I have been investing personal capital in FDA-regulated biotechnology for thirty years through Hillman Ventures. In that time I have watched many programs succeed and many fail. The failures are more instructive than the successes because the failures have a pattern. The successes have whatever it is that makes the team or the science or the timing right. The pattern of failure is the pattern of structural mismatch between the capital and the regulatory reality.
The pattern.
A founder builds a biotech program with what looks like the right science. The science attracts attention from venture capital. The venture capital comes in at a valuation that makes the deal economics work for the fund. The deal economics assume a particular exit timeline. The exit timeline does not match the FDA regulatory timeline.
The program proceeds along two parallel tracks. The science track moves at the speed of biology and regulatory review. The capital track moves at the speed of the fund's deployment and distribution schedule. The two tracks diverge slowly at first and then quickly.
By the time the program is at Phase 2 readout, the capital track is demanding either a sale, a public offering, or a downround that would crater the cap table. The science track is producing data that is consistent with the original thesis but not yet at the level that supports the valuation the fund needs at exit.
The board decides. The decision is almost always to sell. The acquirer captures the value the original investors thought they were buying. The founders walk away with a fraction of what they built.
Five programs. Same outcome.
I have watched this happen five times in the last fifteen years to programs I knew well. Each time the science was actually good. Each time the team was capable. Each time the failure was structural. The capital structure did not match the regulatory reality.
The five programs spanned different therapeutic areas, different geographies, different investor combinations, and different management teams. The pattern was the same.
The diagnostic question.
For any founder reading this at the early stage, the diagnostic is two questions.
What is the regulatory timeline for your asset to reach BLA approval? Not your hope. Not your pitch deck. The honest timeline. Most BLA programs take ten to fifteen years from company founding to approval.
What is the fund life of the capital you are taking? A typical venture fund has a ten-year life. If you took capital from a fund in year three of its life, the fund needs liquidity from your company in year seven from your founding. That is almost certainly before your BLA approval.
The mismatch between those two timelines is the structural source of program failure.
Four solutions.
Take capital from a fund early enough in the fund's life that the fund's timeline works for you. This is hard. Most funds are deploying capital across years one through four of their life.
Take capital from a family office or a strategic with no fund clock. This is the path Hillman Ventures was built around. Family office capital can hold the position through the full regulatory cycle without forced liquidity.
Structure the deal so the fund's exit pressure is mitigated by built-in liquidity events. Milestone-based secondary sales. Partnership deals with upfront cash. PIPE financings tied to specific FDA decisions.
Accept the timeline mismatch and plan for it. Some founders accept they will sell at Phase 2 because the fund needs liquidity. They build the company to be an attractive Phase 2 acquisition target.
The wrong mental model.
Most founders go in with the wrong mental model. They think the fund will support them through the full regulatory cycle. The fund will not. The fund's mechanics will not let it. The fund's mechanics dictate the outcome regardless of what the fund manager personally wants.
I write about this because the pattern is preventable. Every founder who has read this and is at the early stage can choose the structure that fits their program. Most will still default to venture because venture is what they know. That is fine if the program timeline is short enough. It is not fine if the program timeline is ten to fifteen years that a BLA approval requires.
The match between capital structure and regulatory timeline is the central design question for any biotech founder thinking about who to take money from.
The five programs I watched die were preventable. The founders did not know what they did not know. You do now.