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When less is more

An analysis of recent returns from venture-backed biotech firms reveals that companies receiving the most financing do not necessarily deliver the best returns.

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Figure 1: Biotech financing trends.
Figure 2: Biotech financing round sizes have increased.
Figure 3: Superior returns tend to correlate with capital efficiency.
Figure 4: Capital efficiency of a venture capital portfolio compared to mid-sized biopharma.


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The author would like to thank his colleagues at Atlas Venture for their advice and feedback, and in particular Kevin Clancy for his assistance with the article.

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Atlas Venture is an investment firm focused on early-stage biotech and the author has pecuniary interest in Atlas's success.

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Booth, B. When less is more. Nat Biotechnol 25, 853–857 (2007).

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