Pomp and Circumstance

William Bains

Chapter 10 in Venture Capital and the European Biotechnology Industry, 2009, pp 140-149 from Palgrave Macmillan

Abstract: Abstract Having given the company too little money, fired the management, blocked business deals and driven the business into a commercial cul-de-sac, one might have thought that the VC/manager would at least want to conserve every penny of cash that the company had. However, the business model as it is pursued by VC-backed biotechnology companies in Europe does not appear to do this either. What I called ‘Cargo Cult Economics’ in Chapter 1 appears to apply here too — the argument that if big, successful companies do something, then if we do it too we will be a big and successful company. I will exemplify this with three examples of needless expenditure that VC-backed firms pursue in the pursuit of the illusion of being a ‘big, successful company’. I should emphasise that generally these policies are pursued by companies that are not big, successful companies, and in some cases are not big or successful because they have run out of cash.

Keywords: Venture Capital; Small Company; Biotech Company; Serial Entrepreneur; Major Pharmaceutical Company (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-22726-2_10

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DOI: 10.1057/9780230227262_10

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