3 tips for biotech startups looking for non-dilutive capital to weather the economic downturn

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Finance for the future your biotech start-up through a market crash means more than just raising capital or rushing to close a round.

Every week, I do due diligence on dozens of life sciences companies whose technology could help protect the world from the next biohazard, pandemic, or whatever. I see everything from neural probes and artificial intelligence for clinical trials to synthetic biology and quantum sensors. Every startup that came across my desk was well capitalized, but trouble may be on the horizon.

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Given the resilient inflationary market dynamics and continued fiscal tightening, it is only natural that more speculative businesses with higher cash costs, such as biotech, especially deep science, are the hardest hit and hit first.

But public investment cycles counter the dynamics of private investment. When the economy performs better, it requires less intervention and support. During a crisis, monetary and fiscal policy is designed to quickly address the economic burden. This is as true today as it was in the early 2000s or after 2008.

Founders of biotech start-ups are the most vulnerable in these conditions and must go beyond classic fundraising to survive. During an economic downturn, non-dilutive grants or contracts from government should be seen as more attractive than ever because they provide a runway without dilution and make headlines.

As a startup, it’s easy to focus on raising dilutive capital, even if the macroclimate may not be the best for it.

Our team built our venture capital firm through consulting work. Since 2019, we have worked with more than 100 startups in every sector across the country, providing them with more than $350 million in new technology adoption.

We look broadly at national defense and look at any technology that could help us in the future, including the life sciences. Most founders don’t know this before they contact us, but there are large banks of non-dilutive capital dedicated to applied life science research that have a 100% success rate. You just have to know where to look.

So what should you do to secure non-dilutive capital from the government for your biotech start-up?

Don’t ignore DD

We consistently support healthcare startups who don’t know how much life sciences research and development funding the US Department of Defense has; some of them are even dedicated to small businesses.

The Army, Navy, and Air Force have their own strategic priorities in health and life sciences, but so do the Department of Defense Health Agency, Defense Innovation Unit, Congressional-led Medical Research Program, Agency for Advanced Study. US Department of Defense and NASA research projects, to name but a few. .

Credit: techcrunch.com /

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