Opting to start a biotech of your own can be a daunting task with a myriad of challenges to overcome before the hard work even starts—everything from securing IP to choosing a board to perfecting your partnering strategy.
This article previews the startup challenges and solutions addressed in depth in the Startup Sourcebook, which is now available. Download now.
Partnering Insight (PI): You had a unique opportunity to interview a selection of industry experts on a range of topics relevant to managing a startup successfully. What is you overarching takeaway from these interactions?
Lisa LaMotta (LL): There are so many moving parts when it comes to starting a company—especially a biotech. The complexities reach far beyond having great science, and making a misstep at any point can really impact your company for years into the future.
As a scientific founder or new entrepreneur, you really have to be considerate about who you give a place on your board, how you set up your capital structure, and where you locate your company. All of these things are harder to undo down the line and will define your corporate culture. These things can also have monetary implications, and no one wants to make a multimillion dollar mistake.
PI: There seems to a breathtaking pace of new technologies and molecular understanding of diseases. With this in mind, will the frothy investment climate for startups endure?
LL: There’s an unprecedented amount of capital that has been pouring into the sector over the last year or so, and that’s likely to continue for the foreseeable future. It’s not just a trend that has investors putting their money into biotechs or contributing to these oversized valuations, it is the revolutionary science that is really driving this. Not since the discovery of antibiotics and vaccines have we seen such a ramp up in the rate of scientific discovery.
Also driving large capital raises is the increased need for funds. The cost of doing business has never been higher for biotechs and pharmas, which are paying higher costs for talent, real estate, and manufacturing than ever before.
PI: What challenge and correlative advice do you think is most underappreciated?
LL: Every expert I spoke to for the Startup Sourcebook said the same thing: finding the right people to sit on your Board of Directors will be the biggest decision you make as a founding entrepreneur.
They all emphasized how difficult it can be to remove the wrong person from your board, and how important it is to have a strong working relationship with these people. Add into that the need for diversity, and it becomes an incredibly complex topic.
PI: What insights surprised you most?
LL: I was surprised most by the difficulty companies have in finding the right location and choosing space. The need to be in one of the areas of the country that has a concentration of biotechs, pharmas, and academic centers is real. These scientific clusters really do drive innovation. As someone who is a recent transplant to the Cambridge-Boston area, I’ve never realized how much the science permeates the air here.
The lack of available space in these innovation centers and the high cost of real estate make it more imperative than ever for companies to seek out alternatives to the traditional real estate model.
PI: Given what you learned from speaking to these biotech startup experts, and assuming that you had a worthy idea, would you recommend taking the plunge to start a company?
LL: While there are plenty of unforeseen hurdles for entrepreneurs to overcome in order to reach success, there is no greater endeavor than the pursuit of life-saving medicines. As tricky as it may be, there are plenty of great minds in the biotech-pharma community who are willing to help you out and be a guide through these obstacles. Ultimately, every life that is improved makes the entrepreneurial journey worthwhile.
These and other important startup-related issues will be a focal point at BioPharm America™ partnering conference in Boston, September 11–12 at the Boston Convention and Exhibition Center.