How biotech companies can navigate the tough fundraising climate in 2025
- Ellie Gadd
- 1 day ago
- 4 min read
The good news? There’s still plenty of opportunity for companies that prepare well. Here’s what biotech startups need to know to attract investment in today’s market.
The European biotech sector has faced a tough few years. After a boom during the pandemic and early 2020s, funding levels have dropped sharply. In 2023, biotech investment across Europe fell to around €5.3 billion - the lowest level in five years - with early-stage funding declining by approximately 30%. While biotech startups secured €1.66 billion in funding in France, early-stage investments saw a notable decline.
This tightening has left many biotech startups wondering how to attract the capital they need to develop new therapies and technologies. But all is not lost. While the environment is challenging, companies that understand investor priorities and plan carefully can still succeed.
Find the right investors for your stage and sector
Not all investors are the same. Venture capital firms and corporate investors specialise in different stages, diseases, and funding sizes. Approaching the wrong ones wastes time and can hurt your credibility.
What investors want now: Even early-stage investors increasingly expect to see a clear plan for how your therapy will reach patients. This includes early commercial thinking - such as market positioning and pricing strategy.
What you can do: Research potential investors carefully. Target those who have funded similar technologies or companies at your development stage. Getting this fit right is crucial.
How 3Biotech can help: We perform targeted investor mapping and readiness assessments to align your funding strategy with the right VC or corporate venture capital funds - from pre-seed to Series C.
Be realistic about your valuation and funding terms
Startups sometimes present valuations that are too high, hoping to get the best deal. But investors prefer to negotiate based on progress, data, and market interest. Overvaluing too early can put investors off.
What investors want now: More funds are using milestone-based funding, where money is released in stages after you hit scientific, regulatory, or clinical goals. This reduces their risk and keeps you accountable.
What you can do: Break your fundraising into tranches linked to clear milestones. This shows you understand the development process and are focused on delivering results.
How 3Biotech can help: Through CMC-driven risk assessments and milestone validation, we help biotech companies justify their value with tangible scientific and technical evidence.
Build investor relationships early
Waiting until you urgently need cash to talk to investors is a common mistake. Investors like to see steady progress and build trust over time.
What investors want now: Founders who maintain regular communication and update their networks well before fundraising rounds.
What you can do: Start conversations early. At least 12 to 24 months before you plan to raise. Use these interactions to gather feedback and refine your pitch.
How 3Biotech can help: We support you in creating compelling technical narratives and data packages, enabling confident pre-engagement with global investors, particularly U.S.-based funds where competition is intense.
Focus on strategic capital, not just any capital
Crowdfunding or angel investments can seem attractive, but they often complicate governance and may not align with your long-term plans.
What investors want now: Clear cap tables and governance structures that support growth and exit strategies.
What you can do: Prioritise institutional investors who bring strategic value - including experience, networks, and aligned interests.
How 3Biotech can help: We assist with cap table preparation and investor engagement strategies that are built for scalability and future institutional interest, avoiding structural pitfalls.
Consider corporate VC and pharma partnerships
Big pharma and corporate venture capital arms can be excellent partners. They provide funding plus valuable scientific and regulatory expertise.
What investors want now: Proof your project fits with pharma R&D priorities and has solid CMC (Chemistry, Manufacturing, and Controls) data.
What you can do: Highlight how your science aligns with pharma strategies and ensure your manufacturing and quality data meet industry standards.
How 3Biotech can help: Our team connects biotech companies to strategic partners by highlighting robust, GMP-ready CMC packages and innovation that resonates with pharma R&D priorities.
Follow therapeutic trends, but don’t chase them blindly
Hot areas like immunology, radiopharma, and antibody drug conjugates are attracting attention, but hype is no substitute for solid data.
What investors want now: Platforms and technologies with broad potential, backed by reproducible, early-stage data.
What you can do: Strengthen your preclinical data packages. Clearly explain your drug’s mechanism and biomarkers to demonstrate scientific robustness.
How 3Biotech can help: We provide scientific differentiation by strengthening your preclinical or clinical data packages and helping articulate mechanisms of action and biomarker strategies.
Biotech fundraising to deliver results, not just to hit big numbers
More money isn’t always better. Investors favour companies that spend wisely and reach key clinical or regulatory milestones.
What investors want now: Lean, focused development plans with clear milestones.
What you can do: Align your budget and timelines with realistic clinical goals. Avoid overcapitalising and maintain operational discipline.
How 3Biotech can help: We streamline development plans to ensure phase-appropriate spending, optimizing CMC timelines, manufacturing scalability, and regulatory strategy.
Plan for international investment, but know the requirements
Cross-border funding, especially from U.S. investors, is growing. However, these investors expect local presence or clinical trials and regulatory alignment.
What investors want now: Clear regulatory pathways, presence in key markets, and compliance with local standards.
What you can do: Develop a regulatory and operational strategy that covers both Europe and the U.S. Early planning helps build investor confidence.
How 3Biotech can help: We craft CMC and regulatory strategies that bridge European and U.S. expectations, ensuring that your development plan is aligned with global standards from the outset.
Final thoughts
Fundraising in today’s biotech market is more demanding but still offers opportunities for those who prepare thoroughly. Investors want to back companies with strong science, clear milestones, and practical execution plans.
If you’re gearing up to raise capital, focus on building relationships early, targeting the right investors, and aligning your scientific and commercial stories. With the right preparation, you can navigate this challenging environment and secure the funding needed to bring innovative therapies to patients.
At 3Biotech, we guide our clients through every stage of the process of finding investors, from strategic preparation to investor alignment. Get in touch to learn more about how we can help.