Investments in Biotech, Article Review Example

The most important aspect of the article is indicating to the reader that it is nearly impossible to begin a biotechnology company without some sort of investment. Since equipment in the industry is typically expensive, and salaries are high, there is need for investment and planning strategies in addition to the need for federal and private grants to be received once the company is operational. After reading the article, it appeared that it is in the best interest of new business owners to market their company in a manner that appears to investors that risk will be minimized.

It is also the responsibility of the business owner to ensure that the science applied within the company is sound and as risk adverse as possible. Since investors typically contribute money to a company because they trust the individual, rather than the idea that he or she is presenting, it is important for the investor to seem intelligent and capable, so that if the initial science is faulty, he or she is able to develop a new idea that would bring in profit.

Ultimately, it is essential for individuals that wish to create their own biotechnology company to look to a variety of sources when they search for their initial funding. As explained in the PowerPoint presentation, it is necessary to look to both internal and external funding sources. Examples of internal funding sources include corporate research labs, modifications or improvements upon already existing products, and corporate research institutes. Examples of external funding sources include partnerships with other companies, government laboratories, and academic research laboratories.

In the pharmaceutical industry, for example, many private companies partner with academic research institutions in order to benefit from the resources they have. In many of these situations, pharmaceuticals are developed by private companies, which are then brought to hospitals and research facilities to enact clinical trials. Many biotechnology companies do not have the recruitment base or patient population available in order to conduct these trials independently of other institutions. Therefore, they must rely on these partnerships in order to survive.

It is also beneficial for the biotechnology company to consider that it takes many years to start receiving a return on investment. The article explains that the return on investment typically occurs after five years and that it may be more profitable to sell the company than to continue building. However, it is necessary to calculate these projections in advance to ensure that the business owner is able to make a sufficient profit regardless of the particular decision that is made.

Once a company has been initially established, it is easier to raise funds. This is primarily because established companies have a greater edge on the stock market, and investors will contribute funds to them in this manner. Occasionally however, this is not worthwhile, as it will alter the proportion of the company that the owners have control over. Deciding to start publicly trading company shares may therefore be a useful decision for those who would not be able to fund their company otherwise, but may be detrimental for those who would be able to support their business using other investments.

In conclusion, the decisions a biotechnology business owner must make are complex and are dependent upon the particular individual starting the company. In addition to his or her networks or talents must be considered. There are many different ways that these companies can be funded, and each path of success is individualized.