Navigating Your First Fundraise as a Life Sciences Founder
Raising money is difficult enough for anyone, but the process can be far harder for life sciences businesses trying to decode how VC works while navigating scientific risk, regulatory pathways, clinical timelines and capital intensity.
On the face of things, it looks linear enough. You pitch, you go through diligence, you agree the term sheet. But this assumes you’re a passive participant in the process, which couldn’t be further from the truth. By contrast, if you’re going to get funded, you’ve got to drive things along, whilst often bringing non-sector specialist investors on the journey. Below I’m going to explain how.
Adopt a sales process then think deeply about the realities of fundraising
Treat fundraising like a sales process. Invest time into researching and understanding the buyers (investors) of your technology[TW1] (business). Once you’ve got a better idea of who your investor base is, start outreaching long before you need to raise. Get your business in front of investors and keep them up to date with key milestones and traction. That way, when you come to raise, your investors will already be aware of your company and the buzz around it.
When you start your actual fundraising, build confidence and buy-in. Show your investors that your team is the one to back and now is the time to invest. Your aim should be to drive multiple investors from the awareness stage to intent, before drilling down to those investors that are ready to make a decision. As with all prospecting processes, you’ll lose some along the way, and that’s fine.
The reality is that not every investor is going to have mutual chemistry with you or believe in your business. Your job is to move at pace and sift the investors that aren’t interested from the ones that are. Align yourself with those investors who have belief and confidence in your business. Be prepared and ready your team for heavy scrutiny during the diligence stages. You should also adopt a process that allows you to progress through evaluations in a structured way.
In terms of timelines, life sciences ventures are a bigger, and often more binary, bet for investors, which is why it can take longer than other sectors to syndicate and close rounds. Investors want to see more data, more validation and more traction, which takes time – sometimes up to a year.
You have to be realistic about this timeline and also what’s achievable while fundraising (because your day-to-day can’t suddenly stop!). Understandably, during a long investment process, investors will want to see progression while your attention is diverted elsewhere. What will set you apart from other businesses is delivering on your expected traction throughout the fundraising process. Therefore, you should plan for distractions and capacity constraints while still ensuring you can demonstrate onward momentum.
Identify a champion but don’t rely on PhDs to carry the story
If you’ve managed to get a foot in the door with an investor, it won’t be long before you identify a champion. This is an investor on the inside – someone who will advocate for your business because they believe in you or your innovation.
Where life sciences founders often fall down is they assume their internal champion understands their area of expertise more than they actually do. The investor may speak your language, but they may not understand the nuances of your space. This means they’re not equipped to articulate your innovation and sell your business internally at investor committee meetings.
I’ve personally come up against this challenge. As a PhD, I may understand the technical language, but being a PhD doesn’t necessarily mean I’m a specialist in every area of life sciences. Meeting an investor from an academic/technical background is not a silver bullet.
The onus is on you to understand your audience, to tell a compelling story, present your science in a clear and accessible way, and share a plan that’s grounded in viability.
PhD or not, your champion is rarely the sole person responsible for the final investment decision, so equipping your champion with the requisite information within a well-populated data room is one of the best steps you can take to drive an investment process forward.
Take yourself out of academia and get comfortable with the commercials
Investors will rarely question your intelligence in your subject matter, but they will question your business acumen. In other words…
Can you sell – and not just to customers but to investors, industry stakeholders and other parties which will be critical in the pathway to future success
Can you build partnerships?
Can you navigate the regulatory landscape?
Can you articulate how your IP strategy informs your commercial strategy?
Do you have a good understanding of market adoption?
Do you have a good understanding of the commercial market you operate in – what milestones will unlock future funding rounds, what deliverables will make you an attractive acquisition target?
Can you recruit the expertise required to help you build a successful venture?
We’ve backed great businesses where the academic founder personally opened doors, built early pipelines, and leveraged their reputation to accelerate traction. The ability to step beyond the lab and drive momentum is a superpower.
Understatement is also common. Scientific culture values caution whereas success in venture capital requires conviction. You don’t need hype, but you do need a clear, confident articulation of why your business matters and why this is your time.
Having a deep understanding of the current team and their limitations is key. It’s not uncommon with life sciences ventures for commercial leadership to be bought in at a later stage to augment the exceptional technical talent in the team. If your team lacks commercial experience, then be upfront about it and discuss the plan with investors, focusing on when and why additional talent might be needed. Bolstering great innovation with commercial acumen will create a better outcome for everyone.
Get your data room in order and navigate reservations around regulation
Founders often think of the data room as a practical necessity, something that simply helps diligence move along. Not true. It’s also a signal. A messy or reactive data room slows processes and infers a lack of operational discipline.
By contrast, a structured and thoughtful data room communicates something reassuring. It shows that you’re organised, that you anticipate questions, and that you manage your business in a considered and deliberate way.
A strong data room will usually include clear intellectual property documentation, a well-reasoned regulatory strategy, and a detailed use of funds clearly tied to milestones.
Transparent assumptions around timelines and costs also matter. Investors are not only looking at what you’ve built so far, but also how you think about what comes next.
This is closely linked to how you present your regulatory strategy. Many founders underestimate how closely investors read regulatory positioning. Phrases such as “we’ll pursue the fastest pathway” or “reimbursement will follow outcomes” can sound reassuring, but they tend to raise questions from more experienced investors who will expect an understanding of how your regulatory strategy also supports your market access plan.
Get comfortable with questions like:
Which pathway are you referring to, and why does it make sense for your product?
What precedent are you relying on?
What risks sit alongside your approach, and how are you planning around them?
These aren’t trick questions. They’re part of how investors assess whether a plan is credible.
Don’t see the term sheet as the finish line
A signed term sheet represents alignment in principle, not money in the bank. Even at this stage, deals can (and do) fall apart during diligence and legals, particularly if momentum slows or expectations begin to drift.
For that reason, it’s important to keep the process moving. Responding promptly, maintaining alignment across parties and continuing to push timelines forward all help preserve confidence. When multiple investors are involved, this can require extra care with proficient communication and stakeholder management. Each fund will have its own investment committee process and internal pace, and those processes are rarely synchronised.
Bringing that group together is part of the founder’s role during a live round. If timelines slip or momentum fades, it tends to be felt most acutely by the business. Treating the period after a term sheet with the same focus and energy as the earlier stages can make a meaningful difference to whether a round ultimately completes.
Start your next raise earlier than you think
A final point that’s crucial in our space – once you close, the clock restarts. The best founders build relationships with future investors a year before they need them. They share milestones. They create familiarity. They reduce friction. Fundraising becomes easier when it’s continuous, not episodic.
Laurence Tan is a Senior Investment Associate at PXN Ventures and is part of the team responsible for backing life sciences founders from the GMC Life Sciences Fund by PXN Ventures, which is a collaboration between PXN, Bruntwood SciTech, Greater Manchester Combined Authority and Enterprise Cheshire + Warrington. They also deploy the Northern Powerhouse Investment Fund II for the British Business Bank in the North West. The PXN team can invest from £200k up to £8m in the most exciting North West businesses.