The biotech startup world can be highly competitive. Many academic scientists launching startups have exciting, cutting-edge ideas that can make a difference in the world if they succeed. Yet, funding for new companies remains limited.
While a typical startup can be launched by anyone with a new business idea, an academic spinout is a distinct type of startup formed specifically to commercialize intellectual property (IP) developed within a university research lab. This transition from institutional academia to commercial enterprise creates its own set hurdles.
Capturing the attention of venture capitalists (VCs) is a challenge on top of that transition. Because spinouts must navigate complex university IP licensing and technical scientific concepts while proving their commercial viability, data alone won’t speak for itself: A communications plan that reflects what investors want is essential to creating a VC-backable brand. With a storied history of working with academic spinouts, as well as mentoring hopeful startups through the annual Science2Startup symposium — a program that connects academic founders with leading venture investors — HDMZ has collected several key insights for building a communications and brand strategy that attracts investors.
Determine your story early
A key mistake many biopharma and biotech startups make is not considering communication and public relations until the last minute. Rather than waiting until the eve of series funding to think about a brand story and how it should be put out into the world, startups should define it as soon as possible. This is especially critical for spinouts, in which academic researchers must shift their narrative from proving a scientific hypothesis to demonstrating commercial value.
Once that story exists, it has to hold up to public scrutiny. VCs need to understand how the spinout defines itself and what it’s doing — and believe in that story. Even if it has compelling science and the best preclinical data, VCs are less likely to invest in it if the company is perceived as being unable to get its story straight. Establishing what that story is early on in a company’s lifecycle and communicating it effectively is crucial to staying focused as an organization.
What goes into a brand story? To start, it is important to define a purpose (the company’s mission), a promise (the unique benefit the company brings), and a vision (the company’s aspirations for the next few years). Beyond that internal framework, investors need to know what base problem a spinout is trying to solve, and the reasons to believe in it. Another important consideration is finding a way to differentiate the brand, so that it does not come across solely as a “me-too” spinout developing the same mechanism of action as ten others. This helps a company stand out from the competition.
A key mistake many biopharma and biotech startups make is not considering communication and public relations until the last minute.
Make the business case for your spinout
Another important factor for VC interest is understanding the economic practicalities of a new startup. Good data on its own does not demonstrate, for example, the potential risks and benefits of investing in the prospective drug or product. As a result, spinouts must take the time to consider and answer the kinds of business questions VCs want answered. Examples include:
- Target patient population — who they are and how many are affected
- Market landscape — current options and unmet needs
- Competitive therapies — what exists and how similar they are
- Differentiation — what edge the proposed therapy has and whether it is patented
A spinout should also be able to explain its strategy, timeline and concrete goals — such as reaching the next business milestone to prove the execution investors crave. While carrying out its strategy might depend on the startup achieving funding, having a well-researched plan or company deck in place can help to show that VC investments will be used responsibly. Together, these elements will help to build an understanding of how a spinout can become financially successful as a business.
Put scientific concepts in terms that your audience will understand
If a spinout has a completely new technology that has never been seen before, there’s a responsibility to educate investors and the public about what it is.
A common thread for all of a spinout’s communication strategy — from the brand story to the business case — is the importance of balancing the need for scientific detail with a compelling narrative. The data behind any life sciences startup is critical. However, VCs need to be able to understand what it says and why it is important. As a result, communications should step back from unnecessary technical details and focus on the data’s significance.
It’s easy to assume that life science investors will understand in-depth scientific topics because their focus is on biotech or pharma. But the truth is more complex. The world of life sciences is so broad that it is impossible to understand the nuances of every possible niche. Even if an investor specializes in one area, that does not mean they will have detailed knowledge of another. It’s imperative to explain the importance of a spinout’s work at a high level, so that those unfamiliar with the disease state or specific technology can still appreciate why it matters.
That gap widens further when the technology itself has no precedent. If a spinout has a completely new technology that has never been seen before, there’s a responsibility to educate investors and the public about what it is. When something is totally novel, how it works and why it matters is a complete unknown to everyone except those who made it. This places a spinout in a unique position to make knowledge about it accessible to audiences outside the company and shape the narrative, as well as help VCs to understand why they should care about it.
Crafting a brand strategy with expertise
A life science spinout’s funding success hinges on a compelling story that connects with potential investors. As an experienced life sciences communications agency, HDMZ has worked with many academic spinouts hoping to bring their groundbreaking findings through development and onto the market, and established key strategies to encourage biopharma and biotech investment. From Series A to defining an initial brand identity, HDMZ provides the strategic communications, visual branding, and investor relations collateral needed to stand out.
