Venture Capital and the European Biotechnology Industry

by William Bains.

Published November 2008 by Palgrave Macmillan Ltd., ISBN 978-0-230-21719-5

Academic: making money from biotech . 38 - 40
Acquisition . . 12, 165
. and share structure . 130
. valuations . 76
Analysts (stock market) . . 84 - 5
Angel . See Business Angel .
Anti-dilution provisions . . 128
BioRegio (Germany) . . 179
Biotechnology industry . . 5
Biotechnology Means Business initiative . 179
Board of directors . role . 91 ff, 188
. VC directors . 97
British Venture Capital Association (BVCA) . 33
business angels . . 7-8, 194
. directorships . 101
. equity gap . 68-9
. inventor productivity . 140
Business models . . 43, 109ff
. and mergers . 135 - 6
. change in . 120
. of VC . 150
Business quality . . 46
Capitalization . . 15-6, 19-20
. at IPO . 74
Carried Interest . . 10-1, 151 ff
. optimal . 190
Clusters . . 141
Company failure . . 165
. causes . 63 - 4
Company formation . . 14-5, 24
Company funding (US vs EU) . . 56
Company origins . . 52
Consultants . . 95
Corporate venturing . . 27, 167
Deal flow . . 46-7, 66
Debt funding . . 125
Directors of companies . . 91
. See also Board of Directors
Drug approvals . . 17-8
Drug discovery . . 112 ff
. technology . 117
Due diligence . . 9, 67, 98
Duration of investment process . . 65
Economic benefit from biotech . . 174 ff
Employment . . 16-7, 176 ff
Entrepreneur . . 36, 71, 87, 145-6
. impact of VC model . 192
. lack of success in VC . 159
. removed from companies . 102 ff
. reward . 37
. support from VC . 93
. US s Europe . 42
Equity gap . . 68-70, 180, 183
European lag . . 14, 23
European Venture Capital Association (EVCA) . 26
. valuation guidelines . 33, 190
Evaluation of investments . . 89 ff
Exit . see also IPO, acquisition . 12, 33-4, 74
. and share structure . 129
. and VC grandstanding . 166
Facilities . cost . 62
Failure . causes . 63 - 4
. rates . 44
FIPCO model . . 114
Follow-on financing . . 81 ff
Founders (of companies) . See also Entrepreneur .
. as management . 50
. removed from companies . 102 ff
Fund life (duration) . . 10-1, 13, 151
Funding . basic science . 53 - 4
. companies . 56 - 7
. through IPO . 75
Funding gap . see equity gap . 183
Fundraising (VC) . by VCs . 156, 168 - 9
General partner . . 151
Genomics . . 76, 122
Genomics companies . . 77 - 79
. business model . 115, 117-8
. stock bubble . 83
Governance structure . . 91
Government support for biotech . . 169, 173ff
Grandstanding (by VCs) . . 166
Human Resources management . . 148 - 9
Innovation Act (France) . . 179
Integrated pharmaceutical company model . 114
Intellectual property . see also patents . 147
. commercialization from Universities . 177 - 8
Investment . . 55 ff
. and equity gap . 69 - 70
. time to make . 65
. US vs EU . 56 - 7

Investment evaluation . . 89 ff
investment process . . 66 - 8
investment rounds . . 57
Investor readiness . . 70
IPO . . 12, 73 ff, 165
. and grandstanding . 166
. and share structure . 129
. as preferred exit . 18
. performance and management . 106
ISO 9000 . . 149
Legal actions of biotechs . . 64
Licensing . . 116
Lifestyle business . . 6
Limited partners . . 151, 189
. Return of investment . 31
Liquidation . events . 128 ff
. preferences . 122 ff
Living dead investments . . 164
Location (of company) . and management . 48 - 50, 141
Management . . 48-50, 141-4
. quality in Europe . 47 - 9
. VC as . 92
. VC perception of role . 86 ff
. experience . 142 - 5
. succession . 102 ff
Management fees (of funds) . . 10-1, 151ff, 190
Medicine development . . 112 ff
Merger . see also acquisition . .
Merger . . 133 ff, 165
. barriers to . 138
. and share structure . 130
Minority shareholder oppression . . 188
Mobility . of management . 48 - 50
. of scientists . 61 - 2
Monoclonal antibodies . . 62
Moral Hazard . . 124 ff, 162
NED (non-executive directors) . . 101, 188
No Research, Development Only company (NRDO) . 121
Number of companies . . 14-5, 24
Patents . . 60, 147
Pension funds . . 189
PIPEs . . 81
Platform technology companies . . 77,121
PR and VC behaviour . . 162
Preference shares . . 123 ff, 193
Principal-Agent theory . . 124 ff, 162
Private Investment in Public Entities (PIPES) . 81
Profit share in VC funds . see also Carried Interest . 151 ff
Quality . . 148
Rate of formation of companies . . 15, 24
Return on Investment (ROI) . . 10, 30, 74, 152ff, 191
Salaries . . 61, 142
SBIR programme . . 54, 181
Science . . 61
. public funding . 53 - 4
. quality in Europe . 51
Science parks . . 141
Scientist salaries . . 61
Secondary offering (financing) . . 81 ff
Seed funding . . 69
Serial entrepreneurs . . 146
Share structure . . 123 ff
Shareholder oppression . . 188
Shareholder powers . . 92 ff
Shareholder veto . . 91 ff
Shareholders' Agreement . . 92
SMART awards . . 181
Software in biotech . . 63
Spin-outs . . 52, 169ff, 182, 190
. and funding . 55
. founder survival . 102
Staging of investments . . 68
Start-ups . capitalization . 52, 55, 102
Succession . of management . 102 ff
Syndicate (investment) . . 9
Technology management companies . 70, 82
Trade sale (of company) . see acquisition .
Tranche (of investment) . . 68
University Challenge Funds (UK) . 179, 184
Valuation . . 33, 38, 76, 195
. at IPO . 74 - 76
. of research companies . 118
. of VC funds . 190

VC investment process . . 8 - 10, 97
VC partner . . 98-9
VC support for business . . 93 ff
Veto powers (shareholder) . . 91 ff
Visibility Event . . 162 ff, 171