Strategic guidance for technical founders in biotech
Hey {{first_name|default:there}},
It’s Vadim - last week was the first Bio Founder GPS, and let me just say, I’ve been so grateful for all of your comments and positive feedback!
In case you're new here - welcome! 👋
Here are two resources that could be helpful as you're building:
Database of biotech conferences and events in Q4 2025, plus a custom CRM & event tracker to manage your networking pipeline. Many of the conferences repeat, so bookmark this for next year!
Mega prompt to tailor your pitch deck to different investor types - from family offices to corporate venture and institutional VCs
Here’s what we’ll cover in today’s issue:
How to know when you SHOULD be raising, or when you still have work to do
How to validate your idea for the price of a coffee before you ever pitch
How to position yourself for the most leverage with investors - even if you’re pre-revenue, pre-PMF and pre-team
And more!
Let’s dive in!
FOUNDER STORY
Why investor interest ≠ a sustainable business
As someone who helps founders raise capital, I find that in 9 out of 10 conversations, I actually end up talking founders OUT of fundraising.
Sounds backwards, right?
Here is an example: Three weeks ago, Patrick reached out asking if I could help him secure pre-seed funding.
Patrick is building a sleep mask with neurostimulation technology based on his post-doc work.
And unlike many founders that are still purely in the lab, Patrick has a working prototype, a small team, and even early conversations with a few hospital systems.
Time to raise, right?
"I need funding to hire a product team and build v1 for customers," he explained.
Fair enough. So I asked Patrick a series of questions I’ve seen most investors ask consumer-facing start-ups:
How big is your email list of potential customers?
Do you have any pre-sales?
Are you getting early advocates that align with your “Why” and the problem you’re solving?
Patrick’s response was as natural as it was telling.
"Well, we're raising our pre-seed funding so that we can validate customer demand. We'd need to build a product first, right?"
This logic is something I hear constantly from technical founders. And it reveals two fundamental assumptions we've all been conditioned to believe:
Investor interest = validation of your business idea, your technology, and even your identity as an entrepreneur
"If you build it, they will come" - meaning you need a finished product before you can get customers
Here's the problem: #1 has never been true.
And #2? In 2025, it's being completely flipped on its head.
The old playbook (what we learned in academia) was: Technology → Product → Distribution
Develop breakthrough science, build a product around it, then figure out how to reach customers.
But here is what actually works in 2025: Distribution → Product → Technology
Prove people want it, build what they'll buy, then iterate and improve the underlying science.
Here's what this means in practice:
Find a small group of people with the problem you're solving
Talk to them - understand what solution they'd actually pay for
Get soft commitments: email signups, pre-orders at early-bird pricing
Then build the product based on what they told you
Validate the technology solves their specific problem
Iterate and improve based on real feedback
The fundamental shift: Before investors validate your technology, they want to validate your distribution. They want proof that humans outside your company walls will open their wallets for what you're building.
Now, here's the thing: At the pre-seed level, you can find investors who'll back you on background and technology alone. Some will.
But someone still pays for that customer discovery and validation work. And by raising too early, you end up paying for it in equity.
Think about it from an investor's perspective. Which founder has more leverage?
Founder A: "Here's novel tech I developed in my post-doc with wide range of applications"
Founder B: "Here's tech I developed to solve Problem X. I've got 3,000 people on my email list who are early advocates. I've got $10K in pre-orders. And here's what I learned from 100+ customer conversations about their sleep struggles."
Which one do you think has an easier time raising? Which one gets better terms?
Here's what VCs actually look for: They want proof points. Specific, measurable evidence that de-risks their investment. Not just your scientific credentials or your technology - but concrete proof that customers exist, care about the problem, and will pay for your solution.
So if you're in Patrick's position - or honestly, in any position where you're thinking about raising - let me show you the 5 specific proof points investors look for and how to build them in the cheapest, fastest way possible.
FRAMEWORK
The 5 Proof Points: When You're Actually Ready to Raise
Here's the real question: When IS the right time to raise?
Most founders think they need money to figure out if people want their product.
Here’s the good news: In 2025, this works the other way around and can be used to your benefit as a founder.
So, here are the 5 proof points investors look for before they'll write you a check.
Each one builds on the last, and each one de-risks their investment.
PROOF POINT #1: Problem Validation (Beginner)
What investors want to see: Do people REALLY have this problem, and do they care enough to pay for a solution?
You've proven this when:
✅ You've had 50+ conversations with people who have this problem
✅ You can describe their pain in their exact words
✅ You've quantified what this problem costs them (time, money, quality of life)
✅ They're currently trying to solve it (even with imperfect solutions)
Red flags for investors:
❌ You're assuming the problem based on personal experience only
❌ "People probably struggle with this"
❌ You've only talked to friends & family who are being supportive
For Patrick: Be careful not to assume poor sleep is a universal problem worth solving. Talk to 100+ people who struggle with sleep. Ask:
What have you tried?
How much have you spent on solutions?
What's still not working?
If something worked, what would it be worth to you?
Time/Cost: 2-4 weeks, $0 (just your time and a calendar)
Why investors care: They won't believe in your solution if you can't prove the problem is real, expensive, and unsolved. This is table stakes.
PROOF POINT #2: Solution Interest (Beginner)
What investors want to see: Would people actually want YOUR specific approach to solve it?
You've proven this when:
✅ You have 500+ people on an email list who want updates
✅ Engagement rate is 30%+ (people are opening emails and clicking)
✅ You're getting inbound interest weekly
✅ People are asking "when can I buy this?"
Red flags for investors:
❌ No audience, no early advocates
❌ Your only followers are friends and family
❌ "We'll build the audience after we have a product"
For Patrick: Build a simple landing page that explains:
The sleep problem (using language from Proof Point #1 conversations)
Your approach to solving it
Why it's different from existing solutions
Email signup for early access
Optional: Run $1-2K in targeted ads to people with sleep issues (Facebook/Instagram targeting insomnia, sleep trackers, sleep apnea communities).
Goal: 500+ email signups with 30%+ open rates on your updates.
Time/Cost: 4-6 weeks, free to $1-2K
Why investors care: An email list is proof that real people - not just you - think your approach is interesting. It shows early distribution traction.
PROOF POINT #3: Founder Credibility (Intermediate)
What investors want to see: Can you demonstrate you're the right person to build this business?
You've proven this when:
✅ Public presence showing expertise in the problem/solution
✅ 500+ engaged followers who know what you're building
✅ Weekly content about your journey, learnings, and progress
✅ Inbound interest from potential customers, partners, or investors
Red flags for investors:
❌ Zero online presence
❌ No one knows you're working on this
❌ Invisible on the platforms where your customers hang out
For Patrick: Start posting on LinkedIn weekly:
Sleep science insights and research
Behind-the-scenes prototype development
Customer interview learnings
Pre-order campaign updates
Why this problem matters
Goal: Build to 500+ followers who engage with content (likes, comments, shares).
Time/Cost: Ongoing (start now, continue forever), $0
Why investors care: Investors back founders, not just ideas. They need to see you can build an audience, communicate effectively, and attract attention. This is also how you'll recruit team members, advisors, and early customers.
PROOF POINT #4: Willingness to Pay (Intermediate)
What investors want to see: Will people put money down before the product even exists?
You've proven this when:
✅ $1K+ in pre-orders or committed revenue (closer to $10K+ is amazing)
✅ 50+ individuals willing to pay $100-500 each (the more the better)
✅ OR 3-5 B2B customers with LOIs showing financial commitment
✅ People are paying, not just saying they're interested
Red flags for investors:
❌ Only "this looks promising" feedback
❌ People say they'd buy it but won't commit money
❌ You haven't tried to sell it yet
For Patrick: Launch a pre-order campaign:
Kickstarter/Indiegogo (if consumer-focused)
Or direct pre-orders on your site with clear delivery timeline
Price it at $200-300 (50% off early-bird pricing)
Offer full refund if the customers change their mind before product is ready, or if product never reaches production (eliminate all risk for early buyers)
Goal: 50-100 pre-orders = $10-30K committed
Alternative for B2B: Get 3-5 sleep clinics to sign LOIs:
"We'll purchase 10 units at $X per unit when available"
"We'll run a 3-month pilot with 20 patients"
Something with real dollars attached
Time/Cost: 4-8 weeks, $3-5K (campaign setup, ads, landing page optimization)
Why investors care: This is the big one. Money talks. Everything else is just conversation. Investors want to see people voting with their wallets. This proof point alone can 3x your valuation.
Real talk: This is where most founders stop. They think, "I'll get pre-orders after I raise money to build it properly."
Wrong. Get pre-orders first. Use that money (and the social proof) to raise better terms and to fund your early prototype development.
PROOF POINT #5: Path to Scale (Advanced)
What investors want to see: Do you understand how you'll scale beyond your initial customers, and have you started validating that path?
The key insight: Your path to scale depends on your business model. Investors want to see you've identified YOUR specific scalability lever and have early proof it can work.
Choose the path that matches your business model:
Path A: Strategic Partnerships (for B2B, licensing, co-development)
You've proven this when:
✅ 2-3 signed LOIs from pharma partners, hospital systems, or research institutions
✅ Active discussions with corporate development teams
✅ Pilot program commitments or beta testing agreements
✅ Clear partnership deal structure identified (licensing, co-development, distribution)
For Patrick (if going B2B): Target sleep clinics, hospital systems, or medical device companies who could pilot, license, or acquire his technology.
Path B: Scalable Customer Acquisition (for DTC, prosumer, or self-serve B2B)
You've proven this when:
✅ You've tested 3+ customer acquisition channels
✅ You know your cost-per-acquisition (CPA) for at least one channel
✅ At least one channel has profitable acquisition of email sign-ups and purchases
✅ You can articulate which channel scales and why
For Patrick (if going DTC): Test Instagram/Facebook ads, Reddit communities, sleep influencer partnerships, or content marketing to find a repeatable acquisition channel.
Path C: Hybrid Approach (DTC to validate, then scale through partnerships)
You've proven this when:
✅ You've acquired 100-500 direct customers to prove demand
✅ You're using that traction to open partnership conversations
✅ Strategic partners see your DTC success as proof of market interest
✅ You can articulate the economics of both paths
For Patrick (if hybrid): Start with DTC pre-orders to prove demand ($20-30K), then use that data to approach corporate wellness programs or employer benefits platforms.
Red flags for investors (regardless of path):
❌ "We'll figure out how to scale later"
❌ No clear plan for going from 10 customers to 1,000 customers
❌ Haven't thought about who your scale partners could be OR haven't tested any acquisition channels
❌ Trying to do everything at once without clarity on primary path
Time/Cost: 8-12 weeks, $0-5K (depending on your chosen path)
Why investors care: Investors need to see you understand how you'll scale beyond hustle and personal network. Early customers are great, but they want to know how you get to thousands of customers. Whether that's through partnerships that give you instant access to large markets OR through proven acquisition channels you can pour money into, you need to show your path to scale is more than hope.
How to choose your path:
High Average Sales Price (ASP), complex sales, regulated → Strategic Partnerships
Lower ASP, self-serve, consumer-facing → Scalable Acquisition
Validating product-market fit first → Hybrid (DTC then partnerships)
Patrick's decision: If his sleep mask is $300-500 retail, he might start DTC to prove demand, then use that data to approach corporate wellness programs at companies like Google, Amazon, or consulting firms with high-stress employee populations. That's a hybrid approach.
TAKING STOCK
Which Proof Point are you at?
Here's what I recommend: Do an honest audit. How many of these five proof points have you actually built?
If you're sitting at 1-2 (usually technology + maybe some problem validation), you have two options:
Option 1: Build proof points first, then fundraise (3-6 months of validation work)
Recommended for most founders
Option 2: Fundraise now with just technology and credentials
Yes, some investors will back you on technology alone. But here's what that path actually costs you:
❌ More time fundraising, less time building
You'll need to talk to 3-5x more investors to find ones willing to bet early
Months spent validating investors instead of validating customers
❌ Worse terms and higher dilution
Expect to give up a higher % of your company
Less leverage = worse deal for you
❌ Loss of strategic control
Early investor likely gets a board seat
They'll have strong opinions on which opportunities you should pursue
You're now building for your investors, not your vision or customers
Unless they've built exactly your company serving exactly your customers, their advice may not lead to the best outcome
The trade-off:
Validation work may feel uncomfortable. It requires talking to strangers, asking for money before you have a product, putting yourself out there publicly.
But for $0-10K and 3-6 months of focused work, you can save yourself:
Substantial personal wealth from dilution
Years of your life
Strategic control of your company
Choose wisely.
BONUS RESOURCES
Let’s validate your start-up 🤓
You've learned the 5 Proof Points framework. Now let's see which ones you've actually built.
I built an AI assessment tool that does exactly this:
🤖 Interactive Validation Assessment (AI Mega-Prompt)
Paste it into ChatGPT or Claude, answer a few questions about your validation work, and get:
Brutally honest scoring across all 5 proof points
Prioritized gaps to address in the next 90 days
Week-by-week roadmap tailored to your situation
Realistic timeline for when you'll be fundraising-ready
THAT’S A WRAP!
Was this helpful?
I'd love to hear from you. Do you have a product/technology that’s consumer facing? Or are you focused on selling to enterprise or a more traditional sector like therapeutics?
Hit reply and let me know. I read every response.
Until next week!
- Vadim
PS: I know many of you are in traditional biotech sectors like therapeutics and might be thinking "this doesn't apply to me." But zoom out - the principles are very similar. Preclinical data vs. pre-orders. KOL endorsements vs. email lists. Pilot studies vs. beta customers. The proof points just look a bit different.
Would it be helpful if I created a therapeutics-specific version of this framework? Or for diagnostics, medical devices, or research tools? Reply and let me know which sector would be most useful!