The ambition must be a triple win – for investors, founders, and society

Innovation District Copenhagen is an excellent example of how new initiatives with political backing can help strengthen Denmark’s competitiveness within life science.

But new thinking is also needed in other areas if we are to realize the many ambitions for European biotech. The goal must be to unite different perspectives in the best possible way and to benefit investors, founders, and society alike – thereby achieving a triple win.

Overall, investors want a portfolio approach that reduces risk and preserves potential; founders want stable and less dilutive financing as well as access to expertise; and society wants initiatives that accelerate biomedical research towards commercialization.

However, there are still some challenges that need to be addressed.

From the capital side, small investments are uninteresting for institutional investors, and the one-technology-one-company model often limits the potential for synergies.

Investors face many layers of risk and complexity, and they struggle with valuations and long investment horizons. They also have concerns about portfolio diversification and limited opportunities for liquid exit.

Founders struggle with high capital intensity and continuous financing requirements. Constant fundraising dilutes their ownership, drains focus, and demotivates them. They often have limited access to specialized infrastructure and complementary technologies.

In addition, they face risks around personal financial involvement and challenges with talent recruitment.
Society is also under pressure. A lack of early-stage investment from institutional investors and insufficient infrastructure and scale-up opportunities lead to lost medical innovations and missed opportunities for new therapies, better health, and economic growth.

As part of Denmark’s EU Presidency, when a summit is held on October 8–9 with a focus on the life science sector in a European context, including broad stakeholder discussions on the EU’s strategy for life science and the upcoming Biotech Act, it would be appropriate to include perspectives from investors and founders.

This could take the form of political curiosity and openness toward structural initiatives that unite everyone’s interests, specifically looking at the conditions and prerequisites that make it more attractive for researchers to become founders, and for capital holders to become life science investors.

Examples of new thinking, not related to subsidies and support schemes, could include complementary investment platforms, alternative ownership structures, and differentiated governance models – not as alternatives to, but as supplements to, the existing life science ecosystem.

It is good that the summit agenda will, according to plan, focus on translational research, clinical trials, life science innovation ecosystems, implementation of innovative health solutions, and cross-disciplinary infrastructures for transformative life science R&D. But we also need to look at how life science innovation can be made more founder- and investor-friendly.

The risk of not considering new models and structures involving founders and investors is that, in the future, the generation, ownership, and utilization of biomedical data will be reserved for a few large, non-European players/companies, instead of a situation with more decentralized access and greater opportunity for knowledge exploitation.

Research, innovation, commercialization, scaling, and implementation within pharmaceuticals and biotechnology all begin with talented researchers making discoveries that, with the help of risky investments, may become new health solutions for the benefit of all.