Investor experience in biotechnology


  • William Bains Rufus Scientific Ltd.
  • Daniel Rabbie School of Biological Sciences, University of Warwick, Gibbet Hill Road, Coventry CV4 7AL
  • Weiyi Yao University of Leeds, Leeds, LS2 9JT,
  • David Ricardo Munoz Guzman Novellus Biopharma AG, Bahnhofstrasse 9, 6340 Baar,



venture capital, finance, experience, seed, start-up, policy


Biotechnology is viewed as an industry that combines scientific innovation, entrepreneurial management and experienced investment to drive innovation, primarily in biomedicine. This paper examines the third of these assumed preconditions. We find that the majority of investors in biotechnology companies over the last decade by number or by value have not been experienced, and that the majority of investors in biotechnology companies have invested in less than three such companies in the decade, suggesting that they have very limited experience of biotechnology. 13% of investment syndicates contain no investors who have made more than three biotechnology investments. Investor inexperience is disproportionately high in Seed and Series A rounds, but has little correlation with amount invested. Investor inexperience is found in all categories of investors and all territories, although US investors tend to have greater experience than those outside North America. The banking crisis of 2008-11 has not materially changed this. We suggest that the conventional image of biotechnology investment as the careful selection and nurturing of young companies by experienced investors is incomplete. This has implications for candidate investor selection by entrepreneurs, and for government support of biotechnology by supporting investors or investment mechanisms. 


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