Biotech VC firms charge their startups ‘consulting’ fees

Hello, everyone, and how are you today? We are doing just fine, thank you. After all, clear blue skies and crisp temperatures are enveloping the Pharmalot campus, where the official mascot is hounding us to play and Mrs. Pharmalot, our culinary queen, is working on a new creation in the cafeteria. As for us, we are busy as usual sipping cups of stimulation — our choice today is, once again, butter pecan — and rummaging through our to-do list. We are especially busy, in fact, as we plan for a STAT soiree later (details here). Feel free to join us. Meanwhile, here are a few tidbits to help you get cracking. Hope all goes well today and that you stay safe. …

Some of the biggest names in biotech venture capital have charged their startups millions of dollars in “consulting fees” over the past decade, effectively taking back a small portion of the money they invested in a company, STAT reports. The fees are usually charged in exchange for certain additional services, such as when a venture capital firm loans an experienced executive to a startup to lead the company through its early days. They are far more common for venture capital firms that fund life science companies than for those focusing on technology or other sectors. Most of biotech venture capital’s biggest names have charged fees to portfolio companies directly or through an intermediary.