Newsletter Editorial, October 2020
At BII, we help start-ups address the key challenges in the transition of science to products that benefit people and society.
The biggest challenge for any start-up is fundraising. In the past two years, we have worked to establish an incubator that can help the many promising early-stage companies break through this fundraising barrier. We have celebrated the start-ups in our portfolio that have successfully raised additional seed or series A funding to continue their journey as BII alumni.
Early-stage life science is a challenging space because it comes with very high risk and requires serious capital to reach the market. Our experiences in the past years have made it even clearer that two important points often are what keeps the founding teams from raising funding – and it has nothing to do with the scientific idea.
Founding teams often lack the competencies needed for commercial success: The founders of BII portfolio companies are an accomplished group. They have had scientific success, raised significant grant funding, and stewarded their project through a rigorous selection process at the BII. They are the core team and soul of their start-ups and absolutely required for success. But scientific excellence and an entrepreneurial spirit are not enough. For the best chance of success, these qualities should be matched with actual start-up fundraising experience. Fundraising is difficult, and a BII start-up that allies themselves with a Chairperson with previous fundraising experience is better positioned for success. This may seem obvious to the experienced biotech executive. But all too often, however, scientific teams only see the monetary price of adding such a person to the team but fail to understand the value of their experience. We encourage all our BII start-ups to hire and empower a Chairperson to help them fundraise.
People remember stories – not data: Behavioral psychologists have demonstrated this point several times in history. As human beings, we are better at processing stories than data and investors are no exception. That is why the best fundraisers tell a convincing story about how the scientific discovery will change the world. The data are the most important props in their well-orchestrated theater. The worst fundraisers, however, explain cryptic data slides and never manage to capture their audience with a vision. Here, the data are a poor actor reading lines for a role they will never get. Again, this may seem obvious to the seasoned biotech executive, but it feels unnatural for many scientific teams resulting in frustration. We aim to help all BII start-ups develop their story to investors. And we ask them to tell it repeatedly because this is rarely something you master from the beginning.
Becoming a successful start-up means acknowledging your limitations and possessing a willingness to develop. Transforming from a group of skilled scientists to an actual start-up in fundraising mode is not a given. But we are here to help. Even if it sometimes requires a bit of tough love.
Chief Business Officer, BII