No Takers? My answers then...Do you agree with me?
1. How much runway is actually enough?
Twelve months of cash doesn’t always mean twelve months of runway.
Clinical timelines slip. Experiments need repeating. Manufacturing takes longer than expected. Regulators ask another question. And the next raise nearly always takes longer than everyone hopes.
For most biotechs, I’d be much more comfortable seeing 18–24 months of cash, particularly if there is an important clinical, regulatory or manufacturing milestone ahead.
The important question isn’t just:
“When do we run out of cash?”
It’s:
“What happens to our cash if the program slips by three or six months?”
You don’t need a huge financial model to answer that. But you do need to know the answer.
2. When do you start raising again?
Probably earlier than you think.
You might have just finished Series A and the last thing anyone wants to hear is, “great, now start thinking about Series B”.
But fundraising doesn’t have to mean immediately launching another process.
It means keeping investors warm, sharing progress and building relationships well before you actually need the money.
Ideally, you want to raise while you still have enough cash to make good decisions — not when everyone knows the clock is ticking.
Before going back to investors, you should be able to explain three things pretty simply:
what you’ve achieved since the last raise;
what risk you’ve taken out of the program; and
what the next lot of money actually gets you to.
That story is usually more important than the spreadsheet.
3. Where should you spend the next dollar?
This is where science and finance really need to work together.
The question shouldn’t be:
“How do we cut costs?”
It should be:
“What spending gives us the best chance of getting to the next meaningful milestone?”
That might be another experiment, clinical development, CMC work, regulatory work, manufacturing capability or a key hire.
The trick is being disciplined without becoming so tight that you slow down the program you’re trying to prove.
And permanent costs deserve a bit more thought than they sometimes get. A new employee isn’t just salary. It’s recruitment, systems, equipment, management time and an ongoing commitment.
Sometimes hiring is absolutely the right answer. Sometimes using a specialist, consultant or outsourced team for a while gives you much more flexibility.
4. How do you fund the gap without giving away the company?
For Australian biotechs, the R&D Tax Incentive is usually the first place to start.
Then there are grants, collaborations, licensing deals, milestone payments and, in the right circumstances, debt.
But they’re not all equal.
A grant is great once you have it. Until then, I wouldn’t build the survival plan around winning one.
Strategic collaborations can be particularly powerful because they can bring cash, capability and external validation at the same time.
And venture debt can work, but it’s still debt. It normally works best when you already have a strong balance sheet and a clear reason for using it.
The broader point is to think about your funding mix, not just your next equity round.
Every dollar you can bring in without issuing another chunk of the company can be valuable — provided you’re not giving away something strategically more important in return.
5. What financial infrastructure do you actually need at Series A?
You definitely don’t need to turn a Series A biotech into a big corporate finance department.
But at some point, spreadsheets and the bank balance stop being enough.
By Series A, I’d want the team to have a pretty clear handle on:
how much cash is actually available;
monthly burn;
committed spend with CROs, CMOs and other suppliers;
what each major program is expected to cost;
what has changed against budget;
how long the cash lasts; and
what happens if something slips.
You also need decent purchasing and payment controls, good records for R&D claims and grants, and board reporting that people can actually understand.
An ERP doesn’t need to arrive on day one.
Neither does a full-time CFO.
Often a good accountant or controller, backed by someone with experienced CFO capability, is plenty for quite a while.
The real test is pretty simple:
Can the founders, scientists and board quickly understand where the money is going, how long it lasts, what we’ve already committed to, and what happens if the science changes?
If the answer is no, the finance function probably needs to catch up.
The common thread across all five is that the valley of death isn’t just a funding problem.
It’s about keeping the science, the cash and the next major milestone lined up.
And in biotech, those three things don’t always move at the same speed.