The first problem is mixing stages of development under one convenient label. A biotech company still running animal experiments is in a different universe from one that has dosed its first patient and shown any hint of clinical activity. Yet pitch decks routinely group them together to raise the average valuation. This is no small oversight: according to industry data from BIO and CMR International, fewer than one in ten preclinical oncology programmes ever see commercial approval. Lumping these together with Phase I or Phase II companies papers over the reality that early science is still a high-wire act.

There is another flaw that hides in plain sight: the tendency to equate fundamentally different technologies. Gene therapies, cell therapies, biologics, small molecules - all have different paths through manufacturing, regulation and market adoption. A new gene editing platform may well justify a premium, but that premium should reflect unproven safety profiles, complex manufacturing hurdles and tighter regulatory oversight. Comparing it to a more conventional small molecule targeting the same disease is like comparing a prototype sports car to a family hatchback because both have four wheels.

Investors should also be wary when they see the phrase "platform company" sprinkled through these decks. It suggests the promise of multiple products spun from a single technology. But unless there is credible evidence that management can develop and finance those extra programmes, their value remains theoretical. Probability weighting is standard practice among professional investors, yet it is astonishing how many presentations gloss over this discipline when showing pipeline charts full of future possibilities.

One recent case we handled demonstrates the point. An early-stage oncology start-up put forward a pre-money figure of $50 million, citing five recent deals in the same area. A closer look found only two of these companies were genuinely at the same scientific stage and using a similar approach. Adjusting for this, and applying conservative success rates for similar small-molecule oncology drugs, we calculated a fairer pre-money closer to $35 million. That difference was the result of careful questions - questions that many non-specialist investors are not always trained to ask.

It would be a mistake, however, to suggest that comparable data has no value at all. Done properly, it remains an important sense-check. Investors should treat it as a starting point, not the final word. Good analysis means asking: Does the peer group truly match on stage? Is the science comparable in its complexity? Is there proper allowance for the inevitable attrition in drug development? And crucially, does the valuation reflect the real capital required to take the science to its next milestone?

The best investors know that biotech is not a game of paying today for the distant hope of tomorrow. It is about paying today for a rational share of the risk-adjusted future value, grounded in science, execution capability and the capital needed to unlock both. The headlines do not build medicines; disciplined capital and realistic pricing do.

At Acuity, we believe that family offices and generalist funds can back exceptional innovation without paying unsustainable prices. It requires diligence, scepticism and the willingness to look beyond the polished deck. In this industry, price discipline is not about squeezing founders - it is about ensuring that good science gets the runway it deserves, and that investors share in the upside if that science delivers.

Too many early-stage companies fail not because the ideas are bad, but because they were priced too aggressively at the start, leaving little room for fresh capital when challenges inevitably appear. Sensible valuations protect founders as well as investors.

So the next time a pitch deck arrives with its neat slide of comparable rounds, treat it as the opening line of a conversation, not the final verdict. Ask for the source data, test each peer company for true comparability, question assumptions about the future pipeline and always tie the headline number back to risk.

Biotech can transform lives and build serious long-term value. But only when everyone at the table accepts that valuation is not a slogan, but a discipline.