7 ms·

I think the biggest opportunity for seed investors today is actually in bio, but most people won't touch it as there's a perception you have to be a dr or phd t

I think the biggest opportunity for seed investors today is actually in bio, but most people won't touch it as there's a perception you have to be a dr or phd to know the space. Which is an unfortunate misconception, bc the opportunity is huge. A program educating seed investors on bio would be super valuable Biotech venture returns have outperformed techs in recent years, with more IPOs, higher m&a returns and shorter time to exit. Counterintuitively for those who think bio is too capital intensive and it takes too long to get drugs approved, the best exits have been early stage deals where under $20-30M is invested I know a few seed investors who've had several high multiple exits less than 18 months from seed, including one that sold for over $1B in less than 18 months Despite this exit environment, the number of seed / early stage investors in biotech has not grown in over a decade. VCs have responded by just seeding / starting companies in house, but there are tons of great seed stage companies that just go unfunded bc people are intimidated by biotech

psadri 9y ago
How/where do you get access to bio seed investment opportunities?
- aaavl2821 9y ago
  The lowest-hanging fruit is through accelerators / incubators, although no one has quite cracked the accelerator model for biopharma yet: diagnostics / tools / software can be great investments, but biopharma / therapeutics is where the real opportunity is though it is the most idiosyncratic business. While these are more accessible sources, they are also more picked over and investors need to rely on their own diligence to filter for quality: Indie bio, qb3, Jlabs, illumina accelerator, start x, y combinator are prominent Bay Area ones The best opportunities come from relationships with influential, well networked academic researchers; venture investors; r&d execs at big pharma; and successful serial entrepreneurs. If you have any of those in your network, that's the best place for high-quality deals. However big VCs often have established relationships with these folks and they will seed the most promising ideas Universities also have a lot of events supporting startups and these can be a good way to get involved in the ecosystem and build a network. If you talk to enough phd students and postdocs you'll get a sense of what opportunities are out there. phd students and postdocs are an incredibly under appreciated group, and they have a ton of potential to start great companies if they get the right support. If you get smart on the space and make an effort to meet these folks you'll find many seed opportunities Obviously these are not ideal paths. One of my passion projects is running a program that connects promising young scientists to life sci VCs to explore startup ideas. The main goal is mentoring young scientists as PhD students / postdocs are a woefully under appreciated sector of our workforce, but a few interesting startups have emerged from this as well.
rfc 9y ago
Just adding my own slight perspective here. We launched a bootstrapped genome sequencing facility August last year. With barely any advertising and word of mouth, we're clearing around 8% MoM revenue growth and are forecasting ~$350k-400k in revenue this year. Biggest problem? We don't have enough float to keep up with demand. There's significant demand in the life sciences & biotech space right now - especially with the confluence of software and bio. It's been very hard to talk to investors because (no offense) they hear life sciences, bio, genetics, etc. and they turn away because it's out of their comfort zone of investing. If you're an angel or seed investor, I'd highly recommend diving in and learning more around the problems of the space. They are large, lucrative, and have high probability of disruption compared to current status.
- fudged71 9y ago
  I feel exactly the same way about Manufacturing. It's a massive industry, there are a ton of viable new technologies on the market, but very very few investors are even looking at the early stage because they don't understand it. I'm blown away at the new technologies I'm seeing.
  - rfc 9y ago
    100% agree. There's a lot of regulatory hurdles in that field but, much like what SpaceX did, if you can find ways to disrupt it, the disruption is 10-100x better than current state.
  - rokkitt 9y ago
    Could you expand on this at all and/or point me in the direction of where to read up on new manufacturing technologies?
    - fudged71 9y ago
      I'm in the additive manufacturing industry, things are really heating up. But there are plenty of other opportunities in related fields that I've barely heard of. Aerospace, medical, defense, auto etc are all driving some big changes in how their parts are made because of new regulations and opportunities.
danieltillett 9y ago
I am a seed investor, a former academic in the area of biotech, an experienced biotech entrepreneur, and I won't touch biotech with the proverbial 10 foot pole. The reason why is my fellow investors don't have a clue and so back all the wrong companies. If you try and pick the good ones the end result is they run out of money while the ones that hype garbage to the moon suck up all the cash. I should say this is an Australian perspective and I do realise that in other markets things might be different.
- aaavl2821 9y ago
  Australia sounds quite different than the US. In the US good seed-stage startups get a lot of funding (some of these deals are European or Chinese companies but most are US): almost $1B has been invested into large seed ($5M+) and Series A rounds for biotech startups in January 2018 alone: http://newbio.tech/funding.html http://newbio.tech/funding.html And these companies have been getting acquired / going public at very robust valuations: http://newbio.tech/blog/biopharma_opportunity.html http://newbio.tech/blog/biopharma_opportunity.html The good biotech seed investors I know have been doing very well and involved in several companies acquired for 10 figure sums Disclaimer: links above are to my posts / analyses
  - danieltillett 9y ago
    Australia is just getting started developing a investor ecosystem. In the last few years there are a few entrepreneurs like me that have have started giving back to build the ecosystem, but relatively few. The real blocking point is Series B and beyond where there is very little true VC money. Biotechs really need support at this stage and it forces far too many Australian biotechs to list on the ASX at a very early stage.
    - aaavl2821 9y ago
      Are there many therapeutics startups in Australia? I remember seeing a decent amount of diagnostics / device pitches from australian companies (or device firms that listed on ASX) but don't remember seeing many drug developers (not that I have a large sample size to draw from). If there are interesting therapeutics startups in Australia I am sure that US biotech VCs would take a look, as there is a bit of a crowded series a market here (lots of VC money but not many good seed-stage startups) and many VCs are looking to europe for science or startups

psadri 9y ago

How/where do you get access to bio seed investment opportunities?

aaavl2821 9y ago
The lowest-hanging fruit is through accelerators / incubators, although no one has quite cracked the accelerator model for biopharma yet: diagnostics / tools / software can be great investments, but biopharma / therapeutics is where the real opportunity is though it is the most idiosyncratic business. While these are more accessible sources, they are also more picked over and investors need to rely on their own diligence to filter for quality: Indie bio, qb3, Jlabs, illumina accelerator, start x, y combinator are prominent Bay Area ones The best opportunities come from relationships with influential, well networked academic researchers; venture investors; r&d execs at big pharma; and successful serial entrepreneurs. If you have any of those in your network, that's the best place for high-quality deals. However big VCs often have established relationships with these folks and they will seed the most promising ideas Universities also have a lot of events supporting startups and these can be a good way to get involved in the ecosystem and build a network. If you talk to enough phd students and postdocs you'll get a sense of what opportunities are out there. phd students and postdocs are an incredibly under appreciated group, and they have a ton of potential to start great companies if they get the right support. If you get smart on the space and make an effort to meet these folks you'll find many seed opportunities Obviously these are not ideal paths. One of my passion projects is running a program that connects promising young scientists to life sci VCs to explore startup ideas. The main goal is mentoring young scientists as PhD students / postdocs are a woefully under appreciated sector of our workforce, but a few interesting startups have emerged from this as well.

rfc 9y ago

Just adding my own slight perspective here. We launched a bootstrapped genome sequencing facility August last year. With barely any advertising and word of mouth, we're clearing around 8% MoM revenue growth and are forecasting ~$350k-400k in revenue this year. Biggest problem? We don't have enough float to keep up with demand. There's significant demand in the life sciences & biotech space right now - especially with the confluence of software and bio. It's been very hard to talk to investors because (no offense) they hear life sciences, bio, genetics, etc. and they turn away because it's out of their comfort zone of investing. If you're an angel or seed investor, I'd highly recommend diving in and learning more around the problems of the space. They are large, lucrative, and have high probability of disruption compared to current status.

fudged71 9y ago
I feel exactly the same way about Manufacturing. It's a massive industry, there are a ton of viable new technologies on the market, but very very few investors are even looking at the early stage because they don't understand it. I'm blown away at the new technologies I'm seeing.
- rfc 9y ago
  100% agree. There's a lot of regulatory hurdles in that field but, much like what SpaceX did, if you can find ways to disrupt it, the disruption is 10-100x better than current state.
- rokkitt 9y ago
  Could you expand on this at all and/or point me in the direction of where to read up on new manufacturing technologies?
  - fudged71 9y ago
    I'm in the additive manufacturing industry, things are really heating up. But there are plenty of other opportunities in related fields that I've barely heard of. Aerospace, medical, defense, auto etc are all driving some big changes in how their parts are made because of new regulations and opportunities.

danieltillett 9y ago

I am a seed investor, a former academic in the area of biotech, an experienced biotech entrepreneur, and I won't touch biotech with the proverbial 10 foot pole. The reason why is my fellow investors don't have a clue and so back all the wrong companies. If you try and pick the good ones the end result is they run out of money while the ones that hype garbage to the moon suck up all the cash. I should say this is an Australian perspective and I do realise that in other markets things might be different.

aaavl2821 9y ago
Australia sounds quite different than the US. In the US good seed-stage startups get a lot of funding (some of these deals are European or Chinese companies but most are US): almost $1B has been invested into large seed ($5M+) and Series A rounds for biotech startups in January 2018 alone: http://newbio.tech/funding.html http://newbio.tech/funding.html And these companies have been getting acquired / going public at very robust valuations: http://newbio.tech/blog/biopharma_opportunity.html http://newbio.tech/blog/biopharma_opportunity.html The good biotech seed investors I know have been doing very well and involved in several companies acquired for 10 figure sums Disclaimer: links above are to my posts / analyses
- danieltillett 9y ago
  Australia is just getting started developing a investor ecosystem. In the last few years there are a few entrepreneurs like me that have have started giving back to build the ecosystem, but relatively few. The real blocking point is Series B and beyond where there is very little true VC money. Biotechs really need support at this stage and it forces far too many Australian biotechs to list on the ASX at a very early stage.
  - aaavl2821 9y ago
    Are there many therapeutics startups in Australia? I remember seeing a decent amount of diagnostics / device pitches from australian companies (or device firms that listed on ASX) but don't remember seeing many drug developers (not that I have a large sample size to draw from). If there are interesting therapeutics startups in Australia I am sure that US biotech VCs would take a look, as there is a bit of a crowded series a market here (lots of VC money but not many good seed-stage startups) and many VCs are looking to europe for science or startups