Understand Biotech Investment and Financing

About This Course & Learning Outcomes

1.4 — The Value of Information

1.5 — Financing a Company That May Have No Revenue

1.6 — Development Cost Is Not the Same as Financing Need

1.7 — Financing as a Matching Problem

1.8 — Running Case: Vareqion Biosciences

1.9 — Learning Check

1.10 — Summary

2.1 — There Is No Single Biotech Funding Path

2.2 — A Framework for Comparing Sources of Capital

2.3 — Founder and Internal Capital

2.4 — Grants and Other Non-Dilutive Funding

2.5 — Angel Investment

2.6 — Venture Capital

2.7 — Corporate and Strategic Capital

2.8 — Mission-Driven Capital

2.9 — Debt Financing

2.10 — Public Markets

2.11 — Combining Sources of Capital

2.12 — Ownership, Dilution and the Cap Table

2.13 — Building a Financing Strategy Around the Next Milestone

2.14 — Application Connection: Capital and Runway

2.15 — Learning Activity: Financing Vareqion

2.16 — Learning Check

2.17 — Summary

3.1 — How Venture Capital Works

3.2 — The Economics of a Venture Fund

3.3 — Why Fund Size Matters

3.4 — Portfolio Construction and Return Requirements

3.5 — Investment Mandates and Investor Fit

3.6 — Investment Stage and Ticket Size

3.7 — Follow-On Capacity

3.8 — Fund Lifecycle and Investment Horizon

3.9 — How Investors Evaluate Biotech Opportunities

3.10 — The Investment Case

3.11 — Pitching to Investors

3.12 — Investor Due Diligence

3.13 — Due-Diligence Readiness

3.14 — Founder Due Diligence on Investors

3.15 — Evaluating Investor Behaviour and Fit

3.16 — Application Connection: Investor Research

3.17 — Learning Activity: Research an Investor

3.18 — Learning Check

3.19 — Summary

4.1 — Start with What the Capital Must Accomplish

4.2 — How Much Should the Company Raise?

4.3 — Financing Resilience

4.4 — When to Start Fundraising

4.5 — Building the Investor Map

4.6 — Sequencing Investor Approaches

4.7 — The Initial Investor Pitch

4.8 — From Investor Interest to Financing

4.9 — Due Diligence and the Financing Process

4.10 — Understanding the Term Sheet

4.11 — Pre-Money and Post-Money Valuation

4.12 — Ownership and Dilution

4.13 — Share Classes and Investor Rights

4.14 — Liquidation Preferences

4.15 — Anti-Dilution Protection

4.16 — Employee Option Pools

4.17 — Pro-Rata and Future Financing Rights

4.18 — Governance, Board Seats and Consent Rights

4.19 — Exclusivity and Strategic Restrictions

4.20 — Convertible Financing

4.21 — Model the Whole Offer

4.22 — Comparing Two Offers

4.23 — Legal Advice Is Essential

4.24 — Application Connection: Why the Workflow Does Not Negotiate Term Sheets

4.25 — Learning Activity: Compare Two Term Sheets

4.26 — Learning Check

4.27 — Summary

5.1 — Value, Valuation and Price

5.2 — Why Early Biotech Is Difficult to Value

5.3 — Evidence, Uncertainty and Value

5.4 — Asset-Based Valuation

5.5 — Discounted Cash Flow

5.6 — Discount Rates and the Cost of Capital

5.7 — Enterprise Value and Equity Value

5.8 — Terminal Value

5.9 — Why Ordinary DCF Can Be Problematic in Biotech

5.10 — Risk-Adjusted Net Present Value

5.11 — Development Probabilities

5.12 — Probability-Adjusted Development Costs

5.13 — Comparable Companies

5.14 — Comparable Transactions

5.15 — Selecting Meaningful Comparables

5.16 — The Venture Capital Method

5.17 — Investor Return Requirements

5.18 — Future Financing and Dilution

5.19 — Why a Higher Valuation Is Not Always Better

5.20 — Triangulating Valuation Methods

5.21 — Sensitivity and Scenario Analysis

5.22 — Making Valuation Assumptions Explicit

5.23 — Application Connection: Valuation and the Workflow

5.24 — Learning Activity: Compare Valuation Methods

5.25 — Learning Check

5.26 — Summary

6.1 — Cash Is a Development Resource

6.2 — Burn Rate

6.3 — Gross Burn and Net Burn

6.4 — Revenue Does Not Automatically Extend Runway by Its Full Amount

6.5 — Cash Runway

6.6 — Why Average Burn Can Mislead

6.7 — Month-by-Month Cash Forecasting

6.8 — Programme Cost Versus Financing Requirement

6.9 — Post-Milestone Runway

6.10 — Absolute Runway and Fundraising Runway

6.11 — Fundraising Timing

6.12 — Waiting for Evidence: The Financing Trade-Off

6.13 — Contingency

6.14 — Contingency Is Not Permission to Continue After Failure

6.15 — The Economic Value of Failing Early

6.16 — Capital Efficiency

6.17 — Revenue-Generating Side Activities and Opportunity Cost

6.18 — Lumpy Expenditure

6.19 — Financing Rounds and Financing Tranches

6.20 — Scenario Analysis

6.21 — Financing Resilience

6.22 — Building the Integrated Capital Requirement

6.23 — Application Connection: Deterministic Runway and Capital Calculations

6.24 — Learning Activity: Stress-Test Vareqion's Runway

6.25 — Learning Check

6.26 — Summary

7.1 — A Company Does Not Need to Own Every Capability

7.2 — Why Partner?

7.3 — Complementarity

7.4 — The Partnership-Fit Framework

7.5 — Licensing

7.6 — Exclusive and Non-Exclusive Licensing

7.7 — Option-to-License Structures

7.8 — Co-Development

7.9 — Research Collaborations

7.10 — Transaction Economics

7.11 — Upfront Payments

7.12 — Milestone Payments

7.13 — Royalties

7.14 — Corporate Venture Capital

7.15 — Why Corporations Invest

7.16 — Strategic Interest Can Change

7.17 — Promised Resources Versus Accessible Resources

7.18 — Information Exposure

7.19 — Strategic Optionality

7.20 — Mission-Driven and Catalytic Capital

7.21 — Family Offices and Patient Capital

7.22 — Private Equity and Why Classic LBOs Rarely Fit Early Biotech

7.23 — Primary and Secondary Transactions

7.24 — Exit and Liquidity

7.25 — Acquisition

7.26 — Initial Public Offering

7.27 — Exit Optionality

7.28 — Headline Exit Value Versus Shareholder Proceeds

7.29 — Investor Exit and Founder Outcome Are Different

7.30 — Build, Partner or Exit?

7.31 — The Partnership–Financing–Exit Continuum

7.32 — The Capital-Provider Fit Framework

7.33 — Application Connection: Capital Matching and Investor Research

7.34 — Learning Activity: Choose a Strategic Path

7.35 — Learning Check

7.36 — Summary

8.1 — The Complete Evidence–Uncertainty–Capital Cycle

8.2 — Start with the Evidence

8.3 — Identify the Critical Uncertainty

8.4 — Define the Evidence Required

8.5 — Select the Value-Inflection Point

8.6 — Translate the Milestone into a Development Programme

8.7 — Determine Time and Capital Requirements

8.8 — Stress-Test the Financing Requirement

8.9 — Match the Company to Appropriate Sources of Capital

8.10 — Research and Evaluate Specific Investors

8.11 — Evaluate Valuation, Ownership and Transaction Terms

8.12 — Consider Strategic Alternatives

8.13 — Preserve Future Optionality

8.14 — Reassess When New Evidence Arrives

8.15 — Building the Integrated Financing Decision

8.16 — Responsible Use of AI in Biotech Financing

8.17 — Evidence Before Inference

8.18 — Deterministic Where Possible

8.19 — Human Review at Consequential Judgement Points

8.20 — Agentic AI Where External Investigation Is Required

8.21 — The Practical Workflow Architecture

8.22 — The Role of the Practical n8n Project

8.23 — Final Integrated Case Exercise

8.24 — Final Learning Check

8.25 — Course Summary

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