By Doug Brown and Ivan Lim
Biopharma financing has picked up in 2026, but that doesn’t mean raising capital has become easier for every company.
According to J.P. Morgan, global biopharma venture funding reached $23.9 billion across 385 rounds in the first nine months of 2026. Of that, $17.3 billion went to Series B and later financings, leaving $6.6 billion for seed and Series A companies. Europe is seeing renewed investment as well, with $1.1 billion raised in Q3, nearly double the same period last year.
The challenge is particularly acute for early-stage companies trying to move from preclinical development into the clinic. Investors increasingly favor clinically validated, lower-risk assets, but getting to the clinic in the first place requires substantial capital for toxicology, CMC development, manufacturing and regulatory preparation.
Finding alternative routes to the clinic
Traditional venture capital remains essential, but founders are increasingly looking beyond conventional financing rounds to advance their programs.
Strategic investments from pharmaceutical companies, licensing agreements and development partnerships can provide funding alongside access to scientific and development capabilities. Disease-focused foundations and venture philanthropy organizations can also play an important role, particularly where traditional investors are reluctant to take early development risk.
Government grants have historically been another valuable source of funding. In the US, the NIH’s SBIR and STTR programs have helped early-stage companies advance research without diluting ownership. However, a six-month lapse in authorization halted new awards until the programs were reauthorized in April 2026. While funding can now resume, uncertainty around the timing of delayed awards remains a challenge for companies planning their development.
Cloverleaf Bio offers a good example of how different funding sources can work together. The company raised a $33 million seed round in September, backed by specialist venture investors and the venture arms of AbbVie, Lilly and Boehringer Ingelheim, building on earlier support from the National Cancer Institute’s SBIR/STTR program.
Competition for strategic capital is also increasing internationally. According to J.P. Morgan, 51% of global big-pharma licensing deals with upfront payments of at least $50 million originated in China through September 2026, up from 39% in 2025. For US and European biotechs seeking pharmaceutical partners, this creates additional competition for the same strategic relationships and partnering capital.
Leadership is the differentiator
For founders, understanding the different financing paths and knowing how to access them can be just as important as the underlying science.
This is particularly relevant when considering the Chief Financial Officer and Chief Business Officer roles, which often overlap in early-stage biotech.
Access to capital is frequently the CFO’s most important responsibility. Beyond managing cash and financial reporting, the right CFO brings investor relationships, fundraising experience and an understanding of how to finance the company through its next meaningful development milestone.
The CBO brings complementary experience in licensing, corporate development and strategic partnerships that can provide alternative sources of financing.
In smaller companies, these responsibilities are often combined. Having someone who understands both traditional fundraising and strategic dealmaking can be particularly valuable when evaluating which financing options make the most sense.
The challenge is knowing when to pursue a venture round, when to engage a strategic partner and whether combining different funding sources offers a better outcome. Each carries different implications for dilution, future economics and control over development.
Not every company needs to hire both executives. Experienced board members, fractional leaders and specialist advisers can also provide valuable relationships and transactional experience as companies progress.
Getting to the next milestone
For early-stage biotech founders, the objective isn’t simply to raise another round – it’s to secure the capital needed to reach the next meaningful development milestone while preserving the company’s focus and potential for value creation.
That requires understanding the financing options available, having the relationships to access them and knowing how to negotiate the right agreements.
In today’s selective funding environment, these leadership and financing decisions can determine whether promising science ever makes it into the clinic.