Ask HN: Interest in biotech investing course?
For the last year I've been running a program connecting grad students and postdocs from bay area universities with biotech VCs to learn about the industry, find jobs and start companies. I also advise seed stage biotech startups.
What I've found through all this is that there are way more talented young biotech founders than there are investors who will fund them.
The top biotech VCs don't fund young founders -- much like tech VCs wouldn't fund young founder-CEOs until YC, a16z and Zuckerberg showed that young hackers could build huge companies.
Generalist tech VCs are starting to get into bio, but they shy away from therapeutics because they lack expertise and networks, even though therapeutics is by far the biggest sector of healthcare VC and where the returns are.
There is no real seed / angel ecosystem in biopharma, despite VCs investing $17B in the space in 2018.
So there are lots of interesting companies / founders that the funding market is not currently equipped to serve.
I'm considering doing a program on investing in biotech startups to address this. The format would be similar to the program I currently do on biotech entrepreneurship: weekly lectures / guest speakers (cell biology 101, a VC discussing how they do technical diligence, a successful entrepreneur discussing her story, etc). We'd also do bring in startups to pitch, then have a guided discussion of the company, perhaps moderated by a VC.
Ideally, at the end of the program, each investor would invest in a startup, as the best way to learn investing is by doing it under the guidance of experienced investors.
Would people be interested in something like this?
Not interested. Unlike the "normal" tech field, biotech and pharma is an extremely high risk investment and if you aren't a life scientist, it's almost impossible for you to separate the wheat from the chaff or do any kind of due diligence. A "cell biology 101" course won't help with that, you'd need a bachelor's degree at the very least. It's biology at the end, and biological systems are so complex that it costs billions to develop a drug, and you don't have a guarantee that you will find a working drug.
Thanks for sharing your feedback, I certainly hear those points often and they are understandable concerns. I'll provide feedback below for others who may share these concerns:
Biopharma is a high risk investment, but I'd challenge the notion that biotech investing is any more risky than tech, and suggest it's potentially more rewarding. In the last few years biotech VCs have actually done better than tech VCs [0]. Most exits happen years before FDA approval. Of the 46 major VC-backed biotech IPOs in 2018, the average company went public 3-4 years after founding and was in Phase 1 clinical studies.
Recently there have been several biotech startups that went from first VC round to $8-10B+ exit in less than five years. Kite Pharma, which was acquired for $12B 5 years after Series A, grew to that size faster than SpaceX, Twitter, Pinterest or Dropbox.
You do need knowledge of life science to invest in biotech, but you don't necessarily need a PhD. I know successful biotech CEOs, VCs, hedge fund investors, etc who don't have science backgrounds. And even PhDs find that their expertise, which is in a very narrow field, does not apply to technical evaluations of other fields. A cancer biologist will not be an expert in pharmacodynamics, toxicology, clinical trial design, or protein engineering. You do diligence in biotech by finding experts in all of those areas and drawing upon their knowledge.
A cell biology 101 course won't make you a good investor, but neither will a PhD. Most of what you learn in a PhD or undergrad bio degree won't help with biotech investing, and you will still need to learn a lot after getting those degrees. The best way to learn how to invest is to do it, only investing what you can afford to lose, and under the guidance of experienced investors. PhDs or MDs absolutely help, and are the best way to learn about science, but are they the best way to learn biotech investing?
The course wouldn't make you a successful biotech investor, but it would provide a foundation for people to learn more efficiently. I think that if you actively invested in biotech for 5 years with guidance from mentors -- even with no science background -- you'd be a better biotech investor than if you did a PhD without doing much investing
[0] https://lifescivc.com/2016/11/biotech-venture-capital-mythbu...
I'm a long way away, but the entrepreneurship program looks great. Have you thought of videoing the lectures?
Thanks! I'm thinking of doing a podcast series based on the lectures. The lectures themselves are pretty interactive with lots of participation, so those may not be the best to record.
I hosted a panel on biotech VC at Berkeley last fall and we recorded that, the panelists were also guest speakers for the class: https://www.baybridgebio.com/events
I am extremely interested!