The role of Business Angels in life science investments

A panel discussion on the role of business angels in life science investments during Aarhus Investor Summit | Science Edition highlighted several key points.

The discussion emphasised the critical nature of securing investments for early-stage spinouts in the life science industry, considering the significant risks involved. One major challenge identified was the scarcity of investors in the field of life science startups. Business angels were recognized as vital players in bridging the funding gap for these startups until they are ready for venture capitalists (VCs).

Collaboration with business angels was seen as particularly beneficial at an early stage, before soft money sources become available. It was noted that business angels should bring more than just financial resources to the table; they should also possess relevant competencies and expertise. However, it was acknowledged that for investments requiring substantial capital, the business angels must have a deeper understanding of the science involved.

The panel observed that startups with business angels on board demonstrate improvements. Business angels bring not only investment but also valuable experience and knowledge, which contribute significantly to the success of the startups. However, the discussion highlighted challenges when it comes to therapeutics and business angels, particularly in cases where large investments of around 50 million Euros are needed. Although the initial gap in funding may be smaller, newer investors often seek better positions in these high-capital cases, making it a difficult game for business angels. As a result, it was suggested that business angels may consider investing in smaller capital requiring cases to avoid being heavily diluted in highly capital-intensive ventures.

Overall, the panel discussion underscored the importance of business angels in the life science industry, particularly in the early stages of startup development. Their involvement not only provides crucial funding but also brings expertise and experience that greatly benefit the startups. While challenges exist in certain high-capital cases, the role of business angels remains vital in supporting and nurturing the growth of life science innovations.

Watch a video from the summit here:

Date:
22. maj 2023

The panel discussion was moderated by the experienced venture builder Claus Hansen and the panel consisted of seven experts representing different life science companies, venture capital firms, and investment funds:

  • Thomas Holm Pedersen from NMD Pharma A/S
  • Sten Verland, PhD MSc, from Sunstone Life Science Ventures
  • Jacob Falck Hansen from Lundbeckfonden / Lundbeck Foundation
  • Per Barfod Andersen from BioInnovation Institute
  • Ole Kring from Denmark's Export and Investment Fund
  • Jan Mousing from VPCIR Biosciences
  • Monica Milter Ehlers from Innovation Fund Denmark

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