As CFO in a pre-revenue clinical stage biotech company, managing the 'burn' rate is always of prime consideration. Over the last few years, private biotech has had to do more with less. A constant decision balance of allocating funds to pre-clinical programs which have less current value to investors, but future potential valuation? Or do you limit spending only to clinical programs which have higher visibility and higher perceived current value but also have a chance to fail. We made a decision to dramatically reduce pre-clinical activity and focus on the nearest term clinical trial program. If the clinical trial succeeds, our Company should be able to raise additional funding quite successfully.
Before investing in a stock, we will thoroughly analyze how it performs with regards to financially material ESG risks. The analysis results in an ESG score, which impacts the valuation of the company. A bad ESG performer will therefore be affected during its valuation process. This can significantly impact the financial appeal of the stock.
As a CEO of Startup House, I can share a personal experience where sustainability considerations influenced financial decision-making. When we were deciding on a new office space, we had the option of a cheaper location with poor energy efficiency or a slightly more expensive one with green building certifications. Despite the higher cost, we chose the sustainable option because we knew it would save us money in the long run through lower utility bills and a healthier work environment for our team. It was a decision that aligned with our values as a company and ultimately paid off both financially and ethically.