As VCs vertically integrate, some entrepreneurs are on the outside looking in

Gone are the days when most biotech companies began as an entrepreneur with an idea and some IP, knocking on the doors of any venture capitalist who’d listen. Instead, the biggest wheels of biotech VC have embraced what they call the “venture creation” model, in which new companies are incubated in-house and built from scratch.

As STAT’s Kate Sheridan reports, the idea has paid dividends for the Atlas Ventures and Flagship Pioneerings of the world. But in the zero-sum game of early-stage biotech investment, the popularity of venture creation has some external entrepreneurs feeling frozen out.

“I think there is a sense some people have that if you’re not in that [model], there is no other alternative to getting financing anymore,” Rosemary Reilly, a partner at the law firm WilmerHale, said at a panel discussion Wednesday.

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