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Is it virtuous to be virtual? The VC viewpoint

Nature Biotechnology volume 27, pages 886–888 (2009)Cite this article

To the Editor:

A Commentary in the August issue by Bruce Booth1 highlights the importance of the virtual business model as an increasingly important facet of strategies for making biotech companies more capital efficient. In a previous study examining the portfolio companies of his venture capital (VC) firm, Booth also provided evidence that companies with fewer full-time employees are markedly more productive than peer companies with more employees2. Other venture industry insiders have also commented on the fact that investors are favoring companies that keep a “laser sharp focus,” and that “employ virtual and semi-virtual models to maximize cash efficiency”3. To characterize the present state and future potential of virtual biotech, we conducted semi-structured interviews with representatives from 25 leading life sciences VC firms and four leading contract research organizations (CROs).

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References

  1. Booth, B.L. Nat. Biotechnol. 27, 705–709 (2009).

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  2. Booth, B. Nat. Biotechnol. 25, 853–857 (2007).

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Acknowledgements

We would like to acknowledge the valuable comments of Z. Lynch, B. Booth, K. Perampaladas and H. Masum in shaping the overall study design and G. Williams for study data. This study was supported by New Enterprise Associates. J.C. is funded by a grant from the Bill and Melinda Gates Foundation through the Grand Challenges in Global Health initiative. We also graciously thank all the venture capital firms for participating in our qualitative and quantitative analysis.

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Authors and Affiliations

  1. McLaughlin-Rotman Centre for Global Health, University Health Network and University of Toronto, Toronto, Ontario, Canada

    Justin Chakma

  2. Scale Venture Partners, Foster City, California, USA

    Jeff L Calcagno

  3. New Enterprise Associates, Menlo Park, California, USA

    Ali Behbahani

  4. Innovative Neurotechnologies, Irvine, California, USA

    Shawn Mojtahedian

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  1. Justin Chakma
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  2. Jeff L Calcagno
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  3. Ali Behbahani
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  4. Shawn Mojtahedian
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Corresponding author

Correspondence to Justin Chakma.

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Competing interests

New Enterprise Associates and Scale Venture Partners are investment firms that invest in biotech companies and biotech and A.B. and J.L.C. have a pecuniary interest in the success of their respective funds. Innovative Neurotechnologies is a virtual biotech startup and S.M. has a pecuniary interest in the success of that company.

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Chakma, J., Calcagno, J., Behbahani, A. et al. Is it virtuous to be virtual? The VC viewpoint. Nat Biotechnol 27, 886–888 (2009). https://doi.org/10.1038/nbt1009-886

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