September 25, 2023

The Finance 101 of Funding the Life Science Mission – After the IPO

by David Johnston

Friends and family funding? Check.

Private Equity rounds? Check

IPO? Check.

Congratulations! You are a publicly-traded biotech with, like the ’80s song says, a future so bright you gotta wear shades. So what now? What happens post IPO?

Now starts your day-to-day life as a publicly-traded company. It’s predictable but also predictably tough and constantly scrutinized. Mission-critical activities are now an almost daily occurrence.


Sarbanes Oxley is now in the picture. Everyone is under oversight, including your board. There are no surprises to these first four S-O rules:

1 – Establishes the Public Company Accounting Oversight Board – Your auditors are held to very high standards.

2 – Auditor Independence – Auditors are very separate from your company and conflicts of interest, like an auditor providing consulting for the same client, is not allowed.

3 – Corporate Responsibility – If it’s in a financial report, company principals own it and sign off on it.

  1. Enhanced Financial Disclosures – Everything is reported, even if it is an off-balance sheet transaction.

Investor Relations

Investors are not actually investors but customers now. They are a customer that needs “white glove” attention and targeted marketing. Attending conferences and non-deal roadshows (NDRs) is a must. Significant current and potential investors get personal visits. Your VP of Investor Relations is a crucial company position and the finance team now includes a very essential marketing professional.


Stocks can move significantly on an analyst’s change, or lack of change, of their guidance. Any analyst covering your stock must receive the same care and feeding you’d provide to your favorite pet. Give them access to the CMO, CSO, and CEO. Some analysts will love you and some will hate you. Regardless, each one needs to receive the same respect and hospitality. It is worth it!

Additional Capital

It’s inevitable that there will be a need to raise more capital. Hopefully, between the IPO and the next raise, the stock has done well, the investors in the IPO made money, and there is demand for your stock. Market every positive catalyst heavily and time each raise around them.

Mix Up Your Syndicate

Give other banks a shot to raise additional capital. While your IPO syndicate will scream bloody murder, there isn’t a “house band” and they need to know it. This keeps other banks calling on you as they know the door is open to doing business with you. Let them compete away.

Your message to the banks is, “Yes, you were on the last offering and you might be on the next, but we reward the institutions that work the hardest.”

The financial day-to-day as a publicly traded corporation isn’t easy, but it is necessary and very worthwhile as capital keeps your world moving forward into ever greater possibilities.

David Johnston is the principal of dbj consulting, a consultancy of finance and strategy for the life sciences industry. He has his MBA from the University of Michigan. David Johnston also serves on the boards of multiple non-profits.

Read David Johnston’s full article to learn more about biotech financing here: