Lecture 7_Early Phase Funding Flashcards
(19 cards)
What are the three essential ingredients of a biotech innovation ecosystem?
Ideas – Innovative science with commercial potential
Capital – High-risk, long-term investors
Talent – Skilled scientific and commercial managers
What are the stages of biotech funding?
Pre-seed
Seed
Series A, B, C…
Exit (Acquisition or IPO)
What happens during the pre-seed stage?
Ideation, founding team, early market testing, developing pitch and MVP; usually <AUD$500k in funding
What happens during seed stage?
Product-market fit, validated data, formal company launch; ~AUD$500k–$2M in equity funding
List different types of early-stage biotech funding options (7)
Government grants
Angel investors
Philanthropy
Venture Capital (VC)
Corporate VC (Big Pharma)
Incubators/Accelerators
Crowd-funding
What are grants and their pros/cons?
Pros: Non-dilutive, prestigious, no equity loss
Cons: Slow, competitive, specific eligibility
What is patient capital?
Investment from angels or philanthropies focused on impact, with high-risk tolerance and longer timelines
What do VCs look for in early-stage biotech deals?
Strong IP and data
Competitive differentiation
Clear exit strategy (IPO/acquisition)
Team capability and platform potential .
What are key terms in a VC deal?
Pre-money valuation
Share class
Founder shares
ESOP (employee ownership)
Board structure .
What is the Valley of Death in biotech?
The gap between academic discovery and commercial interest where early-stage projects often fail due to lack of funding or proof-of-concept data
Why does the Valley of Death exist?
Public funding doesn’t support translational work
Drug discovery delays publication
High costs and uncertain ROI deter VCs and Pharma
What is Tin Alley Ventures (TAV)?
A $125M fund co-founded by UniMelb and Tanarra Capital to invest AUD$500k–$5M in university-affiliated life sciences and tech startups
What role does TAV play in the funding lifecycle?
Provides capital from seed to Series B+, helps address the Valley of Death by co-designing experiments and aligning investment stages
What are the main challenges in university commercialisation?
Long negotiation times
IP ownership disputes
Academic career pressures
Lack of internal business capability
How does UniMelb address these challenges?
Through embedded entrepreneurs-in-residence (EiRs), proof-of-concept funds, Genesis pre-seed fund, and alignment with TAV
What are the four main stages of an early biotech investment deal?
Opportunity diligence
Company operationalisation
Exit strategy
Follow-on investments
What is Series A funding in biotech?
The first significant round of VC investment, used to validate the business model, expand the team, and generate key data. Usually follows seed funding once proof of concept is achieved
What is Series B funding in biotech?
funding round to scale operations—often used for expanding trials, manufacturing, or regulatory submissions. Investors expect validated early results and a clearer path to commercialisation
What is Series C funding in biotech?
Later-stage funding to prepare for exit strategies like acquisition or IPO. Funds may support large Phase III trials, marketing infrastructure, or global expansion
