Secondary Directs: Tonic for the Biotech Venture Financing Model?
This article was originally published in Start Up
Executive Summary
With the biotech VC model battered by miserable public markets on the one hand and too-few M&A exits on the other, some firms with adequate resources are looking to lower their total investment cost by buying, at big discounts, portfolio assets from other investors. But secondary investing is a very different game. Because the model and returns are so different, most VCs still say they're likely to avoid secondary direct investing - but given the longer-term problems of the VC model, some may begin to adopt it as a short-term tactic.