Phase 3 Search · June 2026
This document explains what the Biotech Capital Report measures, how the underlying data is verified, and what it is — and is not. It is the companion to the published report and exists so readers can understand the standard behind every claim.
A single metric: follow-on rate — the percentage of an investor's biotech portfolio companies in which that investor participated in two or more funding rounds at distinct dates, computed across an 11-year observation window (2015–2026).
Follow-on rate measures conviction, not outcome. A firm that backs a company through Series A, B, and C is making a different bet than one that writes a single check at an IPO-adjacent round. The metric is designed to make that distinction visible.
Tier boundaries: Tier 1 ≥ 50% follow-on · Tier 2 30–49% · Tier 3 < 30%.
Minimum portfolio for inclusion: 5 distinct biotech companies in the window. Firms below the threshold are excluded from the published list.
The report is built on the Phase 3 Capital Intelligence dataset — a compiled record of 37,308 biotech venture deal events spanning 1995–2026, covering 2,156 unique companies. The published tier list comprises the 517 investors that meet the five-company minimum within the 2015–2026 analytical window. Earlier rounds are retained in the source but excluded from the follow-on calculation, which requires a multi-year window to register multi-round patterns.
Investor records are reconciled to a canonical entity layer — name variants and casing duplicates of the same firm are merged, while a venture arm and its parent company are kept as distinct actors (e.g., Pfizer Ventures and Pfizer are treated separately, per industry convention).
The dataset is verified through a multi-pass, multi-source research process that triangulates each fact against primary sources — SEC EDGAR filings (Form D and S-1 principal-stockholder tables), company funding press releases, and investors' own portfolio disclosures. A claim is treated as defensible only when it survives independent verification; records that cannot be verified are tagged and excluded from the published list rather than guessed at.
Before publication, the data passes three independent verification gates:
Every firm in the published list carries a confidence band based on portfolio size. Named claims in the body of the report draw only from the Robust and Standard bands; the full interactive table surfaces every firm with its band visible so readers can apply their own threshold.
| Band | Sample size | Count |
|---|---|---|
| Robust | n ≥ 25 | 87 |
| Standard | n = 15–24 | 70 |
| Adequate | n = 10–14 | 88 |
| Limited | n = 5–9 | 272 |
Not predictive. Follow-on rate measures historical behaviour across the 11-year window (2015–2026). It does not forecast future investor behaviour.
Not complete. A share of biotech companies have insufficient public disclosure to verify investor lists; those rounds are excluded. The dataset captures the publicly-disclosed universe, not the full venture history.
Not a quality judgment. A firm in Tier 3 is not "worse" than one in Tier 1. Hedge funds, crossovers, and pharma BD entities show low follow-on rates by design — they write single checks at specific moments. Tier 1 and Tier 3 produce similar pooled exit rates; they reach those outcomes via different strategies.
Not investment advice. The report is a structural analysis of capital behaviour. Investment decisions involve many factors not captured by a single metric.
Quiet-participation bias. Firms that participate in rounds as existing investors without being individually named in press releases are systematically under-counted. The published rates reflect the publicly-disclosed pattern. For several prominent firms where this matters, the published rate was cross-checked against the firm's own disclosed portfolio and found consistent.
Crossover under-count. Crossover funds disclose private investments inconsistently; their published low follow-on rates reflect their disclosed pattern, which may understate true private-side activity.
Pharma BD entity boundary. Pharma corporate venture arms are classified separately from the parent pharma company. Direct deals from the parent are tagged Pharma BD; corporate-venture deals are tagged Corporate VC, matching industry convention.
The interactive Follow-On Explorer shows every firm with its follow-on rate, sample size, and confidence band. If you believe a specific firm has been mischaracterized, contact us and we will review and correct promptly. The full deal-level source records and verification detail are maintained by Phase 3 Search and available to verified subscribers under confidentiality.
Compiled by Phase 3 Search · June 2026. This document is the methodology companion to The Biotech Capital Report.