Are Biotechnology Startups Different?

TL;DR

This paper challenges the notion that biotechnology startups are fundamentally different from other tech startups, showing they share many characteristics like funding, exit timing, and geography, with some differences in founder experience and financial metrics.

Contribution

The study provides new empirical evidence that biotech startups are more similar to other tech startups than previously thought, based on analysis of extensive new databases.

Findings

Venture capital raised is similar across startup types.

Time to exit and geographic distribution are comparable.

Differences include founder experience and financial performance at exit.

Abstract

In the domain of technology startups, biotechnology has often been considered as specific. Their unique technology content, the type of founders and managers they have, the amount of venture capital they raise, the time it takes them to reach an exit as well as the technology clusters they belong to are seen as such unique features. Based on extensive research from new databases, the author claims that the biotechnology startups are not as different as it might have been claimed: the amount of venture capital raised, the time to exit, their geography are indeed similar and even their equity structure to founders and managers have similarities. The differences still exist, for example the experience of the founders, the revenue and profit level at exit.