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Valuing and Investing in Life Science Companies

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Abstract

Life science innovation is about creating biovalue, the ability to influence of enhance biological systems and primarily human biological systems, and translating such biovalue into economic and financial value. Venture capital investors, innovation systems representatives, and start-up company executives and directors all share this commitment to produce therapeutic value and economic worth in the ventures. What venture capital investors refer to as the pre-investment phase in the venture capital investment process involves all analytical procedures that precedes the actual investment decision, including the first contact between the venture capital investor and the start-up firm, the evaluation of the investment proposal, and the additional analysis of the market potential and therapeutic value of the underlying basic research finding. All these pre-investment activities and decisions show that the venture capital investor is by no means strictly operating on the basis of calculative practices and predefined algorithms for the assessment of the economic worth of biovalues; on the contrary, the venture capital investor takes a broader look at the start-up firm and its potential to determine how a variety of stakeholder and actors will respond to and possibly acquire the new therapy or product offering. The venture capital investment process thus unfolds as an analysis of the socioeconomic and institutional conditions wherein the new therapy will be embedded if being successfully developed and launched in the market.

Keywords

  • Life Science
  • Venture Capital
  • Investment Horizon
  • Venture Capital Investor
  • Academic Entrepreneurship

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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  • DOI: 10.1057/9781137392480_5
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© 2015 Alexander Styhre

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Styhre, A. (2015). Valuing and Investing in Life Science Companies. In: Financing Life Science Innovation. Palgrave Macmillan, London. https://doi.org/10.1057/9781137392480_5

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