Scaling Your Startup: What’s Needed to Get from Idea to Exit
- Most life science startup failures happen before clinical PoC — typically due to CEO inexperience, not lack of investor interest.
- Expect to spend 9–18 months and $68K–$155K to raise a round.
- Investors meet with 400–800 companies before investing in one — most meetings happen at partnering events.
- Reduce cost and time by choosing events wisely: target life science hubs, aim for a 1:1 company-to-investor ratio, and cap registration spend at $3K.
- Support the fundraise process with a CRM, an investor database, and classes or resources offered by tech hubs like CLS.
Submitted by Claire Jeong, VP, Investor Relations, Life Science Nation.
Originally published in Life Sciences Insights Magazine, September 2024
Life science companies have a high failure rate. Most occur before clinical PoC. This is typically due to inexperience of the scientist-turned-CEO rather than lack of investor interest. So what’s needed to raise capital?
Money
It takes hundreds of investor meetings to get a raise. Investors meet with 400 – 800 companies before investing in one. Most meetings happen at venture investment partnering events. Warm and cold introductions come in 2nd and 3rd place. In-person meetings are preferable. Discounting legal and cost of living, the price of a fundraise is:
6 – 8 partnering meetings annually, ideally with a colleague: $10K – $11K per event = $45K to $132K
3 – 6 therapeutic conferences: $10K – $20K
10 trips in the US and one in Europe or Asia to meet with investors: $13K
Total: $68K – $155K
Friends & family, savings, spousal income, credit cards, and home equity loans are the tools used by successful CEOs to fundraise.
Strategy
To reduce time/money while maximizing the round size:
Read a book on life science fundraising/pitching. Here’s a free e-book.
Take a class. Offered by tech hubs like CLS, these usually cost $2K or more.
Subscribe to an investor database.
Manage your outreach with a CRM.
Purchase a company presentation/pitch at a partnering event.
Pick your partnering conferences wisely.
Target events located in life science hubs and combine it with local investor meetings outside the event.
Choose events with a 1:1 ratio of companies to investors.
Don’t spend more than $3K for a normal partnering registration.
Successfully raising capital is hard, however the process is well understood. Are you willing to learn and execute the process to increase your chance of success?
*Data based on LSN’s investor interviews
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