4 ms·

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.

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
    - danieltillett 9y ago
      There are a few, but not many. You will find it a lot easier to pitch a diagnostic or device startup than a tradition therapeutic startup. I think the major killer here is the distance - Australia is just so far from anywhere other than NZ.
tlb 9y ago
You can help the ecosystem (and yourself) by trying to convince later-stage investors why the companies you believe in will succeed. Example: http://paulgraham.com/airbnb.html http://paulgraham.com/airbnb.html
- danieltillett 9y ago
  I try - I am a member of Sydney Angels [0] who are quite active, but it is a uphill battle. When it comes to biotech here flashy sales pitches are all that matter. 0.http://sydneyangels.net.au http://sydneyangels.net.au
  - pm 9y ago
    Hope they're better than the SA Angels. Half of these angels orgs function like cabals.
    - danieltillett 9y ago
      They are OK and getting better. There is a bit of lag on valuation as the old guys keep thinking it is 2005, but over the last 18 months there have been a lot of younger people and people with entrepreneurial background join. If you have a plan on how you will make money then it is worth exploring - at the very least you get to know everyone in Sydney. The biggest problem is not valuations, but cat herding. As soon as you put a dozen grey hairs in a room you will end up with 13 different opinions. This can make progress a lot slower than it should be. On the positive we have a partnership with VC fund (SA SideCar) that matches investments by the angels 1:1 with no extra extra due diligence. They automatically follow on in later rounds which is really a massive positive.
samnwa 9y ago
Daniel, help me get into the good deals. I'll fight for them to stay alive!
lpolovets 9y ago
I'm a software engineer turned VC. I'm very interested in bio startups but am not sure where/how to start, and don't want to be one of those investors that doesn't have a clue and backs all the wrong companies. If you're willing to share your thoughts on what kind of companies investors should be backing, I'd love to chat. My email is leo at susaventures.com.
- aaavl2821 9y ago
  I have worked in biotech / biopharma for the last eight years as a founder / venture investor / operator coming from a non biology / chem background. It is an amazing space that needs more smart people from other domains Most engineers / tech VCs have been making initial forays into this world through bio-IT / software driven drug dev. This is potentially a really promising space, but I'd suggest starting with biopharma bc 1) it has been generating some of the best returns in venture the last few years and 2) being good at bio-IT requires a good understanding of biopharma and drug dev Biopharma / therapeutics has generated some of the best returns in venture the last few years but is still mostly dominated by specialist VCs and has almost no seed ecosystem (most startups that end up getting venture funding are seeded within the top funds), so there is huge opportunity for seed investors to find the good opportunities outside of the top 5-10 life sci funds. The number of funded biotech startups and seed investors has not increased in a decade despite a doubling in venture funding and the best m&a / IPO environment ever. It is possible for companies to go from seed to IPO in under five years and $5-10B+ m&a in ~5-7 year timeframes (some good timely examples here: https://lifescivc.com/2018/01/two-carts-two-charts-dissecting-returns-t-cell-therapy-ma/ https://lifescivc.com/2018/01/two-carts-two-charts-dissectin...) Finding the best opportunities in biopharma requires identifying the best science. This requires investors to be at least conversational in biology, chemistry and drug development and to utilize advisors / consultants / PhDs to dive deep into specific tech To orient yourself to the world of biopharma investing, id start by reading more of Bruce booths blogs (he is the author of the post I linked above). He is one of the few life sci VCs who blogs and is also a pioneer in seed-series A biotech investing Also I'd recommend following biopharma news and funding / m&a activity. If you see any investors / people you recognize in press releases call them up. If you see a deal that interests you, take a look at the scientific publications from the company and reach out to the authors and other scientists in the space to hear their thoughts

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
  - danieltillett 9y ago
    There are a few, but not many. You will find it a lot easier to pitch a diagnostic or device startup than a tradition therapeutic startup. I think the major killer here is the distance - Australia is just so far from anywhere other than NZ.

tlb 9y ago

You can help the ecosystem (and yourself) by trying to convince later-stage investors why the companies you believe in will succeed. Example: http://paulgraham.com/airbnb.html http://paulgraham.com/airbnb.html

danieltillett 9y ago
I try - I am a member of Sydney Angels [0] who are quite active, but it is a uphill battle. When it comes to biotech here flashy sales pitches are all that matter. 0.http://sydneyangels.net.au http://sydneyangels.net.au
- pm 9y ago
  Hope they're better than the SA Angels. Half of these angels orgs function like cabals.
  - danieltillett 9y ago
    They are OK and getting better. There is a bit of lag on valuation as the old guys keep thinking it is 2005, but over the last 18 months there have been a lot of younger people and people with entrepreneurial background join. If you have a plan on how you will make money then it is worth exploring - at the very least you get to know everyone in Sydney. The biggest problem is not valuations, but cat herding. As soon as you put a dozen grey hairs in a room you will end up with 13 different opinions. This can make progress a lot slower than it should be. On the positive we have a partnership with VC fund (SA SideCar) that matches investments by the angels 1:1 with no extra extra due diligence. They automatically follow on in later rounds which is really a massive positive.

samnwa 9y ago

Daniel, help me get into the good deals. I'll fight for them to stay alive!

lpolovets 9y ago

I'm a software engineer turned VC. I'm very interested in bio startups but am not sure where/how to start, and don't want to be one of those investors that doesn't have a clue and backs all the wrong companies. If you're willing to share your thoughts on what kind of companies investors should be backing, I'd love to chat. My email is leo at susaventures.com.

aaavl2821 9y ago
I have worked in biotech / biopharma for the last eight years as a founder / venture investor / operator coming from a non biology / chem background. It is an amazing space that needs more smart people from other domains Most engineers / tech VCs have been making initial forays into this world through bio-IT / software driven drug dev. This is potentially a really promising space, but I'd suggest starting with biopharma bc 1) it has been generating some of the best returns in venture the last few years and 2) being good at bio-IT requires a good understanding of biopharma and drug dev Biopharma / therapeutics has generated some of the best returns in venture the last few years but is still mostly dominated by specialist VCs and has almost no seed ecosystem (most startups that end up getting venture funding are seeded within the top funds), so there is huge opportunity for seed investors to find the good opportunities outside of the top 5-10 life sci funds. The number of funded biotech startups and seed investors has not increased in a decade despite a doubling in venture funding and the best m&a / IPO environment ever. It is possible for companies to go from seed to IPO in under five years and $5-10B+ m&a in ~5-7 year timeframes (some good timely examples here: https://lifescivc.com/2018/01/two-carts-two-charts-dissecting-returns-t-cell-therapy-ma/ https://lifescivc.com/2018/01/two-carts-two-charts-dissectin...) Finding the best opportunities in biopharma requires identifying the best science. This requires investors to be at least conversational in biology, chemistry and drug development and to utilize advisors / consultants / PhDs to dive deep into specific tech To orient yourself to the world of biopharma investing, id start by reading more of Bruce booths blogs (he is the author of the post I linked above). He is one of the few life sci VCs who blogs and is also a pioneer in seed-series A biotech investing Also I'd recommend following biopharma news and funding / m&a activity. If you see any investors / people you recognize in press releases call them up. If you see a deal that interests you, take a look at the scientific publications from the company and reach out to the authors and other scientists in the space to hear their thoughts