The rapid demise of Silicon Valley Bank put an unwelcome spotlight on the financial position of many small biotechnology companies that relied on the storied lender.
But to the people who form and build startups, SVB’s collapse is a sidebar to a longer-brewing threat: a tightening cash crunch for a generation of young drugmakers.
Over the last two years, a market downturn has made venture firms more wary, posing a challenge for the biotech startups that raised Series A funding in 2021. As they come back for their second major financing round, companies are having to get creative to secure new investment. Some are topping off existing funding rounds, while others are budging on their valuation to pull in fresh capital.
