From our conversations with biotech startups, we hear that many of our biotech leaders are wondering how COVID-19 will affect their next funding rounds. So we connected with Ari Fine Glantz, Director of Development and Strategic Initiatives at the New England Venture Capital Association (NEVCA), to understand how VCs are thinking and acting during the pandemic. Glantz is an entrepreneur with roots in tech, social work, and sports, and shares insights based on his rich experience in fundraising, partnerships, and business development.
Has COVID-19 affected VCs investments in biotech startups right now, in terms of timelines, funding amount, etc?
The pandemic definitely affected the biotech fundraising landscape, but probably not as much as many would have expected. Unlike the consumer technology space or even B2B Saas, the market implications were a question of delay vs. deterioration. The demand for new therapeutics didn't go anywhere, rather, the schedule on which those therapeutics could be developed was elongated. The short term casualty in the biotech fundraising has been first time founders and those raising first capital, but safe to say that is the case in any downturn.
Have you noticed any differences in VC behavior pre-COVID and during COVID? If so, what’s the biggest shift that has occurred?
Right away, there was a big pause in fundings as everyone kind of took a deep breath. But that didn't last too long, and the capital has been flowing for a few months now. If anything, the trend toward venture creation has accelerated. With face to face meetings largely impossible and dilligence a challenge, I think even more of a premium has been put on longstanding relationships. The attractiveness of in-house control and limiting variables has increased.
What has been the most challenging thing for VCs to adapt to during quarantine?
Zoom diligence and inability to get inside the lab.
How can startup CEOs network with potential investors effectively while there are no in-person networking sessions?
Well, shameless plug first: founders should apply to the NEVCA's upcoming event: Unpitch BIO, where they can do exactly that. Here's a link to the application. Other than that, it's tough. The conference circuit has largely gone online , but the serendipity is hard to recreate. I would say, look at the familiar places, and see who has done the most creative work in bringing their offerings in the virtual world.
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