While artificial intelligence dominated investor attention at JPMorgan Healthcare Conference 2025, a critical underlying question emerged: “Will investment capital finally shift from mid-cap and large-cap M&A toward emerging biotech innovations?” This question holds particular relevance for my organization, which disproportionately serves emerging biopharma and biotech companies.
The week commenced with major announcements from Johnson & Johnson and Boston Scientific, reinforcing that mid- and large-cap M&A continue to dominate. Throughout the week, I engaged with dozens of investors and biopharma/biotech executives, encountering remarkable innovations across wound care, immunology, cancer therapeutics, infectious diseases, drug delivery, and obesity treatments.
Where We Can Improve as an Industry
The most significant challenge identified involves a critical communication gap that must be addressed if emerging healthcare companies are to access substantial funding.
The Information Disconnect
Early-stage venture investors targeting $1M–$20M raises possess considerable dry powder and genuinely want to invest, yet a substantial mismatch exists between available opportunities and investor expectations.
What Investors Need
-
Lead Investors: “Other investors should take the lead—I will happily follow” reflects investors’ hesitation to independently evaluate opportunities.
-
Market Clarity: Clear messaging regarding defined revenue pathways—including sales projections, licensure timelines, and reimbursement strategies—proves essential for securing funding.
-
Capital Allocation: Detailed explanations of fund necessity and specific deployment strategies to achieve stated objectives are required.
Where Executives Fall Short
Bio executives typically demonstrate confidence in their innovations but sometimes misinterpret investor feedback regarding investment hesitation.
-
Investor Interpretation Challenge: When investors claim sufficient funding but require a lead investor, executives often fail to recognize that investors typically need additional information, expertise, or risk distribution through co-investment arrangements.
-
Market Definition Deficiency: Executives frequently emphasize scientific validation and disease-treatment mechanisms while neglecting to articulate addressable market size, regulatory data requirements, approval timelines, and commercialization strategies aligned with requested funding.
-
Financial Planning Inadequacy: While executives detail study-phase funding requirements, they often lack granular financial projections including pro-forma income statements, balance sheets, and headcount growth justifications.
“Investors need to hear less about miracle treatments or a cure. Investors know that often the first innovator does not win the market. Funding is secured through a comprehensive execution plan that can adapt to the realities of the market.”
A recurring problem: startup companies fail to properly segment addressable markets, preventing effective communication about realistic market capture strategies. Investors dismiss claims of capturing one percent of a $100 billion market as unrealistic.