The document outlines the typical life cycle of a biotech startup company from founding through maturity. It shows how founders and early investors are initially involved at the startup stage when intellectual property is developed. As the company progresses, it requires growth capital from venture institutions and corporations to advance drug candidates. This results in dilution of the founders' stake but increases the overall valuation. Later in maturity, the company may pursue public capital or be acquired by large pharmaceutical companies once proof of concept data is established and a pipeline of candidates is in development.

1. Biotech Start Up Life Cycle
Founders Growth Investors Large Pharma
• Technical Founders • Venture Institutions Acquired
• Universities/Academia • Corporate VCs
• Large Pharma • Hedge Funds
$ Acquisition
Intellectual Property
Growth Capital
Biotech Start Up Maturing Biotech
Capital
Start Up Capital Expertise
Contacts
Public Capital
Seed Investors Venture Investors Public Investors
Independent Public
• Family & Friends • Venture Institutions • Mutual Funds Biotech
• Angel Investors • Corporate VCs • Hedge Funds
• Government Grants
CONFIDENTIAL 1

2. Valuation/Dilution Cascade
+  Start Up
Founder Seed Investors Value = $3 Million
IP/Idea Seed Capital Founder: 33%
Value = $1 Million $2 Million Seed Investors: 67%
Capital spent to advance drug candidates
Start Up
Value = $24 Million
Start Up +  Founder: 13%
Seed Investors: 25%
Value = $9 Million Venture Investors
Venture Investors:
Founder: 33% Series A Capital
62%
Seed Investors: 67% $15 Million
Founders Stake has been diluted 100% to 13% in two rounds
BUT Value has increased $1 Million to >$3 Million
CONFIDENTIAL 2

3. Assets and Needs of Biotech Companies by
Stage
Concept/
Infancy Adolescence Maturity
Gestation
• Idea • Company founded • Growing company • POC data
• Some relevant • Idea advancing • Idea/intellectual • Growing pipeline
technical/manageme • Clear development/ property progressing • Lead candidates in
nt expertise
Assets
implementation plan • Clinical data Phase 2/3
• Seed capital in place • Supportive VC • Corporate
investor base organization with
strong management
• Capital • Capital to fund • Capital to fund later • Even more capital
• Structure advancing programs stage/larger trials • Liquidity for founders
• Management • Governance • Proof of concept data and VC investors
Needs
• Entrepreneurial • Additional expertise
expertise
• Contacts
• Structure
CONFIDENTIAL 3