Cherry Bekaert: 15–30% startups commercialize

Biotech startups live on scientific time, but investors live on fund-return time. That mismatch is the whole story here. Cherry Bekaert’s recent guidance to life-sciences founders basically says the old habit of “build the science first, figure out the exit later” no longer works very well — especially in markets where commercialization takes years and public investors have gotten pickier. ### What did Cherry Bekaert actually say? The firm framed a life-sciences company as moving through four stages — discovery, development, commercialization, and exit — and treated the last two as things founders need to plan for much earlier than they often do. In a separate piece focused on “expand and exit” strategy, it argued that founders should think deliberately about whether the likely endpoint is an IPO, an acquisition, a licensing deal, or another strategic transaction, then build the company so that path is plausible. ### Where does the 15–30% figure fit? The number matters because it captures how narrow the funnel is. Cherry Bekaert says historically only about 15–30% of life-sciences startups make it to commercialization. That does not mean the science was worthless. It means a lot of companies run out of money, hit regulatory delays, miss manufacturing scale-up, or never line up a product and business model tightly enough to get all the way through. ### Why is commercialization the hard part? Because “the product works in the lab” is not the same as “the company can sell it at scale.” Life-sciences startups have to survive clinical or technical validation, regulatory review, reimbursement or pricing pressure, manufacturing buildout, and go-to-market execution. Each step takes cash. Each step takes time. And each delay pushes the company further into the period when investors start asking whether this becomes a real business or just a perpetual R&D project. ### Why talk about exits so early? Because the exit path changes what milestones matter. A company aiming for acquisition needs to know what a buyer would pay for — maybe a validated platform, maybe a Phase 2 asset, maybe manufacturing proof. A company aiming for IPO needs a story public investors will fund, which lately has meant stronger data and a clearer path to market than during the 2020–2021 biotech boom. Early-stage issuers could go public on thinner evidence back then; by late 2025, the bar had shifted toward later-stage, more derisked assets. ### Why does that hit synthetic biology especially hard? Synthetic biology often sits in the awkward middle ground between software-style ambition and biotech-style timelines. The promise is huge — programmable biology, new materials, new therapeutics, better manufacturing — but the commercialization path can involve long development cycles, specialized infrastructure, and messy scale-up. That means founders need to show not just technical novelty but a believable route to revenue, partnerships, or acquisition before patience runs out. ### Isn’t the funding market getting better? A bit — but unevenly. Biopharma deal value rose to $191 billion in 2024 even as overall deal volume fell from about 4,900 in 2020 to roughly 3,200 in 2023, which tells you capital is getting more selective, not simply disappearing. In 2025, industry watchers still described a constrained market with tougher access to capital and more pressure to focus on fundamentals. Basically, money is available, but it is clustering around programs that look more mature and more commercially legible. ### So what should founders take from this? The real message is not “give up on hard science.” It is “design the company around a financeable sequence of proof points.” If only a minority of startups reach commercialization, then every milestone has to do double duty — reducing technical risk and making the company more attractive to acquirers, partners, or public investors. That is the shift Cherry Bekaert is trying to force into the conversation. ### Bottom line? The 15–30% figure is less a prediction than a warning label. In life sciences — and especially in synthetic biology — good science is necessary, but the companies that survive are the ones that treat commercialization and exit strategy as part of product design from the start.