Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

I work in biotech so I may be able to share some of my experience in the field. That said, I may also be sharing my mis-experience too ;)

Biotech startups are longer term things than software startups. Typically, your product doesn't get to the market until years 10/12 of the business. This is due to the regulatory issues like with the FDA or the EMA and other countries. Critically, that approval to be on the market or not is made near the end of those 10/12 years.

So, yes, you bust your butt to get the business going for a decade or more and then the regulatory agency decides if it can be sold[0]. Many other biotech people complain about this (and rightly so!), but I personally feel that this is the 'lesser evil'. We do not want pacemakers, knee joints, or pharmaceuticals to be developed like exercise equipment.

That said, the new product is likely to be a new market entirely, and one that you now have a near total monopoly on.

Like with any start-up, it's a risk/reward calculation. And biotech tends to be a high risk business, thus leading to high rewards that are economic, psychological, and spiritual.

[0] To be clear, this is a very complex process, and I have simplified it down. Each business and use case is very different.




Thanks for this.

I am always confused how an investor should approach investing in the biotech space without any medical knowledge. Any thoughts you can share?


My personal recommendation for anyone unfamiliar is to begin by read the relevant literature re: the field being worked in by the company. You can access most things through pubmed.

Admittedly that will most likely be a slog. But realistically you need a deep understanding of the molecular/biological context when investing in this space to understand whether or not a drug will be successful.

I worked for a YC biotech (S18) this last year in a scientific role, but bridging the gap between investor to startup has been something I've been thinking about as a possible career in the future...


One way I have seen is to have a cadre of scientific/medical advisors with skin in the game (usually, on the board). This is also one of the paths out of debt for MDs that don't want to practice or MD/PhDs in general. With a few people that actually know the science/art, you can then focus on the finance and other issues.

The science part isn't always hardcore mol-bio, as many devices can be a bit more like traditional engineering (even internal ones). But many of the problems that the various agencies will cite will be mol-bio related. Even as a hardcore investor, unless you have the many years of background, or can get people with background to put their own money in it, you are going to have a hard time. Paying just for consulting isn't likely to be appropriate due-diligence. Biology is monstrously complex and frustrating even in one individual, let alone a population. As such, it takes a lot of research to have a good clue of what is going on, more so that you can likely pay consultants for.

EDIT: Again, I want to stress that every situation is different and that I am only relating my personal experiences here.


I've invested in a few smallish ($200M to $2B) biotechs over the past decade or so. While I eventually got out with a small profit, I have sworn off ever investing in one again.

Too much time and too many grey hairs from following the hope-and-disappointment cycle as you read the tea leaves from ambiguous trial results and FDA announcements.


Are there any specific instances that stand out to you that you can share?


Mesoblast. I won't bother to share the full story of all this company's ups and downs over the last decade but let's just say that the amount of time I spent tracking the news on it was far out of whack with its importance to my portfolio.


Thanks for sharing!

https://en.wikipedia.org/wiki/Mesoblast

You're not kidding, they have been a roller-coaster!




Consider applying for YC's Fall 2025 batch! Applications are open till Aug 4

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: