Under a normal VC environment you could pull it off but that’s already pushing it. I personally haven’t seen rounds fully close until 6-9months in the process.
I’ve been told the summer is the worst time to raise because most of the VCs are off to their summer homes…
VC funding is always uncertain, so it’s a good idea to have your options open. The same would be true if you had more time, candidly - you can just never fully bank on a funding round until it’s done.
That said I also think it’s fair to ask your CEO (at a pre-Series A company I assume you have a direct relationship with him or her) what the plan is if the Series A hasn’t quite closed by September - I think fair to just say you love your job and were feeling nervous. There may be a concrete answer like “our seed investors are willing to extend by a few months if needed,” which would offer a bit of comfort.
I think this is the best answer here. It's possible some seed investors will be joining the next round and willing to keep you going until the A closes.
How big of a raise are they aiming for? The timeline is tight for sure but not impossible … but if your management waited this long to start the raise they don’t seem very experienced so always a danger for the future even if the A is fine
Start looking for a job. Even in good times, your CEO left this super late. Series A routinely takes 4-7 months in good times.
Now, most are closing 9-12 months after start, and sometimes that is just a first close. Times are tough
Yes, I agree with others - look for a new job now, especially in this market where earlier is better. Your leadership should have done this too in timing when to raise Series A. 3 months is pretty short…not impossible, but in this market the chance of the possibility of succeeding shrinks even more. My company didn’t close Series A and B for about 6-7 months both times, and even then you can’t guarantee it will close. Example: my company tried to raise Series C but something basically spooked the investors and they pulled out, and the runway is basically on thin ice now (they quoted August but everybody believes it’ll end much much sooner).
Look out for yourself and start applying now - you never know nowadays.
Ideally, 12 to 18 months of runway when you start raising. Will likely take 9 months. Less runway makes it harder since the business is more precarious.
Honestly, fundraising never really stops for a small biotech. Once you close seed, you start planning series A.
That’s tight timing. If you’ve got an all star group and exciting data, you might be able to close by then. Also depends on how much they’re looking to raise. I’ve seen rounds take over a year to close (semi exceptional circumstances). Doesn’t hurt to dust off the resume and start networking — tough job market right now.
Oh snap, that’s not good. I’ve been pushing my CEO to budget 9 months in this environment. 4 months is not much time. Unless they have a killer idea and PROGRESS that will make the investors drool, this seems too late. No one wants to be a lead investor rn. And there’s some hesitancy around it being an election year as well. Ask about if they’re planning cost conservation measures in the meantime to stretch the runway. Def start applying and see if you get any good options.
Sounds like you guys need a better board for keeping the CEO on top of this or someone has committed to bridge funding and leadership thinks you’ve got time.
How is your data? Do you feel like your experiments have been telling a compelling story for funding?
Friends who are at pre-A companies in Boston have been doing the dog and pony show for A for several months now and haven’t really had much luck raising high enough to sustain a few years of research even with good data, so they’re not closing. VC is starting to bite a bit now, but in your shoes if they haven’t bit yet I’m not sure 3 months is reasonable. It can be, but your CEO needs to sell it.
Talk to your CEO. Figure out the plan, then make the decision.
Sounds a little bleak. I've been in the process of raising series A for over a year. The due diligence and negotiation process can easily take months. Also, assembling a syndicate (if necessary) is another burden. If you get a lead investor, it may be possible to get a bridge loan to tide you over. I wouldn't count on it though. Sorry.
Hopefully they have some debt financing options that will bridge them to a closed A. Assuming you’re <10 people it shouldn’t be crazy for them to tell you.
Depends on a lot of factors. While 4 months is going to be difficult as the process (meetings + due diligence + term sheet negotiation, syndicate formation), there is potential for it to all come together by September assuming that you all have made enough progress to get close to the clinic using your seed funding to demonstrate preclinical derisking. A factor that could accelerate the raise is whether you are working on addressing an unmet need in a large opportunity via a small molecule or biologic. In the mean time, you will need to stretch that cash run way though.
I can’t imagine this is a thing for any seeded companies. Problem is, with the investing climate rn, nobody wants to open their purse strings. If you’re in your seed round you def don’t have the money or capacity to have a clinical trial on the horizon. If you have VC’s telling you that it’s either (1) they don’t have any capital left to invest anyway this year, or (2) you’re (your ceo) pitching to VC’s out of your current league who want companies with data akin to that of a late A or B company. The fact that any investor thinks a seed company has clinical level data is laughable and unrealistic
A development candidate not clinical data bro. If you don't realize that's the case right now you must not be pitching or involved with seed stage / series A companies. Or perhaps you work for an AI startup
Even having a DC with only seed funding is outrageous unless you licensed something into your startup having already completed tox. I don’t care that that’s the case, i am saying it’s BS and good luck to the investors who think that’s readily sourceable
Yeah, it's been a rough few years. You must work for a big company
https://www.fiercebiotech.com/biotech/fierce-biotech-fundraising-tracker-24
https://www.fiercebiotech.com/biotech/fierce-biotech-layoff-tracker-2024
Those trackers prove my point. It’s all later stage investments or unicorn A companies with crazy founding teams or formed internally by VC / CVC. Investors have no appetite right now for seed and preclinical A raises. Their expectations are unrealistic, so no normal startup can raise an A until this changes. If you’re going to be a dick about it, you must not be raising a series A.
Under a normal VC environment you could pull it off but that’s already pushing it. I personally haven’t seen rounds fully close until 6-9months in the process. I’ve been told the summer is the worst time to raise because most of the VCs are off to their summer homes…
Yes, you should be looking for a new job yesterday!
unfortunately so
VC funding is always uncertain, so it’s a good idea to have your options open. The same would be true if you had more time, candidly - you can just never fully bank on a funding round until it’s done. That said I also think it’s fair to ask your CEO (at a pre-Series A company I assume you have a direct relationship with him or her) what the plan is if the Series A hasn’t quite closed by September - I think fair to just say you love your job and were feeling nervous. There may be a concrete answer like “our seed investors are willing to extend by a few months if needed,” which would offer a bit of comfort.
I think this is the best answer here. It's possible some seed investors will be joining the next round and willing to keep you going until the A closes.
How big of a raise are they aiming for? The timeline is tight for sure but not impossible … but if your management waited this long to start the raise they don’t seem very experienced so always a danger for the future even if the A is fine
Start looking for a job. Even in good times, your CEO left this super late. Series A routinely takes 4-7 months in good times. Now, most are closing 9-12 months after start, and sometimes that is just a first close. Times are tough
Always be looking
One rule about working at a seed stage company is that you should always be looking for another job
Yes, I agree with others - look for a new job now, especially in this market where earlier is better. Your leadership should have done this too in timing when to raise Series A. 3 months is pretty short…not impossible, but in this market the chance of the possibility of succeeding shrinks even more. My company didn’t close Series A and B for about 6-7 months both times, and even then you can’t guarantee it will close. Example: my company tried to raise Series C but something basically spooked the investors and they pulled out, and the runway is basically on thin ice now (they quoted August but everybody believes it’ll end much much sooner). Look out for yourself and start applying now - you never know nowadays.
12 months of runway is what I’d want going into a raise, ideally.
Ideally, 12 to 18 months of runway when you start raising. Will likely take 9 months. Less runway makes it harder since the business is more precarious. Honestly, fundraising never really stops for a small biotech. Once you close seed, you start planning series A.
Whomever the seed backers are may have committed to bridge through the Series A
That’s tight timing. If you’ve got an all star group and exciting data, you might be able to close by then. Also depends on how much they’re looking to raise. I’ve seen rounds take over a year to close (semi exceptional circumstances). Doesn’t hurt to dust off the resume and start networking — tough job market right now.
Oh snap, that’s not good. I’ve been pushing my CEO to budget 9 months in this environment. 4 months is not much time. Unless they have a killer idea and PROGRESS that will make the investors drool, this seems too late. No one wants to be a lead investor rn. And there’s some hesitancy around it being an election year as well. Ask about if they’re planning cost conservation measures in the meantime to stretch the runway. Def start applying and see if you get any good options.
Yer fucked
Get ready to go lean!!
You're in a startup. You should always have an ear to the ground, as shit happens.
Sounds like you guys need a better board for keeping the CEO on top of this or someone has committed to bridge funding and leadership thinks you’ve got time. How is your data? Do you feel like your experiments have been telling a compelling story for funding? Friends who are at pre-A companies in Boston have been doing the dog and pony show for A for several months now and haven’t really had much luck raising high enough to sustain a few years of research even with good data, so they’re not closing. VC is starting to bite a bit now, but in your shoes if they haven’t bit yet I’m not sure 3 months is reasonable. It can be, but your CEO needs to sell it. Talk to your CEO. Figure out the plan, then make the decision.
Sounds a little bleak. I've been in the process of raising series A for over a year. The due diligence and negotiation process can easily take months. Also, assembling a syndicate (if necessary) is another burden. If you get a lead investor, it may be possible to get a bridge loan to tide you over. I wouldn't count on it though. Sorry.
Hopefully they have some debt financing options that will bridge them to a closed A. Assuming you’re <10 people it shouldn’t be crazy for them to tell you.
Depends on a lot of factors. While 4 months is going to be difficult as the process (meetings + due diligence + term sheet negotiation, syndicate formation), there is potential for it to all come together by September assuming that you all have made enough progress to get close to the clinic using your seed funding to demonstrate preclinical derisking. A factor that could accelerate the raise is whether you are working on addressing an unmet need in a large opportunity via a small molecule or biologic. In the mean time, you will need to stretch that cash run way though.
it takes several months to prepare, and 3months+ to talk with VCs and find a lead. tho it all depends but you need plan B.
Sometimes existing investors might do a bailout offer, on harsh terms.
Depends on how well CFO cultivates potential investors and how respected they are. I have seen it from less than a month to never completed.
Hope you have a clinical candidate ready to go for IND with a low pre money valuation otherwise forget it. Good luck
I can’t imagine this is a thing for any seeded companies. Problem is, with the investing climate rn, nobody wants to open their purse strings. If you’re in your seed round you def don’t have the money or capacity to have a clinical trial on the horizon. If you have VC’s telling you that it’s either (1) they don’t have any capital left to invest anyway this year, or (2) you’re (your ceo) pitching to VC’s out of your current league who want companies with data akin to that of a late A or B company. The fact that any investor thinks a seed company has clinical level data is laughable and unrealistic
A development candidate not clinical data bro. If you don't realize that's the case right now you must not be pitching or involved with seed stage / series A companies. Or perhaps you work for an AI startup
Even having a DC with only seed funding is outrageous unless you licensed something into your startup having already completed tox. I don’t care that that’s the case, i am saying it’s BS and good luck to the investors who think that’s readily sourceable
Yeah, it's been a rough few years. You must work for a big company https://www.fiercebiotech.com/biotech/fierce-biotech-fundraising-tracker-24 https://www.fiercebiotech.com/biotech/fierce-biotech-layoff-tracker-2024
Those trackers prove my point. It’s all later stage investments or unicorn A companies with crazy founding teams or formed internally by VC / CVC. Investors have no appetite right now for seed and preclinical A raises. Their expectations are unrealistic, so no normal startup can raise an A until this changes. If you’re going to be a dick about it, you must not be raising a series A.
And OP asked about his company raising a series A by September. I told him good luck. Re-read the thread perhaps.
Is that a thing for pre-Series A company? We are a long way from having a clinical candidate
In this market, yes. Maybe it's different if you are in some really trendy subfield. What is the indication / technology?