In the world of ‘start-ups’ especially in the life science domain, there are various factors that make it attractive or unattractive.
For a start up, initial years is all about product development, team building and then followed by massive marketing. A good product if not marketed well is as good as an unknown commodity and hence no one would show interest in it. And then it needs very good ‘differentiators’ to ward off competition not only from the established players but also from ‘me too’ type companies.
To efficiently execute all the above activities might become difficult for a ‘bootstrapped’ start-up. So investors who understand the domain need to step up and support at this stage of the start-up. A flourishing company might be more attractive for an investor but to see a ‘promising’ company reach a higher pedestal with proper strategic and financial investment surely is more gratifying.
Many experts have commented on what investors should look at before investing in a start-up: 1) Team 2) domain 3) Technology etc. Individually, all the above play an important role in the final decision making but there is no simple formula to it.
After all, it boils down to the risk taking appetite of the investor. There is another important aspect of the ‘life science’ domain which makes it tricky, which is the possibility of a long gestation period required to turn the business profitable. Having said that, now with the advent of genomics and the newer ‘art’ of data science sprinkled onto it, the 'business of biology' looks far more interesting and predictable with possibly lesser gestation period in this domain. However, there are probably no guarantees in life.
A sunshine sector in months or years can become a non-starter and vice versa. Founders are overtly optimistic and investors are overly skeptical, which they should be. It is a question of matching the expectation of the founders and the investors which would lead to a fruitful partnership and a long journey of success!