Venture Capitalists as gatekeepers for Biotechnological Innovation
Requires Subscription or Fee PDF


Venture Capital


Venture capitalists (VCs) aim at trade sales as a preferred exit-strategy for biotechnology companies they invest in. Therefore, VCs pay close attention to the wishes of larger (bio)pharmaceutical acquirers. In this paper we explore VCs’ behavior and strategies by analyzing the technology fields and therapeutic areas in which they are invested most and which yield the highest returns by means of trade sales. The data show that VCs are by far most invested in oncology and this is also an area in which relatively high returns are realized. Regarding other areas, VCs could balance their average investment valuations more in correspondence with what acquirers are willing to pay. In addition, VCs have formidable insight in the types of technologies that do well and they seem to employ a strategy focused on both short-term and long-term success. They are investing most in small molecule drugs and protein/peptide therapeutics, which both yield high returns, followed by DNA/RNA technologies which underlie the possibilities of personalized medicine. We conclude that Venture Capitalists act as technological gatekeepers because they are predicting long-term cure and care macro-trends.
Requires Subscription or Fee PDF


Bradford, T. C. (2003) Evolving symbiosis—venture capital and biotechnology. Nature Biotechnology 21(9): 983 – 984

EY (2013) Beyond Borders; Matters of evidence. Biotechnology Industry.$FILE/Beyond_borders.pdf

Stewart, J. J., Allison, P. N., & Johnson, R. S. (2001) Putting a price on biotechnology. Nature biotechnology 19(9): 813-818

Lee, D. P. & Dibner, M. D. (2005) The rise of venture capital and biotechnology in the US and Europe. Nature biotechnology 23(6): 672-676

Malik, N. N. (2009) Biotech acquisitions by big pharma: why and what is next. Drug discovery today 14(17): 818-821

Fernald, K., Pennings, E., & Claassen, E. (2014) Biotechnology Commercialization Strategies: Risk and Return in Interfirm Cooperation. Journal of Product Innovation Management, in press.

Giniatullina, A., Boorsma, M., Mulder, G. J. & van Deventer, S. (2013) Building for big pharma. Nature biotechnology 31(4): 284-287

Florida, R. L. & Kenney, M. (1988) Venture capital-financed innovation and technological change in the USA. Research Policy 17(3): 119-137

OECD (2005) A Framework for Biotechnology Statistics.

Van der Valk, T., Moors, E. H. M. & Meeus, M. T. H. (2009) Conceptualizing patterns in the dynamics of emerging technologies: The case of biotechnology developments in the Netherlands Technovation 29(4): 247–264

Kalos, M., & June, C. H. (2013) Adoptive T cell transfer for cancer immunotherapy in the era of synthetic biology. Immunity 39(1): 49-60

Barouch, D. H., & Picker, L. J. (2014) Novel vaccine vectors for HIV-1. Nature Reviews Microbiology 12: 765–771

Mairhofer, J., & Lara, A. R. (2014) Advances in Host and Vector Development for the Production of Plasmid DNA Vaccines. Cancer Vaccines. Springer New York, pp. 505-514

Fernald, K. D. S., Weenen, T. C., Sibley, K. J. & Claassen, E. (2013) Limits of biotechnological innovation. Technology and Investment 4, 168-178

Davis, J. C., Furstenthal, L., Desai, A. A., Norris, T., Sutaria, S., Fleming, E., & Ma, P. (2009) The microeconomics of personalized medicine: today's challenge and tomorrow's promise. Nature reviews Drug discovery 8(4): 279-286

Sander, C. (2000) Genomic medicine and the future of health care. Science 287(5460): 1977-1978

Schilsky, R. L. (2010) Personalized medicine in oncology: the future is now. Nature reviews Drug discovery 9(5): 363-366

Unless specified by prior arrangement, the author agrees to the following terms and assurances:

  1. For myself and on behalf of the other authors listed on this work, I assign to thinkBiotech LLC the copyright* in the contribution for the full term throughout the world.
  2. I/we further give to the following assurances
    1. I am the sole author of the contribution, or, if not, I have the written authority of the other authors to transfer the copyright* to thinkBiotech LLC and give these warranties;
    2. I and (where appropriate) the other authors are entitled to transfer the copyright to thinkBiotech LLC and no one else would be entitled to prevent us from publishing the contribution;
    3. To the best of my/our knowledge, all the facts in the contribution are true and accurate;
    4. The content of the contribution is entirely original to me (and where appropriate to the other authors) or, if not, the written permission of the owner of the copyright in any material copied from elsewhere has been obtained for all media (all such permissions to be attached to the contribution as supplementary files);
    5. Nothing in the contribution is obscene or libellous;
    6. Nothing in the contribution infringes any duty of confidentiality which I/or the other authors may owe to anyone else.
    7. I and/or the other authors have obtained the appropriate clearances from my/our employer(s) or other concerned institution(s).
* Works by US government employees prepared as part of official duties are in the public domain and the authors are therefore exempt from copyright assignment.