups to further your research and business. In return, the university gets access to the groundbreaking research you’re doing.
Venture Capital for Life Science Startups
If you have big dreams that need a lot of capital investment for your biotechnology startup, this might be the route for you. Before we get into this, we must say that this option for fundraising capital could be an entire article on its own, and it isn’t without its drawbacks. While you can often raise large amounts of funding through venture capital, you may need to give up control over your business in return for it. Additionally, investors want to see a high return on their investment with heavy penalties for failing to deliver.
Venture capitalists will engage with biotechnology startups when they know the business is ready to enter the market. Because of this, we’d recommend contacting a venture capital firm when you have proof of concept for your product. Having a tangible product and present concrete results will help you raise the amount of capital you want at the valuation you want. Top biotechnology venture capital firms include:
Pro Tip: Practice Your Pitch and Ask Experts
When you’re establishing a startup, you’re likely to have many questions and it may feel like you don’t know where to begin. Therefore, we suggest contacting established biotechnology experts to help guide your way. We understand it could be difficult to attract an investor if you are unprepared; your preliminary proposal may not make much sense without providing context, and may not be convincing enough to secure funding. Even if the startup has a great idea and a great founding team, there might still be investment hesitations.
Working with seasoned scientists in your field will help you gain confidence and gain a better understanding of the landscape when it comes time to fundraise for your biotechnology startup. Another benefit of this is you’ll notice more opportunities come your way as a result of networking. A great place to start would be attending global conferences like the BIO International Convention or going to local networking events.
Which Fundraising Opportunity Is Best For Your Biotechnology Startup?
To be successful in fundraising for your biotechnology startup, you must recognize what form of capital is right for your business. Each business has costs, development expenses, and other factors that impact how much capital they’ll need, and where they’ll get it from. Other items that may impact how much capital your startup needs may be raw materials, machinery, lab equipment, onboarding or consulting highly-trained experts, etc.
In addition, the capital must also fund clinical trials, which are the company’s intangible assets. We suggest doing a deep dive into your budget and other areas that require funding for your business to thrive.
SciMed is an Expert When it Comes to Biotech
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