California is known to be a hotbed for startups and for the last 2 decades, the state has been generating massive revenue through its business ecosystem. One notable sector that is constantly growing in California is Biotech. In 2023, it contributed a total of $414.2 billion to the state’s economy. This industry supports 1.24 million jobs and provides $128.6 billion in labor and sole proprietor income.
Moreover, California is filled with angel investors as well as venture capital firms who love investing in Biotech startups. According to California’s Governer Office Of Business and Development, the life science companies in California have seen over $23B in funding between the years of 2017-2019.
To know more about the investors who are funding biotech startups in California, here is a list of some of the top-ranked VC firms with some additional information.
The following list displays the top-ranked venture capital firms in California that are funding biotech startups. These firms have been arranged depending on their active involvement and the total number of startups funded.
Onto the list now!
Contact: kv@khoslaventures.com
Preferred Industries: Tech and Healthcare
Total Investments: 500+
Notable Investments: Imply and Mirvie
Khosla Ventures was founded in 2004 by Vinod Khosla (aka the co-founder of Sun Microsystems). The venture capital firm is headquartered in Menlo Park and invests in startups that are willing to take large risks.
The investors at Khosla Ventures do not invest in businesses that are afraid to confront problems. Rather they prefer startups that are willing to take risks, survive in the market, and can generate massive ROI by offering an innovative idea.
Moreover, Khosla Ventures focuses on disruptive and transformative technologies across various sectors including AI, climate, sustainability, enterprise, consumer, fintech, digital health, medtech, diagnostics, and frontier technology. Their average check starts from $500,000 and can range up to several million dollars.
Contact: info@versantventures.com
Preferred Industries: Healthcare and Life Sciences
Total Investments: 450+
Notable Investments: Nouscom, Firefly Bio, and, Tentarix Biotherapeutics
Versant Ventures is also an American VC firm that partners with talented entrepreneurs to build and fund breakthrough biotechnology companies globally. They operate across various sectors, including biotechnology, manufacturing, life sciences, oncology, industrials, impact investing, and pharmaceuticals.
Moreover, Versant Ventures makes private equity and debt financing investments at the early and later stages of a startup. The venture capital firm is known as one of the most active life science investors in California as they make 10-20 investments each year.
Versant Ventures also organizes many extra startup events like accelerators and networking events to help fresh business owners seek guidance from experienced entrepreneurs. Their investment range isn't mentioned on the website. However, most of their portfolio companies have secured an investment of around $5M.
Contact: LPRelations@nea.com
Preferred Industries: Innovative Software, Fintech, Cleantech, Healthtech, Biotech, life sciences, and digital.
Total Investments: 350+
Notable Investments: Patreon, MoneyTap, MasterClass, Coursera, Inkitt, Hyperion Therapeutics, Grid, DataBricks, Rapid Robotics, Upwork, Upstart, and Waymark
New Enterprise Associates (NEA) is a VC firm that was founded in 1974. The firm is known to be one of the oldest investors of biotech in America and they have always been passionate about growing the life sciences community. NEA’s team includes investors, entrepreneurs, operators, scientists, and researchers who help businesses create long-term partnerships.
New Enterprise Associates always invests in innovative startups. They have a motto about bringing a change in the life science sector and the majority of their portfolio companies are either dealing with a unique product or operating in low-competition areas.
Aside from the investment activities, NEA also arranges dozens of startup events like accelerators and growth programs. They help businesses find related investors and also provide workshops to startup leaders who are new to the community.
The investment range of NEA can range up to several million dollars.
Contact: DEALS@SOFINNOVA.COM
Preferred Industries: Healthcare and Life Sciences
Total Investments: 110
Notable Investments: Aiolos, AFYX, and, Alvine
Founded in 2003, Sofinnova Ventures is a famous American venture capital firm. The firm invests in biotech startups and currently has $2.2 Billion under management. Sofinnova Ventures has a network of around 20 investors who fund biotech startups at early and seed stages.
Moreover, the team of investors funds both private and public equity companies. They have taken more than 50 companies public and also have been involved in 29 merger and acquisition deals. During the screening tests, the investors prefer startups that are developing a unique product that will have a huge impact on the relative sector. They also have a preference for investing in startups that can at least generate 3-4% ROI.
The investment range of Sofinnova Ventures is around $2M.
Preferred Industries: biopharmaceuticals, drug delivery technologies, and life science instruments.
Notable Investments: Karius, Nouscomm, and Incyte
5 AM Ventures is a seed and early-stage venture capital firm that focuses on building next-generation life science companies. It was founded in 2002 by John Diekman and Andrew Schwab. The firm has offices in Menlo Park and Boston. Their investment strategy primarily targets private therapeutic companies, with an emphasis on Series A investments. The venture capital firm also invests in small and mid-cap public and later-stage private biotech and life science companies.
Aside from investment activities, 5 AM Ventures is well-known for arranging the biggest tech and healthcare startup accelerators. They have recently launched the 4:59 initiative which is a hands-on internal effort to discover, incubate, and fund breakthrough science.
The investment range of 5 AM Ventures is around $5M.
Contact: hello@canaan.com
Preferred Industries: Tech, enterprise, fintech, frontier tech, and life sciences
Notable Investments: Truveris, Reibus, and Grey Worlf Therapeutics
Canaan Partners is an early-stage venture capital firm that invests in people with visionary ideas. The firm has a team of around 20 investors who are actively investing in tech and healthcare-related businesses. Canaan Partners is headquartered in Menlo Park and has been operating for more than 4 decades.
When funding startups, the investors at Canaan Partners seek to invest in startups that are led by experienced leaders. Generally, Canaan Partners have a criterion of only investing in startups whose leaders have more than 5 years of related experience.
Similarly, Canaan Partners has been involved in 59 IPOs and has 134 M&As across their portfolio companies. It is an active life sciences investment firm with an average check size of around $4M.
Contact: takeda.ir.contact@takeda.com
Preferred Industries: Virtual First Care
Notable Investments: Amwell, aptihealth, Hermeus, and Highlight
Takeda Ventures is a corporate venture capital group that invests in promising Virtual First Care (V1C) companies. The group invests globally, with a focus on North America and Europe. Their interests range from established companies to those with a minimal viable product, ideally with early commercial traction.
The investors at Takeda Ventures seek technologies that efficiently drive value-based outcomes for patients. Startups must provide convenient experiences through their services at a scaleable cost. Takeda Ventres creates companies in various therapeutic areas that supply focused patient solutions using digital platforms.
The investment range of Takeda Ventures isn't mentioned on their website, but most of their portfolio companies have been funded around $2M.
Completing the list of some of California's top-ranked biotech venture capital firms, you must be thinking about how to pitch to these VC firms. Well, pitching to venture capital firms is quite different than pitching to angel investors.
To help you with some basics, here are some tips.
Understand the VC Firm: Research the firm’s investment focus, portfolio, and stage preferences (seed, early-stage, growth, etc.).
Know Your Audience: Create your pitch to the specific interests and backgrounds of the VCs you are meeting.
The pitch deck should be concise and easy to understand. Start with a great opening line that captures your attention. Then move to the company name, tagline and a brief pitch that describes relevant information.
A presentation is also one of the most important aspects when pitching to VC firms. The investors are focused on what you have to say and expect the presentation to be wrapped up within 10-15 minutes.
Keep your presentation attractive, be confident, add a short story, and remember to include statistics about how your startup can outperform its competitors.
In short, there are dozens of venture capital firms in California that invest in the Biotech sector. However, finding the right investor who matches your business ideologies is the place most startup leaders tend to struggle.
Regardless, the list of top 7 Biotech VC firms in California will help you find the most active and determined investors that can boost your startup. Just remember to do some individual research before you start applying for a pitch competition.
A: Venture capital firms are organized setups that aggregate capital from various investors and deploy it into startups at a larger scale, offering expertise and guidance.
In contrast, individual angel investors are private individuals who invest personal funds directly into startups, typically at an early stage, using a more personalized approach and hands-on involvement in the startup's growth.
A: Yes, many angel investors provide mentorship programs and financial support. They leverage their experience to offer strategic insights, assist in critical decision-making, and facilitate introductions to their network connections. This mentorship is pivotal for startups, aiding them in overcoming obstacles and expediting their growth trajectory.
A: To make a startup investible, focus on a scalable business model, a strong team, a well-defined market opportunity, and evidence of market validation.
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