How important are high net worths to biotechs?

It is proving harder and harder for early stage biotech’s in the UK to get funding from VCs. Many are hoping high net worth individuals can fill the void. I spoke to Davidson Ateh, CEO of BioMoti, an early stage biotech focused on the oncology space, about the issue.

Understanding the VC environment for Biotechs

Here’s an excerpt from the interview I conducted with Davidson:

B&M: What is your view on VCs?

Davidson: First thoughts are ‘where?!’. There are very few around! That capital is extremely competitive and as newbies we find it difficult to get committed attention… There are simply not enough VCs - particularly for early stage in the UK…

Davidson is not the first to moan about the dearth of VCs investing in early stage biotech, and it’s clear the VC environment is not conducive to helping early stage biotech get up and running.

‘There are simply not enough VCs – particularly for early stage in the UK’ 

So, where do you go if VCs can’t help?

I pressed Davidson on the dearth of VC’s and asked him what he thought about angels. Below was his response:

Davidson: A lot of the angels have not had a historically good run in biotech - even when the biotech succeeded - so they are apprehensive. A few still do it, but not as many as we’d like to see and often not in therapeutic development.

Nevertheless, angels are certainly the class of investor where we have been most active both in the UK and the US and we are seeing a lot of interest. It would be great if as a sector we could attract a lot more of the ultra high net worth dollars and I think we are starting to see some examples of this.

I think a hugely important challenge for early stage UK biotechs is to identify how to attract high net worth dollars into the country. More needs to be done to bring the high net worths into the sector. As Davidson says, we are starting to see some examples of this. Let’s hope it grows.

If you’d like to know what else Davidson had to say, including his view on funding strategies, early stage challenges and where the industry is heading, Download the full transcript here.

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