Biotech Startup Budget & Projection Guide 2025: Complete Framework for Founders

This is a complete biotech startup budget & projection guide for 2025. From our insights at EDC, but also through a thorough review of the available information online, learn cost benchmarks, burn rate formulas, funding strategies, and expert frameworks. Includes free templates and actionable insights for founders.

Preface from me, the Author

I went deep down the biotech startup budgeting rabbit hole—first for one of my companies, then for several clients. Eventually, I pulled together everything I could find, so I wouldn’t have to start from scratch again. This guide curates the best resources I came across up to 2025, from VCs, consultants, and academic publications, plus the tools and frameworks we use at Experimental Designs Consulting (EDC) when supporting founders. If you’re just getting started, I hope this saves you time, energy, and at least a few headaches. Going in numerical order will walk you through the whole process to creating your first budget and projections, but there’s a table or content and a guide summary below in case you’re looking for something specific.

💡 Download the EDC Budget Template Pack to jump-start your own biotech founder financial planning. [Insert link]

Introduction: Why Biotech Budgeting Is Different in 2025
Before You Budget: Clarify Vision, Role & Company Structure
Biotech Startup Costs: Pre-Launch Budget Categories
Building your Budget Projections & Useful Benchmarks
Biotech Startup Hiring: Salary Ranges & Equity Guidelines
Strategic R&D Outsourcing: When to Build vs. Buy
Lab Equipment & Infrastructure: Maximizing Capital Efficiency
Building Your Scientific Advisory Board on a Budget
Funding Strategy: Balancing Dilutive and Non-Dilutive Capital
Financial Modeling, Company Valuation & Exit Planning for Biotech Startups
Biotech Budgeting Tools & Templates for 2025
Conclusion: Budgeting as a Strategic Leadership Tool
Frequently Asked Questions

This article is pretty detailed so here’s a TL;DR version and shortlist of everything: Biotech Startup Budget & Projection SHORTLIST Guide 2025

I. Introduction: Why Biotech Budgeting Is Different in 2025

Biotech startups operate in a financial environment unlike any other industry. Founders are usually facing years of product development before any revenue, navigating huge infrastructure costs, not to mention regulatory complexity, and milestone-driven fundraising cycles.

The 2025 biotech funding landscape presents both opportunities and challenges. While total biotech investments are projected to reach $546 billion globally (Global Biotechnology Industry Outlook – 2025), investors have only become more selective, focusing on de-risked assets and proven management teams, often describing later stage companies. This means your budget isn’t just a financial tool anymore, it’s a strategic document and visual that demonstrates capital efficiency and your startups milestone-driven thinking.

Referring back to biotech budgeting being different, it can’t just be about “growth at all costs.” like in some other verticals. Your going to need to be managing burn, extending runway and show how you’re hitting critical scientific and regulatory inflection points that create measurable value for your investors.

What’s Changed in 2025:

Leaner Start Requirements: Y Combinator data shows biotech companies can now launch with $0-$200K in initial capital; Y Combinator. “How to Start a Biotech Company on a Budget.” Y Combinator Blog.
Equipment-as-a-Service Growth: Increased development around lab equipment leasing and shared facilities continues to reduced upfront infrastructure costs by up to 40-60%, Beyond the Initial Price Tag: The Long-Term Value of Financing Refurbished Lab Equipment
AI-Driven Cost Optimization: Machine learning tools are helping founders predict and optimize R&D spend more accurately; Yoo, H.S., Jung, Y.L. & Jun, SP. Prediction of SMEs’ R&D performances by machine learning for project selection. Sci Rep 13, 7598 (2023). https://doi.org/10.1038/s41598-023-34684-w

You’ll find that this guide synthesizes insights from leading sources including Pillar VC, Excedr, Browne Consulting, ProjectionHub, Nature Biotechnology, Emory University, Kruze Consulting, and Y Combinator’s Biotech Library, plus real-world experience from EDC’s work with early-stage founders. We’re scientists at EDC, so you’ll find all sources linked at the bottom.

II. Before You Budget: Clarify Vision, Role & Company Structure

Your budget should reflect your company’s structure and leadership goals. Before diving into spreadsheets, ensure clarity on your role (CEO, CSO, or advisor), co-founder and team knowledge needs, and basic knowledge of legal elements like entity formation and structure (C-corp vs. LLC).

This article will focus on developing your budget, so there’s a few things we’ll assume you already know outlined in this pre-budget checklist.

Pre-Budget Readiness Checklist:

✅ Commercial potential assessment completed
✅ Freedom-to-operate (FTO) analysis conducted
✅ Leadership roles and knowledge gaps identified
✅ Company structure and IP licensing strategy defined
✅ Regulatory pathway mapped (510(k), BLA, NDA)

If you want a bit more information on the pre-budget items, Nature Biotechnology’s framework and Emory’s startup guide offer comprehensive walkthroughs for first-time founders. [Links in references]

III. Biotech Startup Costs: Pre-Launch Budget Categories

Understanding startup cost categories helps avoid under-budgeting and enables strategic timing of key decisions before fundraising. Founders consistently underestimate the capital needed to reach even the first milestone.

Cost Breakdown by Category

Category	Typical Range	2025 Notes
Incorporation & Legal	$10,000–$25,000	Include IP assignment, founder agreements
FTO & Market Analysis	$10,000–$60,000	Essential for investor due diligence
Lab Setup & Equipment	$150,000–$300,000+	Consider leasing to reduce upfront costs
IP Assignment & Licensing	$10,000–$50,000+	University licensing fees vary widely
Branding & Marketing	$10,000–$20,000	Website, pitch deck, conference presence
Initial Hiring	Variable	See compensation section below

IV. Building your Budget Projections & Useful Benchmarks. {#burn-rate}

Building a comprehensive startup budget requires working backward from your strategic vision to create a detailed roadmap of expenses that supports your development timeline.

Start with Crystal Clear Vision

Establish a precise understanding of what you’re building and where you’re headed. Your vision should be specific enough to guide every financial decision and define what success looks like at each stage.

Map Out ALL Major Startup Milestones

Document every significant milestone from inception to your target endpoint. Include regulatory approvals, key partnerships, market validation points, team scaling phases, and operational benchmarks. Each milestone needs a clear definition of success and realistic timeline.

Define Major Development Milestones

Drill down into specific development achievements that drive your business forward: prototype completion, clinical trial phases, beta testing, manufacturing scale-up, or technology validation. Focus on critical path items that could make or break your timeline.

Focus on Items Between Major Milestones

The real budget complexity lies between major milestones. Break down the work required to move from one milestone to the next, identifying all smaller deliverables and incremental progress markers. This granular analysis reveals hidden costs.

Map Out Costs in Strategic Order

Tackle cost estimation in this specific sequence:

Time Investment: Calculate duration for each phase, including active work time, waiting periods, review cycles, and iterations.

Outsourced Effort: Identify contracted work like specialized expertise, manufacturing, testing, or administrative functions.

Reagents & Consumables: For research/manufacturing businesses, calculate materials consumed, including waste factors and inventory buffers.

Equipment: Determine tools, instruments, software, and infrastructure needs, including maintenance and upgrades.

Staff: Calculate human resource needs based on workload defined above, including employees, contractors, and consultants.

Reverse Engineer Company Expenses

With development milestone costs defined, work backward to determine broader company expenses. Your operational overhead should support your development activities, not grow independently.

For biotech companies, price out these critical categories:

Legal expenses: IP strategy, regulatory compliance, FDA meetings, clinical agreements, and licensing deals aligned with your development timeline.

Accounting costs: R&D tax credits, grant compliance, milestone revenue recognition, and investor reporting.

Marketing expenses: Scientific publications, conference presence, market education, and commercial preparation scaling with development progress.

Lab operating expenses: Specialized waste disposal, environmental compliance, safety training, and regulatory inspections.

Company Operations and Administration: Lab space lease, equipment installation, biosafety requirements, expansion potential, utilities, insurance, IT infrastructure, facility maintenance, office supplies, and administrative software subscriptions.

HR and hiring: Specialized recruiting for scientific talent, compliance training, and higher biotech compensation levels.

This approach ensures company expenses directly serve development goals while keeping burn rate aligned with your development timeline.

Typical numbers:

Although it’s not always useful, if you want to compare what you’ve created against what is out there, try to calculate your burn rate, which represents the monthly cash your startup consumes. In biotech, the average burn rate is approximately $20,000 per employee per month.

Pillar VC’s Burn Rate Formula

Burn Rate Estimate = $20,000 × Team Size × Runway (months)

Example: 10 people × 18 months = $3.6M (+10-15% buffer)

You can also consider a typical breakdown to compare:

Typical Spend Breakdown (Survey Data)

Salaries: ~50%
R&D (reagents, CROs, etc.): ~25%
Rent, Legal, General & Administrative (G&A): ~20% (From Excedr: The legal and regulatory fees portion should account for 10-15% of total startup budgets)
Buffer/Contingency: ~5%

Sample Lab setup cost:

Total Investment: $250,000–$400,000

Basic equipment: $150,000
Consumables (6 months): $50,000
Lab furniture/setup: $25,000
Safety/regulatory compliance: $15,000
Contingency: $25,000

*** Remember that these are all example amounts. Every science and company is different, so don’t worry if your number differ.

As a conclusion, as a technical founder, you’ll likely be more comfortable listing out your expenses in the opposite way to how it’s traditionally done. Following EDC’s methodology:

Start with your science and scientific variable costs like reagent & consumables, CROs, clinical studies, etc…,
List lab/scientific fixed and reoccurring costs (think working at the bench, so equipment certifications and calibrations, hazardous waste, etc. and working at the desk – analytical software, computers, memberships, conferences, etc.)
List company/office and administrative fixed and reoccurring costs
Add up variable and one-time costs by category (legal, accounting, marketing, etc)

Additional comments:

Getting real vendor quotes: Not totally necessary. Conservative estimate are fine, but vendor quotes are good for key pieces of equipment.
Build scenario models: after you figure out the total for your first projection (P1), figure out what you would do with only 30% of the P1 amount. Then figure out what you would do with 5-times the P1 amount.
Show lots of people: There’s so much to consider, you likely won’t capture all your costs on your first pass at this. Be open to criticism and suggestions and modify where YOU see fit.

V. Biotech Startup Hiring: Salary Ranges & Equity Guidelines

Personnel typically represents your largest expense category. Strategic hiring aligned with scientific milestones and fundraising calendars is crucial for capital efficiency.

2025 Compensation Benchmarks

Role	Salary Range	Equity % (Fully Diluted)	Notes
PhD Scientist	$100–120K	0.1–0.3%	Adjust for experience, location
VP Preclinical	$200K+	~1%	Critical for IND-enabling studies
Head of Manufacturing	$180–220K	0.5–1%	Essential for GMP transition
Clinical Operations	$150–180K	0.3–0.7%	Hire before IND filing

Hiring Strategy Tips from Emory

Use compensation benchmarking tools like Carta’s Total Comp Benchmark and Gust Launch
Budget for payroll taxes and benefits (20-30% of the salary)
Include advisors and consultants as separate budget lines
Adjust for geographic cost-of-living differences

Plan hiring using 3 month quarters to estimate or in phases, aligned with scientific and fundraising milestones.

VI. Strategic R&D Outsourcing: When to Build vs. Buy

Strategic outsourcing helps control costs while maintaining core capabilities in-house. Most early-stage biotechs use a hybrid model: in-house R&D for speed and control, outsourcing for specialized work or for increased capacity.

Outsourcing Decision Framework

Outsource When…

Specialized expertise or infrastructure required
Many startups outsource capabilities that require highly specialized infrastructure or expertise not feasible to build in-house early on.
Capital equipment costs exceed $100K
- Example: Flow cytometers, bioreactors, imaging platforms
Equipment leasing or outsourcing can significantly reduce upfront capital expenditure, especially when instrumentation costs exceed six figures.
Regulatory requirements demand specific certifications
- Examples: GLP, GMP, CLIA-certified labs
Specialized studies that must meet FDA submission standards (e.g., GLP toxicology, GMP CMC work) are typically outsourced to experienced CROs.
Timeline constraints require parallel workflows
- Example: Running in vivo studies while optimizing formulation internally
Parallelizing efforts with CROs or consultants can accelerate timelines, especially when internal bandwidth is limited.

Keep In-House When…

Core IP development activities
- Examples: Early discovery platform, proprietary screening assays
Founders should retain tight control over their core intellectual property generation activities.
Rapid iteration and optimization needed
- Examples: Cell engineering, assay tuning, formulation tweaks
Internal teams are better equipped for rapid experimental cycles than external vendors.
Proprietary methodologies or know-how
- Examples: Custom data analysis pipelines, secret protocols
Maintaining competitive advantage often requires keeping key methodologies confidential and internal.
Quality control and data integrity are critical
- Examples: Foundational datasets, validation experiments
Data that informs future filings or publications is often safer and more reliable when generated internally.

Cost Examples

ELISA development via CRO: $25,000+
GMP manufacturing batch: $150,000–$500,000
Toxicology studies: $200,000–$1M+

CRO Vetting Tips

Ask your network for referrals and pricing
Ask CROs for references
Assess their technical capabilities
Request detailed scope of work (SoW), flexibility in the SoW and milestone payments
Always clarify the ownership of data
Evaluate regulatory compliance track record
Consider geographic location for cost optimization
Pay attention to cultural elements when interacting with them. Are they responsive, collaborative, and curious about your science? How to they handle pushback and clarifications? Have they work with companies like yours before?

VII. Lab Equipment & Infrastructure: Maximizing Capital Efficiency

Setting up a lab represents a massive upfront investment. There are certain advantages that buying new (especially with equipment) will afford you, however smart founders leverage multiple strategies to reduce this burden while maintaining operational flexibility. This is probably a bit outside the scope of building your budget projections, but it’s good to have an idea how you expect to move forward. Here are a few purchasing strategies for scientific purchases that you might find useful for your calculations.

Cost Reduction Strategies

1. Buy Used/Refurbished Equipment

Sources: eBay, Govdeals.com, Institutional Surplus (ex. UCSD Surplus), LabWorld Group, BioCiv
Savings: 40-70% off new equipment prices
Focus: Non-critical instruments, basic lab furniture

2. Lease Big-Ticket Items

Providers: Excedr, Lease Corp, equipment manufacturers
Benefits: Preserves cash, includes maintenance, tax advantages
Best For: Analytical instruments, specialized equipment

3. Join a Buying Consortia

Organizations: MassBio, BIO, local biotech associations (ex. SoCal Bio, Ohio Life Science)
Benefits: Volume discounts, shared vendor relationships
Savings: 10-25% on consumables and reagents, typically also offer other discounts

4. Utilize Shared Laboratory Spaces

Examples: LabCentral, JLABS, university incubators
Benefits: Reduced overhead, shared infrastructure, networking
Considerations: Limited customization, scheduling constraints

5. Time Major Purchases

Year-end deals: Often 20-30% discounts
Trade show specials: Equipment demonstrations available
Vendor financing: 0% interest promotions

VIII. Building Your Scientific Advisory Board on a Budget

Your Scientific Advisory Board (SAB) should function as a strategic asset, not just a credibility boost. These people don’t work for free, so their compensation, how it’s structured, institutional policies, and meeting cadences should work with your operational needs and fundraising strategy. And remember, this group of people can change, and should change, if you want and as your company’s needs evolve.

For early-stage startups, the SAB is typically 3 to 5 people, providing a balance of credibility, strategic guidance, and early networking support complimentary to you and your team. An odd number is also typically prefered, but not necessary. As your company grows, this group expands to 5 to 7 members who can offer deeper expertise across areas like clinical development, regulatory strategy, and commercialization.

SAB Compensation Guidelines

Typical Equity: 0.1–0.3% (fully diluted) per member, based on engagement level

Compensation Structure Options:

Equity-only: Most common for early-stage companies
Cash + equity: For highly engaged advisors
Project-based consulting: Hourly rates for specific deliverables

Strategic SAB Building Tips

Balance Academic Prestige with Availability

Renowned academics provide credibility but likely have limited time for impromptu advice/meetings
Industry veterans offer practical insights and networks but might be set in their own
Mix of backgrounds strengthens your positioning

Navigate Institutional Conflicts

NIH-funded faculty: May have restrictions on equity compensation
Industry advisors: Potential conflicts with current employers
Document agreements carefully: Clear IP and confidentiality terms

SAB Meeting Best Practices

Frequency: Quarterly meetings for early-stage companies
Duration: 2-3 hours maximum per meeting
Format: Mix of presentations and strategic discussions
Deliverables: Written feedback, introductions, strategic guidance

IX. Funding Strategy: Balancing Dilutive and Non-Dilutive Capital

Knowing where you’re going to get money and how much you think you be getting are also key to building your projections and budgets. A balanced funding strategy involves combining grants, institutional capital, and strategic partnerships to reduce dilution while maximizing long-term value creation. Note that a balanced strategy likely won’t produce a balanced outcome, but you should be driving all available avenues for funds until they have been ruled out. There are many many sources, so here are a few that are ment to inspire ideas and shed light on new areas for you to look.

Non-Dilutive Funding Sources

Federal Grants

SBIR/STTR: $500K–$2M+ over multiple phases
DOD/NSF Programs: Varies by agency and program

Foundation Funding

Gates Foundation: Global health focus
CIRM: California-based regenerative medicine
Disease-specific foundations: Align with therapeutic area

Strategic Partnerships

Sponsored research agreements: $100K–$5M+
Option/licensing deals: Upfront payments + milestones
Joint ventures: Shared costs and risks

Dilutive Funding Options

Friends & Family: $50K–$500K

Advantages: Quick closure, flexible terms
Considerations: Relationship management, limited capital

Angel Investors: $100K–$1M

Advantages: Industry expertise, network access
Considerations: Due diligence requirements, board involvement

Venture Capital: $2M–$50M+

Advantages: Large capital amounts, strategic guidance
Considerations: Significant dilution, board control

Pro Tip: Use NIH RePORTER Database

Research actual SBIR/STTR awards in your therapeutic area to understand realistic funding amounts and successful application strategies.

X. Financial Modeling, Company Valuation & Exit Planning for Biotech Startups

Your financial model serves as more than a budgeting tool, it’s a strategic framework for aligning everyone around your idea and how to execute. You need everyone from investors, advisors, and your internal teams to be familiar with your goals and all move together, in the same direction, towards your value creation milestones. A few tools and platforms to help you do this are the following:

Essential Model Components

Revenue Projections

Market size analysis: TAM, SAM, SOM calculations
Pricing strategy: Cost-plus vs. value-based pricing
Adoption curves: Conservative uptake assumptions
Competitive landscape: Market share scenarios

Cost Structure Modeling

COGS: Manufacturing, regulatory, distribution
Operating expenses: R&D, SG&A, clinical trials
Capital expenditures: Equipment, facilities, IP

Scenario Planning

Conservative case: Delayed timelines, higher costs
Base case: Most likely outcomes
Optimistic case: Accelerated development, partnerships

Financial Projection Models:

There are excellent financial projection templates available online. ProjectionHub, for instance, offers comprehensive, investor-ready models designed for biotech and medtech startups. However, many early-stage founders don’t need that level of complexity. If you’re primarily trying to understand your runway and plan your hiring timeline, a straightforward model often works better.

EDC’s basic financial template covers the essentials: projected expenses, team growth, and key milestones. It’s designed to be practical and user-friendly, helping you get the financial clarity you need without getting caught up in unnecessary detail. Sometimes the best tool is the one that gets you moving quickly toward your goals.

How to Produce a Valuation Using Your Financial Projections

As a scientific startup founder, you’re likely comfortable with complex systems and data, so we’ll skip a lot of the fluff. Valuations will feel different because they’re more ambiguous and can sometimes be strategic than realistic. An added complexity for Biotech and science is that valuations also combine logic with storytelling, because when you’re not producing revenue we need to be persuasive. Your goal will be to demonstrate that you understand the economic potential of your science, the risks involved, and how both change over time. Having been in your shoes, I’ve outlined a few different methods for building your valuation based on situations. Keep in mind that this will be like statistics, the final number will always be influenced by the desired result.

1. Risk-Adjusted Market Model (Most Common for Biotech)

This is the standard approach for early-stage biotech companies.

Formula: Valuation = Market Size × Price per Unit × Market Share × Probability of Success

To build it:

Define your market size: population affected or units used annually
Estimate price per unit: based on similar approved products or tools
Choose a realistic market share (1–5% is typical at this stage)
Apply a stage-adjusted probability of success (around 10% for preclinical therapeutics)

You’ll get a hypothetical peak value, which investors then discount based on time and risk.

2. Comparable Company Analysis (Fast & Market-Aligned)

This approach works well when you’re raising capital and need a defensible number quickly.

To do it:

Find companies at your stage in your domain (Series A oncology startups, for example)
Review their valuation at funding or acquisition
Adjust based on your assets, stage, and IP position

This tells investors: “Others like us have raised on similar terms.”

3. Discounted Cash Flow (DCF) (Only for Companies Expecting Revenue Soon)

Use this only if you have a near-term path to revenue through services, tools, or diagnostics.

Steps:

Forecast cash flow over 5–10 years
Estimate terminal value
Apply a discount rate (typically 15–30%) to reflect biotech risk

This method requires substantial data but becomes useful once revenue becomes predictable.

4. If You’re Not Expecting Revenue

If your company won’t generate revenue before exit (common in therapeutics), your valuation will be based on:

Asset value: future potential of your lead program(s)
Milestone inflection points: IND filing, Phase I/II data, licensing readiness
Comparable M&A or licensing deals: What similar assets have sold or licensed for
Estimated exit potential: Based on market size and clinical stage
Time to exit: Most biotech acquisitions happen post-Phase I/II

In this case, your model projects value at exit, adjusted for risk and time. Build your model to reflect:

Total cost to reach key milestone ($15M to IND, for example)
Probability of success (10% to Phase II, for instance)
Estimated exit value at that milestone ($100M licensing deal, for example)

Then apply: Valuation today = (Estimated Exit Value × Probability of Success) ÷ Discount Factor (based on years/timing)

This gives you a risk-adjusted valuation based on your destination, not revenue projections.

Final Note on Valuations:

Start simple. Use your projections to show that:

You understand how biotech companies create value
Your scientific milestones connect to real economic outcomes
You know the cost, timeline, and risk of getting there

EDC’s basic financial template helps you map this out without unnecessary complexity. You can add more sophisticated elements as you move toward institutional funding.

DOWNLOAD LINK FOR EDC FINANCIAL TEMPLATES:

XI. Biotech Budgeting Tools & Templates for 2025

Selecting the right tools for financial planning saves time, reduces errors, and enables data-driven decision making throughout your company’s growth. We’re of course bias towards our own tools, but here are a few more options for you to consider and find what works best for you:

Recommended Tool Stack

Financial Planning & Analysis

EDC Budget Template Pack: Biotech-specific templates [Download Link]
ProjectionHub’s Biotech Model: Industry-specific modeling
Finmark: Startup-friendly financial planning
Kruze Consulting’s COA Generator: Chart of accounts setup

Lab & Operations Management

Benchling: Lab notebook and inventory management
Quartzy: Lab supply ordering and tracking
Excedr’s Equipment Lease Calculator: Capital planning tool

Accounting & Compliance

QuickBooks: Small business accounting
Kruze Consulting: Specialized biotech accounting
Carta: Cap table and equity management
DocuSign: Contract and compliance management

Template Customization Tips

Modify for Your Business Model to consider:

Therapeutics vs. diagnostics vs. platform companies vs. MedTech vs. Med Devices vs. etc.
B2B vs. B2C customer acquisition costs
Regulatory pathway requirements

Include Industry-Specific Metrics

Cost per patient recruited or in vivo model required
CRO vs. in-house R&D ratios
IP maintenance and filing costs
Regulatory consultant fees

XII. Conclusion: Budgeting as a Strategic Leadership Tool

An effective biotech budget and projection transcends simple financial accounting. It clarifies your vision, builds your investor’s or potential investor’s confidence, and enables strategic decision-making. Treat your budget as a living document that evolves with your company’s growth, needs and market conditions.

Key Takeaways:

Align budgets with scientific milestones and fundraising cycles
Build out costs from a science first perspective
Balance capital efficiency with strategic investment
Leverage different funding strategies to extend your runway
Build scenario models for uncertainty management
Update regularly as you gather “actuals” based on actual performance

PRO TIP: Learning from Successful Founders through insights from leaders like Alice Zhang (Verge Genomics) and Daphne Koller (Insitro), who share transparent perspectives on early-stage budgeting strategies and capital allocation decisions.

And if you’re navigating biotech budgeting for the first time, remember that experienced guidance can accelerate your learning curve and help avoid common pitfalls. EDC has supported dozens of early-stage companies in developing investor-ready budgets and strategic financial frameworks. Our first consult is always free, so take advantage of our experience and come with questions.

📩 Contact EDC to learn more about our consulting services or access our comprehensive template library.

XIII. Frequently Asked Questions

Q: How much does it cost to start a biotech company in 2025?

A: Biotech/life science startup costs typically range from $500K to $3M for the first 12-18 months, depending on therapeutic area, development stage, and team size. However, Y Combinator data shows some companies can launch with as little as $0-$200K using shared facilities and outsourced R&D, especially in the MedTech and device verticals.

Q: What’s the ideal budget projection timeline for biotech companies?

A: Build two complementary views: (1) a high-level development timeline showing your path to market, and (2) more detailed projections (can be quarterly) for your current funding phase. For example, seed-stage companies should project 12-18 months to their Series A milestone.

Q: How do biotech and life science burn rates compare to other industries?

A: Biotech and life science burn rates average $20,000 per employee per month, significantly higher than software companies (~$10,000) due to R&D intensity, regulatory requirements, and longer development cycles.

Q: Should I prioritize dilutive or non-dilutive funding?

A: Balance both approaches. Non-dilutive funding (grants, partnerships) extends runway with less dilution, while dilutive funding (VC) provides larger capital amounts and strategic guidance. Most successful biotechs use a mixed approach.

Q: When should I hire key personnel vs. using consultants?

A: Hire for core capabilities and long-term strategic roles (CEO, CSO, VP of R&D). Use consultants for specialized expertise, short-term projects, or when you need flexibility before your next funding round.

Q: How do I benchmark my budget against industry standards?

A: Use resources like Kruze Consulting’s benchmarking data, AngelList salary surveys, and peer company disclosures. EDC’s template pack includes industry benchmarks across key expense categories too.

References & Sources

Luciano Santollani, “A Founder’s Guide to Data-Driven Budgeting in Biotech,” Pillar VC, 2022
Excedr, “How to Create a Budget for Your Biotech Startup,” 2022
Browne Consulting, “Best Practices for an Effective Operational Budget,” 2022
Adam Hoeksema, “Biotech Startup Finance: Why It’s So Tough,” ProjectionHub, 2022
Sadhana Chitale et al., “So You Want to Start a Biotech Company,” Nature Biotechnology, 2022
Excedr, “A Biotech’s Guide to Managing Startup Costs & Expenses,” 2024
Emory University, “Guide to Biotech Startup,” 2024
Kruze Consulting, “Creating a Chart of Accounts for a Biotech Startup,” 2024
Y Combinator, “Biotech Library and Startup School for Biotech,” 2023
Nature Portfolio, “BioEntrepreneur Column,” ongoing
National Institutes of Health, “NIH RePORTER Database,” accessed 2025
Carta, “Startup Compensation Tool,” and Gust Launch, 2024
Various founder interviews from Verge Genomics and Insitro, 2022–2025

This guide represents research and analysis compiled in 2025. Financial regulations, market conditions, and industry standards may change. Always consult with qualified financial and legal advisors for specific guidance on your company’s situation.