Gensent

For exclusive use at Stockholm School of Economics, 2015

9-298-070

REV: SEPTEMBER 5, 2001

PAUL GOMPERS

Genset: 1989

Pascal Brandys and Marc Vasseur stared at the many napkins spread out on the conference table.

Since first meeting six months ago in October 1988 and exchanging ideas, they had held numerous

brainstorming sessions in Paris restaurants. They used the napkins to take notes about their strategy

for building a biotechnology company. There were many service and product development options

to pursue; now they only needed to choose the right ones. Their choices would determine the success

or failure of the firm. Had they developed the right strategy to gain a competitive advantage in this

growing industry? Was this the opportunity to start the company they had each been waiting for?

Brandys, a 30-year-old international venture capitalist with experience investing in biotech, had

always dreamed of starting his own technology company. Brandys knew that because Genset was

not sufficiently developed to present to U.S. venture capital firms, he would have to raise all of his

money in Europe, with the majority coming from French venture capital. In addition, U.S. venture

firms were more accustomed to regional investing. His experience, however, told him that raising

money for a biotech company in France would be difficult. How much money could he expect to

raise? His business plan outlined a need for 10 million French Francs ($1.7 million), significantly less

than he would realistically need to build a global firm with cutting-edge research. In the United

States most biotechnology firms raised between $5 and $20 million in their development stage. Was

access to top French scientists worth all the disadvantages of starting the company in France? They

were preparing their presentation for Sofinnova, the premier French venture capital firm and one of

the only ones that could be their lead investor. Brandys was determined to convince the...