Biotech investing differs from tech investing.

There’s often no revenue traction to assess.

The startup must navigate the FDA path while dealing with cutting-edge devices and therapeutics.

Here are some myths of biotech investing:

Myth 1-Biotech startups are building companies.

In many cases, the biotech startup will sell during the clinical trials or at FDA approval.

They rarely proceed to launching a business.

Myth 2- Biotechs take much longer than tech companies to exit.

Most biotech startups exit in the 3 to 5 year range, which is often shorter than tech companies.

Myth 3- Regulatory is the key hurdle to overcome.

In reality, it’s proving the therapeutic works.

Most drugs fail in clinical trials and never reach FDA submission.

Myth 4-Reimbursement is the key to a successful biotech therapy.

In reality, it’s showing value to the physician and patient through high efficacy and low toxicity, which is the key to success.

Consider these myths in analyzing biotech startups for investment.

 

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.