Startups are facing uphill battles in getting their message across, inviting investors, marketing products, and securing financial boost. All the more if it is a biotech company, which makes things doubly harder. The industry is booming, but fewer biotech startups are becoming successful. What could be the reason behind it, and more importantly, how can they achieve greater success?
According to AlleyWatch, the cost of releasing a new drug in the market is almost $350 million, with the trend increasing as time goes by. Aside from the huge financial requirement, biotech startups must also undergo the time-consuming process of securing an approval from the U.S. Food and Drug Administration (FDA). If a single step is missed, it could hunt the founders and be a reason why it will fail to get approval from FDA.
Another reason is that releasing a drug takes countless studies, experiments and research. With drugs, it can work sometimes, while in other circumstances, they don’t. But biotech startups need not lose faith as there is one way to increase their chances of success: crowdfunding.
Venture capital (VC) funding has always been the go-to solution for biotechs in the U.K. However, it is high time to explore other viable alternatives such as crowdfunding. From 2014 to 2015, crowdfunding grew by as much as 295 percent in the U.K., per Lexology, and experts agree it could soon replace venture capital as a top source of financial needs. One of the reasons why crowdfunding is enjoying relative success in the biotech industry is the possibility of quickly raising money and providing access to it.
Eyebrain, a biotech startup, serves as proof that crowdfunding is better than venture capitalists. It secured its first tranche of money in under 90 days compared to the nine months in VC funding. Since 2014, online crowdfunding platforms supporting life sciences have been increasing. In the U.S., there are Poliwogg and Medstartr, while in the U.K., there is Syndicate Room.
A startup can secure an average capital of £400,000 in Europe, but there are also those that have reached the million-pound mark such as Cell Therapy, Eyebrain and Riboxx. Capital Cell was able to raise £3.77 million after launching 14 successful campaigns. Now, investors are starting to reap early returns on investment, making early funding crucial. If everything goes well, it’s a win-win situation for investors and entrepreneurs.
The success of a startup is not only dependent on financial assistance. Communication is also vital in such a way that a crowdfunding campaign tells the story of the product or service that is being offered and why there is a need for it in the current market. Choosing the correct platform is crucial as well. Entrepreneurs and founders must exercise due diligence when choosing where to launch their crowdfunding campaign.
To avoid failure, entrepreneurs in the biotech startups are encouraged to take crash courses on regulatory science, AlleyWatch stated in the same article. In this way, they can get the necessary information on legal and ethical issues that they may face along the way.
Sono Motors introduces community advisory board
Sono Motors unveiled the latest prototype of its electric minivan with solar cells in the body. In parallel with the...
Ysios Capital invests 30 million in 2020 and plans to enter four companies in 2021
In a year marked by the COVID-19 pandemic, the venture capital manager Ysios Capital carried out six follow-on operations and...
Oxxo enters the fintech ecosystem with its digital wallet Spin
On March 2nd, Oxxo presented Spin, a digital wallet through which it will be possible to manage, send and receive...
AEDESEO asks for €57,000 in crowdfunding to research a new treatment
AEDESO wants to start a clinical study and launched a crowdfunding campaign to raise the necessary money for it. Patients...
Mainz-based biotech company ActiTrexx receives €3.5 million in financing
The biotech company ActiTrexx has recently closed a Series A financing round, during which it raised $4.2 million (€3.5 million)....
Biotech7 days ago
VB Devices closes a €1.1 million round to consolidate its market entry
Business7 days ago
The multifaceted benefits of Augmented and Virtual Reality in education
Cannabis6 days ago
Legalization trend drives cannabis ETFs to significantly grow
Featured7 days ago
ARisk, the startup of predictive risk algorithms, closes €350,000 round