Talent: the key to biotech value creation
Everyone’s happy to talk about how important talent is to tech and life sciences companies but when it comes to valuation the financial community looks at IP, cash or revenues then adds on a mystery value for the enterprise. Why is this when the true ‘enterprise’ value really equals IP + people?
The truth is that people are hard to value, but we do many harder things in life so…let’s flip the idea of company equity and consider TALENT EQUITY: the people-assets that make a company greater than its competitors and a great investment.
Without exceptional leadership talent the value of biotech IP is unrealisable. Some may see this as controversial but our latest research and our knowledge of the investor community leaves us in no doubt. Great assets do NOT “sell themselves” and average assets can be made great by good people. We all know examples at both ends of the scale and it would probably be libellous of me to give you examples.
Valuation of IP is familiar to every investor in the biotech sector and careful Due Diligence is essential before putting money at risk. Because of the vital importance of people to that success we believe the same professional due diligence is necessary when assessing biotech leaders and their teams. Because IP and talented people are two equal parts of the equation, without one you will struggle to make the most of the other.
The first of our new series of RSA Talent equity™ reports on the most successful EU biotech companies identifies the key traits of the CEOs who drive biotech success and profiles ten CEOs and the top 25 VC initiated biotech companies from the last 10 years.
Using data from EvaluatePharma and other industry sources, we analysed 551 venture-backed biotech companies and their strategic transactions, including 3,105 licensing deals, 178 IPOs and 629 M&A transactions. We applied objective performance measurement criteria, our own talent expertise and industry knowledge to vet the selection of the top CEOs.
How can this report help the biotech industry?
As a talent advisory firm, our advice is based upon our in-depth knowledge of what ‘good’ looks like. The research we are publishing in our report is the tip of the iceberg of our knowledge about this sector, and the traits that make people successful within it. When it comes to searching for the right executive for your firm, or to valuing an investment, nothing is more important.
If you want to know more about our analysis, or about how successful people drive successful companies, talk with us.
Our RSA Talent equity report is the first of an on-going, evidence-based series of reports about the life sciences sector. Further reports will offer insight into many different sectors of the life sciences on an international basis.