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Attracting Early Stage and Cross Border Venture Capital in the Biotechnology Sector: Showcase Your Value to Investors

Kokaia, Givi LU and Alm, Elin (2015) FEKP02 20151
Department of Business Administration
Lund University School of Economics and Management, LUSEM
Abstract
Biotechnology companies are characterized by long development and capital intensive processes, which includes certain risks throughout the development chain. When attracting investments from VC funds, specific portfolio strategies and evaluation criteria drive the decision making for investors, and biotechnology companies can face significant challenges in knowing what investors seek. Also, due to the global attributes of the biotechnology sector, cross border VC funding commonly leads to additional challenges. Therefore, early stage biotechnology companies can face difficulties to fully understand what evaluation criteria international VC funds use, as well as how they can successfully meet those criteria by balancing their value creating... (More)
Biotechnology companies are characterized by long development and capital intensive processes, which includes certain risks throughout the development chain. When attracting investments from VC funds, specific portfolio strategies and evaluation criteria drive the decision making for investors, and biotechnology companies can face significant challenges in knowing what investors seek. Also, due to the global attributes of the biotechnology sector, cross border VC funding commonly leads to additional challenges. Therefore, early stage biotechnology companies can face difficulties to fully understand what evaluation criteria international VC funds use, as well as how they can successfully meet those criteria by balancing their value creating activities. Cross border VC funding is especially important for the biotechnology sector in Skåne and Sweden, due to limited access to local capital. Although existing literature provides insight to evaluation criteria for venture capitalist, there is limited literature which incorporates industry specific evaluation criteria related to biotechnology and cross border aspects. Therefore, this study attempts to research the evaluation criteria used for cross border investments in the biotechnology sector. A systematic combining research design is used, where qualitative data is collected from semi-structured interviews with seven international venture capital investors and seven biotechnology representatives. The findings support criteria related to the \textit{team}, \textit{product}, \textit{market}, \textit{finance}, and \textit{other cross border aspects}, which are derived from and supported in existing literature. The evaluation criteria are further specified by identified themes and patterns to provide insights for early stage biotechnology companies engaged in attracting Venture Capital. (Less)
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author
Kokaia, Givi LU and Alm, Elin
supervisor
organization
course
FEKP02 20151
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Venture capital, biotechnology, cross border investments, evaluation criteria
language
English
id
5471053
date added to LUP
2015-08-19 11:15:40
date last changed
2015-08-19 11:15:40
@misc{5471053,
  abstract     = {Biotechnology companies are characterized by long development and capital intensive processes, which includes certain risks throughout the development chain. When attracting investments from VC funds, specific portfolio strategies and evaluation criteria drive the decision making for investors, and biotechnology companies can face significant challenges in knowing what investors seek. Also, due to the global attributes of the biotechnology sector, cross border VC funding commonly leads to additional challenges. Therefore, early stage biotechnology companies can face difficulties to fully understand what evaluation criteria international VC funds use, as well as how they can successfully meet those criteria by balancing their value creating activities. Cross border VC funding is especially important for the biotechnology sector in Skåne and Sweden, due to limited access to local capital. Although existing literature provides insight to evaluation criteria for venture capitalist, there is limited literature which incorporates industry specific evaluation criteria related to biotechnology and cross border aspects. Therefore, this study attempts to research the evaluation criteria used for cross border investments in the biotechnology sector. A systematic combining research design is used, where qualitative data is collected from semi-structured interviews with seven international venture capital investors and seven biotechnology representatives. The findings support criteria related to the \textit{team}, \textit{product}, \textit{market}, \textit{finance}, and \textit{other cross border aspects}, which are derived from and supported in existing literature. The evaluation criteria are further specified by identified themes and patterns to provide insights for early stage biotechnology companies engaged in attracting Venture Capital.},
  author       = {Kokaia, Givi and Alm, Elin},
  keyword      = {Venture capital,biotechnology,cross border investments,evaluation criteria},
  language     = {eng},
  note         = {Student Paper},
  title        = {Attracting Early Stage and Cross Border Venture Capital in the Biotechnology Sector: Showcase Your Value to Investors},
  year         = {2015},
}