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Notes Before Diving In
This Playbook is generally applicable across the biotech sector, but, wherever possible, content is presented with researchers in the male contraceptive development community in mind. It is meant to inspire and equip first-time scientist founders with the language, tools, and confidence to begin their journey as company builders in the biotechnology industry.
There are many ways to advance contraceptive development, and MCI created this resource as an introduction to Venture/Impact Capital-backed startups, representing one avenue that is of interest to the field. Bear in mind that market trends and macroeconomic forces change and shape the VC landscape, sometimes abruptly, so we recommend using this as a starting point for further research when thinking about starting a company.
Those familiar with MCI will know that we are fundamentally driven to enable and promote the global development of novel male contraceptives, and global access to these future products. This playbook, however, is primarily geared towards understanding the system and motivations in the VC-backed biotech ecosystem in the U.S. and E.U., since many of our grantees are exploring this as an option to advance their projects.
Much of the information found in the playbook was curated from other resources and authors, cited throughout.
Notes Before Diving In
This Playbook is generally applicable across the biotech sector, but, wherever possible, content is presented with researchers in the male contraceptive development community in mind. It is meant to inspire and equip first-time scientist founders with the language, tools, and confidence to begin their journey as company builders in the biotechnology industry.
There are many ways to advance contraceptive development, and MCI created this resource as an introduction to Venture/Impact Capital-backed startups, representing one avenue that is of interest to the field. Bear in mind that market trends and macroeconomic forces change and shape the VC landscape, sometimes abruptly, so we recommend using this as a starting point for further research when thinking about starting a company.
Those familiar with MCI will know that we are fundamentally driven to enable and promote the global development of novel male contraceptives, and global access to these future products. This playbook, however, is primarily geared towards understanding the system and motivations in the VC-backed biotech ecosystem in the U.S. and E.U., since many of our grantees are exploring this as an option to advance their projects.
Much of the information found in the playbook was curated from other resources and authors, cited throughout.
Venture capital is a form of equity financing where investors provide funds to private companies in exchange for ownership stakes, aiming to generate significant returns through a company’s growth or liquidation event (exit).
Relative to startups in other industries, biotechnology companies have a higher capital burn rate, longer development process, inherently higher risks, and in some cases, additional socio-political issues to navigate. Despite these challenges, Venture Capital (VC) is a fundamental cornerstone of the biotech industry, bridging the gap between the scientific discoveries made in academic laboratories funded by grants and fellowships, and late stage product development, commercialization, and marketing efforts that large pharmaceutical companies are willing to invest in using revenue from successful products already on the market. In addition to providing capital, biotech-intelligent VC funds also have expertise that can help navigate R&D, regulatory landscapes, and business development.
For a primer on where VCs fit in the drug development ecosystem, check out these two short videos from No Patient Left Behind that explain the basics of capital flow and risk in the biotech/pharmaceutical industry.
Relative to startups in other industries, biotechnology companies have a higher capital burn rate, longer development process, inherently higher risks, and in some cases, additional socio-political issues to navigate. Despite these challenges, Venture Capital (VC) is a fundamental cornerstone of the biotech industry, bridging the gap between the scientific discoveries made in academic laboratories funded by grants and fellowships, and late stage product development, commercialization, and marketing efforts that large pharmaceutical companies are willing to invest in using revenue from successful products already on the market. In addition to providing capital, biotech-intelligent VC funds also have expertise that can help navigate R&D, regulatory landscapes, and business development.
For a primer on where VCs fit in the drug development ecosystem, check out these two short videos from No Patient Left Behind that explain the basics of capital flow and risk in the biotech/pharmaceutical industry.
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Inventing new medicines is a long climb
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The Investor's Paradox
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VCs start assessing potential investments by evaluating whether a company fits within their current investment strategy - considering factors like indication focus, development stage, or public perception (e.g., reluctance to fund genetically modified plant ventures despite scientific merit). Some VCs are agnostic, and some have a narrow focus. After the initial “is this in scope or out of scope test?”, VCs will evaluate the company’s risk across multiple areas, including: the scientific/technical risk, regulatory path, the market potential, the capability of the team, and the financing strategy.
Given all these factors, it’s important to be prepared when engaging VCs. There are several courses and infinite webinar series to learn from. Link to course from pillar. There are a variety of competitive structural programs that exist to help startups gain traction and conduct the first critical de-risking experiments. These include accelerators, incubators, and/or venture studios depending on who you know. Let’s compare those now.
Given all these factors, it’s important to be prepared when engaging VCs. There are several courses and infinite webinar series to learn from. Link to course from pillar. There are a variety of competitive structural programs that exist to help startups gain traction and conduct the first critical de-risking experiments. These include accelerators, incubators, and/or venture studios depending on who you know. Let’s compare those now.
Programs/Vehicles for Biotech Startups
- Accelerators
- Incubators
- Studios
- Venture Builders
- Focused-Research Organizations (FRO)
- Investors
Venture Builders/Studios |
Incubators |
Accelerators |
FROs |
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Examples |
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Goal |
Create biotech startups from scratch, generating their own ideas, building teams, and developing products, often acting as co-founders |
Position company for Angel/pre-Seed/Seed investors Provide startups with shared laboratory facilities to de-risk ideas |
Position company for Seed/Series A based on a validated concept |
Pre-defined, outcome-oriented goals, addressing bottlenecks in a field that are underserved by existing institutions |
Company Sourcing |
Internal ideation |
Startups apply |
Startups apply |
Internal/external ideation |
Support Provided |
+++ |
+ (typically provides lab space) |
+ (mentorship, networking) |
++++ |
Length of Support |
0.5-3 years |
1-2 years |
~3 months |
Defined number of years tied to milestones (e.g., 5) |
Management |
Deeply hands-on, part of management/operations |
Infrastructure support, but little oversight |
High-level guidance |
Variable |
Equity Stake |
30-50% |
Little to none |
5-10% |
Companies may be spun out of FROs |
Purely Equity Investors in Biotech
- Accelerators
- Incubators
- Studios
- Venture Builders
- Focused-Research Organizations (FRO)
- Investors
Angels |
Venture Capital |
Accelerators |
FROs |
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Source of Investment |
High Net Worth (HNW) Individuals
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Limited Partners
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Limited Partners
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Limited Partners
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Investment Stage |
Pre-Seed, Seed (Often invest prior to a formally priced round) |
All stages of private companies |
Seed-Series B (Biotechs are not usually aligned with Impact Fund definitions of rounds) |
Later stage, mature companies |
Investment Amount |
$10k -$1M |
$100k - $100M |
$100k - $10M |
$50M+ |
Ownership Stake |
Minority stake |
5-50% equity |
5-50% equity |
Majority stake or full ownership |
Risk Level |
Highest |
High |
Moderate |
Moderate-Low |
Return Timeline |
5-10+ |
5-10 |
5-7 |
3-7 |
Level of Involvement |
Typically low involvement |
Strategic advisors, potential seat on the Board |
Strategic advisors, potential seat on the Board |
Highly involved in strategy and operations |
Table of Contents
Please click on the buttons below to access the various aspects of the Startup Founder Playbook:
