Biotechnology companies are frequent issuers under the Regulation D program. Biotech offerings tend to be executed for earlier stage companies and are usually equity based offerings. Convertible preferred equity is a favored structure with biotech operators although the development and approval lead time for products means little revenue generation in early years so preference returns are typically paid later in the investment term.
Challenges for these offerings are related to forward execution risks for product development and related government approvals. The prospectus development can also be challenging as the prospectus should allow the average potential investor the capability to fully understand the company’s planned operations. Highly technical data and verbiage thus needs to be reformatted and explained properly so investors without biotechnology backgrounds can understand the concepts and the relevant forward plans of the company.
Friday May 22, 2015
Category: Capital Formation and Regulation D
Interested in learning more about our services?
Continue reading or call us at 720-586-8610