In Warp Drive Deal, VCs Have A Potential Buyer – And Can Force A Sale

Third Rock launches a computation-heavy discovery firm aimed at natural products, with commitments worth up to $125 million in equity and other funding.

Investors in young biotechs are faced with a difficult path to returns: public listings are still scarce and pharma buyers hold the negotiating leverage in merger-and-acquisition talks. Nowadays, venture investors have more frequently taken the unusual step of lining up a potential buyer at the time of a company’s launch by selling an option to acquire the start-up for pre-negotiated terms. Such deals may reassure VCs, but they also limit shareholders’ upside if the start-up eventually exceeds expectations.

But the investors in Warp Drive Bio Inc

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