The Top VCs Investing in BioTech (plus the metrics they want to see)

The biotech industry has always been an attractive sector for VCs to invest in, and 2023 is no different. With high potential for returns, a rapidly growing industry, and advances in technology, biotech is a favorable investment for VCs.

One of the main reasons for this is the high potential for returns. Biotech companies that successfully develop and commercialize new therapies and medical devices can generate significant returns for investors. This is particularly true for companies that develop therapies for diseases with high unmet needs, such as cancer, rare genetic disorders, and chronic diseases.

The biotech industry is also expected to grow significantly in the coming years, driven by advancements in genomics, stem cell research, and regenerative medicine. This presents a significant opportunity for investors to participate in the growth of this industry and benefit from its expansion.

Advances in technology such as gene editing, AI, and digital health are also making it easier for biotech companies to develop new therapies and medical devices, which can improve their chances of success. Additionally, the growing interest in personalized medicine is also a favorable trend, as precision medicine is gaining more traction in the industry. This approach, which is based on the genetic makeup of each patient, has the potential to lead to more effective and efficient treatments for a wide range of diseases, including cancer and rare genetic disorders.

Governments around the world are also investing in biotech research and development and are offering various incentives for biotech companies, which can help to reduce the financial risks for investors. The high demand for healthcare, driven by the increasing aging population and the growing burden of chronic diseases, is also driving the demand for new and more effective therapies and medical devices.

Set up Your Biotech Company for Success

Biotech startups have a lot to consider as they work to develop and commercialize new therapies and medical devices. There are several key steps that biotech startups can take to increase their chances of success.

• Identify unmet medical needs
  • Successful biotech startups begin by identifying unmet medical needs in the market, and then developing products or therapies that directly address these needs. By doing so, they are able to differentiate themselves from competitors and demonstrate a clear value proposition to potential customers and investors.
• Build a strong team
  • A strong management team with a diverse set of skills and experiences is crucial for biotech startups. This team should be able to lead the company through the complex and dynamic biotech landscape, and make strategic decisions that will help the company grow.
• Leverage technology
  • Advances in technology such as gene editing, AI, and digital health are making it easier for biotech companies to develop new therapies and medical devices. Leveraging these cutting-edge technologies can give startups a competitive edge and improve their chances of success.
• Create a clear path to commercialization
  • Developing a clear path to commercialization and having a strong business model in place are essential for biotech startups. This helps them to attract investment and partners, and to scale their business.
• Build partnerships
  • Building strong partnerships with key stakeholders in the industry, such as pharmaceutical companies, academic institutions, and government organizations can provide access to resources, expertise, and networks that can help the startup to excel.
• Have strong regulatory compliance
  • Successful biotech startups are aware of the regulations and compliance requirements in the biotech industry and they have the necessary processes and procedures in place to ensure compliance. This helps to avoid delays and ensure a smooth commercialization process.
• Adapt to market changes
  • Successful biotech startups are agile and adaptable, and able to pivot their strategies and business models in response to market changes. This helps them to stay ahead of the curve and capitalize on new opportunities as they arise.

Biotech Metrics to Include in Investor Updates

Some specific metrics that biotech companies may include in their investor update include:

• Clinical trial progress: The number of patients enrolled in trials, the phase of the trial, and any regulatory milestones that have been achieved or are upcoming.
• Pipeline development: This includes compounds or products in development, as well as their potential for revenue or commercialization.
• Intellectual property: Patents filed or granted, as well as the strength and potential value of the company’s intellectual property portfolio.
• R&D expenses: The progress of research projects to investors.
• Scientific publications and presentations: Scientific publications or presentations in which the company or its scientists have participated, as well as the level of visibility and impact of these publications and presentations.
• Manufacturing and production: Updates on the progress of their manufacturing and production processes, including capacity and scalability.
• Product development: Status on the development of a product, including the progress of preclinical studies, clinical studies, and commercialization.
• Market size and potential for growth: The size of the target market for a product and its potential for growth, as well as the competition in the market.
• Regulatory: Progress of regulatory approvals and submissions, including FDA, EMA, and other regulatory authorities.
• Financial metrics: Such as revenue, operating costs, and burn rate.
• The management team and Board of Directors: Any changes or updates to the management team and Board of Directors.
• Partnerships and collaborations: New partnerships or collaborations that have been established or are in progress.

Depending on the stage of the company, some of these metrics may not be applicable or relevant and will vary from company to company or industry.

The Future of Biotechnology

The biotech industry is expected to continue to grow and evolve in the coming years, driven by advancements in technology and research. Biotech startups that are able to stay ahead of the curve and capitalize on trends will be well-positioned for success in the future. A few of these key trends are Gene therapy, Regenerative medicine, Personalized medicine, Digital health, and Artificial Intelligence.

Gene therapy is a promising new approach to treating genetic disorders and diseases by directly targeting the underlying genetic causes. Advances in gene editing technology, such as CRISPR, have made it possible to precisely target and repair disease-causing mutations, leading to the development of new gene therapies for a wide range of conditions.

Regenerative medicine is the practice of using cells, tissues, and organs to repair or replace damaged or diseased parts of the body. This field is rapidly advancing, with new therapies being developed for conditions such as heart disease, diabetes, and spinal cord injuries.

The use of precision medicine is gaining more traction, this approach which is based on the genetic makeup of each patient, has the potential to lead to more effective and efficient treatments for a wide range of diseases, including cancer and rare genetic disorders.

The integration of digital technology into healthcare is increasingly becoming a reality, enabling real-time monitoring and data collection, which will help to improve treatment outcomes. Biotech companies are now investing in digital health solutions, including wearable devices, mobile apps, and telemedicine, to improve patient care.

AI is becoming increasingly important in the biotech industry, with companies using machine learning and deep learning to analyze large amounts of data, including genetic data, to identify new drug targets and develop new therapies.

VCs Main Focus Areas in Biotech

Depending on the VC firm’s investment strategy and the portfolio the focus may vary but some general areas of interest include:

Biotechnology: Startups working on developing new drugs, therapies, and diagnostics, as well as those working on advancing biotechnology platforms such as gene therapy, CRISPR, and synthetic biology.

• Medical Devices: Such as implantable devices, diagnostic tools, and digital health technologies.
• Digital Health: Telemedicine, virtual care, and remote monitoring technologies.
• Biotech IT: This includes startups working on developing new software and IT solutions to support the biotech industry, such as bioinformatics, computational biology, and data analytics.
• Biotech Services: Such as contract research and development, clinical trial management, and regulatory consulting.
• Biotech Agriculture: Startups working on developing new tools and technologies to improve crop yields, reduce waste, and improve food safety.
• Biotech Energy: New biofuels, renewable energy, and sustainable materials

VCs Investing in Biotech Companies

8VC

• Location: San Francisco, California, United States
• About: 8VC aims to transform the technology infrastructure behind many industries.
• Investment Stages: Seed, Series A, Series B, Growth
• Recent Investments:
  • Oula
  • Anduril
  • Loop

Check out 8VC’s profile on our Connect Investor Database

Arch Venture Partners

• Location: Chicago, Illinois, United States
• About: ARCH Venture Partners invests primarily in companies co-founded with leading scientists and entrepreneurs, concentrating on bringing to market innovations in information technology, life sciences, and physical sciences. ARCH currently manages five funds totaling over $700 million and has invested in the earliest venture capital rounds for more than 90 companies. ARCH investors include major corporations, financial institutions, and private investors.
• Investment Stages: Seed, Series A, Series B, Series C, Growth
• Recent Investments:
  • Synchron
  • FogPharma
  • Treeline Biosciences

Check out Arch Venture Partners’ profile on our Connect Investor Database

5AM Ventures

• Location: Menlo Park, California, United States
• About: 5AM Ventures is a California-based venture capital firm that aims to finance seed- and early-stage life sciences companies.
• Investment Stages: Series A, Series B, Growth
• Recent Investments:
  • Escient Pharmaceuticals
  • CAMP4 Therapeutics
  • Dianthus Therapeutics

Check out 5AM Ventures’ profile on our Connect Investor Database

Atlas Venture

• Location: Cambridge, Massachusetts, United States
• About: Atlas Venture is the leading international early-stage venture capital firm, investing in communications, information technology and life sciences companies. Atlas Venture investments are evenly divided between the United States and Europe. Founded in 1980, Atlas Venture has organized six international funds, and currently manages more than $2.1 billion in committed capital.
• Investment Stages: Seed, Series A, Series B, Growth
• Recent Investments:
  • Nimbus Therapeutics
  • Be Biopharma
  • Triana Biomedicines

Check out Atlas Ventures’ profile on our Connect Investor Database

Forum Ventures

• Location: New York City, San Francisco, and Toronto, United States
• Thesis: B2B SaaS; Future of Work, E-commerce enablement, Supply Chain & Logistics, Marketplace, Fintech, Healthcare
• Investment Stages: Pre-Seed, Seed
• Recent Investments:
  • Sandbox Banking
  • Tusk Logistics
  • Vergo

Check out Forum Ventures profile on our Connect Investor Database

OrbiMed

• Location: New York City, United States
• About: We have been investing globally for over 20 years across the healthcare industry: from early-stage private companies to large multinational corporations. Our team of over 100 distinguished scientific, medical, investment, and other professionals manages over $17 billion across public and private company investments worldwide.
• Investment Stages: Series A, Series B, Series C
• Recent Investments:
  • Pathalys Pharma
  • Amolyt Pharma
  • MBX Biosciences

Check out OrbiMed’s profile on our Connect Investor Database

Polaris Partners

• Location: Massachusetts, United States
• About: Polaris Partners ​has a 20+ year history of partnering with ​entrepreneurs and innovators improving the way we live and work.
• Investment Stages: Series A, Series B, Series C
• Recent Investments:
  • Jnana Therapeutics
  • FOLX Health
  • CAMP4 Therapeutics

Check out Polaris Partners’ profile on our Connect Investor Database

Third Rock Ventures

• Location: Boston, Massachusetts, United States
• About: Telescope Partners is an active growth equity firm partnering with best in class entrepreneurs across the technology landscape. We invest ourselves and our capital in companies building long-term, sustainable businesses.
• Investment Stages: Series A, Series B
• Recent Investments:
  • Corvia Medical
  • Terremoto Biosciences
  • MOMA Therapeutics

Check out Third Rock Ventures’ profile on our Connect Investor Database

Versant Ventures

• Location: San Francisco, California, United States
• About: Versant Ventures caters to the healthcare sector with early and later stage venture, private equity, and debt financing investments.
• Investment Stages: Pre-Seed, Seed, Series A, Series B, Growth
• Recent Investments:
  • iECure
  • Jnana Therapeutics
  • Nested Therapeutics

Check out Versant Ventures profile on our Connect Investor Database

Sofinnova Partners

• Location: London, United Kingdom
• About: Sofinnova Partners is a venture capital firm that invests in the life sciences sector, from seed to later-stage.
• Thesis: We invest in people and science to create opportunity. We commit to long-term partnerships with entrepreneurs who are as passionate as we are about pushing the frontiers of innovation to contribute to a better future.
• Investment Stages: Seed, Series A, Series B, Series C, Growth
• Recent Investments:
  • Amolyt Pharma
  • Micropep
  • Prometheus Materials

Check out Sofinnova Partners’ profile on our Connect Investor Database

F-Prime Capital

• Location: Cambridge, Massachusetts, United States
• About: F-Prime grew from one of America’s great entrepreneurial success stories. Fidelity Investments was founded in 1946 and grew from a single mutual fund into one of the largest asset management firms in the world, with over $2 trillion under management. For the last fifty years, our independent venture capital group has had the privilege of backing other great entrepreneurs as they built ground-breaking companies, including Atari, Ironwood Pharmaceuticals and MCI.
• Investment Stages: Seed, Series A, Series B
• Recent Investments:
  • Neumora Therapeutics
  • Elicidata
  • Ashby

Check out F-Prime Capital’s profile on our Connect Investor Database

Start Your Next Round with Visible

We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey.

Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VCs and accelerators who are looking to invest in companies like you. Check out all our investors here and filter as needed.

After learning more about them with the profile information and resources given you can reach out to them with a tailored email. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors and How to Cold Email Investors: A Video by Michael Seibel of YC.

After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here.