We generally agree with the notion that many early-stage biotechs should be structured as LLCs instead of C corps. This short interview with Attorney Albert L. Sokol highlights one key benefit which we find important:
When corporations buy a biotech whole, they typically make offers that primarily reflect the value of the drugs that interest them. Start-ups that agree to these deals get little or nothing for their other products. By selling drugs piecemeal, a start-up can wring more value from each one, and buyers don’t have to spend time evaluating therapies that don’t interest them, according to Sokol. The biotech can then pass the gains from each sale on to venture investors, giving these firms a steady stream of income.
