Boston Blog

Why is Boston a biotech mecca? Money and perception

Nature Biotechnology hosted a panel discussion last night about financing biotech companies, focusing on how to foster growth of the industry in places that are outside of the so-called “bioclusters” (cities with lots of companies, universities and investors, like Boston). Entrepreneurs and investors from Europe, Asia and the US talked about their experiences funding and searching for funding.

The take-home message was that it really does pay to be in Boston, the Bay area or other biotech hotspots, no matter how good your technology is. Despite the hype and the high cost of doing business in these places, the audience learned that if you can move to a biocluster like Boston, and you don’t have a really good competitive reason for staying where you are, then move.

Why? Yes, there are lots of smart, experienced people here: scientists, managers, executives. There are plenty of investors here.

But really, it comes down to a matter of perception. Being in Boston, as opposed to being in Kansas City or Lisbon, Portugal, automatically gives you greater credibility with investors. Just like I’m sure it’s the case that an average scientist with a Cambridge address on his/her resume will probably be more desirable to a biotech company than another average scientist with, say, an Indianapolis address.

Not exactly fair in an ideal world, but that’s human nature. We like brand name clothes, shoes, schools, companies and cities. Boston, as I can see from this enormous conference, has huge brand name appeal in biotech.

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    M. William Lensch said:

    I have to say that the value of having so many smart people in very close geographical proximity cannot be overestimated. It really makes a difference to be in the midst of so much. Try this, take out a map of Boston and trace a five mile radius around Copley Square. Then drive around and count up the number of biotech-heavy universities/hospitals, companies large and small, houses of pharma, IP law firms, and biotech finance firms. I’d be surprised if there was another place like it in the world. Being able to bop over to Whitehead and talk to somebody or run into some VC person at a hotel mixer makes good things happen that might otherwise never find the proper catalyst. The density of brainpower here builds upon itself. It’s a self-perpetuating system and one with very practical consequences when you want to get something done or connect ideas with people and financial backing. Clearly, this amounts to a great deal more than an impressive address on one’s letterhead. Being here allows real work to be done. I’ve said it before, Boston is Disneyland for science.

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