The Corporate Governance of Life Science Companies

Abstract

After the venture capital investors have made their pre-investment decision work, the post-investment activities take place: that is, all the activities aimed at monitoring and supporting the valueadding activities in the start-up firms. The extensive literature on venture capital investment suggests that venture capital firms not only provide financial capital but also add value to the firm they choose to invest in when these firms become part of a network of contacts and expertise that benefit their longterm success and ultimately their survival. Consonant with such claims, this chapter demonstrates that venture capital investors are highly involved in securing leadership skills, commercial human capital, and director competence to the boards of the companies throughout their engagement in the start-up firms. Similar to the previous chapter, the venture capital investors are first examined and thereafter the view of innovation system officers and start-up firm representatives is presented. The chapter addresses first how venture capital firms carefully distinguish between academic potentials and scholarly interests on the one hand, and therapeutic and commercial possibilities on the other. What may be a very promising academic breakthrough that in the future may lead to new therapeutic areas may still be premature from a venture capital investor’s perspective.