Building a Biotech From Zero (Part 2 of 2): Investor Reality, Liquidity Myths & Founder Dynamics
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In Part 2, Ray and David continue their deep dive into the realities of early-stage biotech growth—moving into warrant coverage, investor upside, dilution, and the often-overlooked truth that early equity can be illiquid for years.
David breaks down liquidation waterfalls, down rounds, fiduciary duties, and what happens when a company approaches insolvency.
They close with a candid look at managing founder relationships, avoiding “dead equity,” and keeping the company aligned when the science, money, and people all collide.
- 01:43 Understanding Conversion Discounts
- 02:07 Negotiation Points and Valuation
- 03:11 Enterprise Value and Share Price
- 04:37 Impact on Founders' Equity
- 08:47 Capital Gains Tax Benefits
- 13:47 Liquidity and Exit Strategies
- 19:07 Investor Motivations and Risks
- 34:20 Board and Management Obligations
- 43:11 Ray's Retreat Overview
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