While you are not wrong about the VC structure, you are being incredibly misleading about the average biotech funding round. That average number includes companies in areas like cancer, rare and orphan disease space, etc. In the hairloss space, this is (I think) the largest funding round ever raised where hairloss is one of the primary indications. There might be a series C or D from like 2 decades ago that I'm not aware of though.it's kind of a meta-discussion, but this is absolutely not how early stage VC funding works.
a typical split would be a VC firm investing in 10 companies - with the expectation that 7 fail, 2 have moderate returns, 1 has good returns
failure is actually the default expectation for any specific company (despite due diligence to try to reduce this rate)...but the ones that show returns make up for all the failed bets
*(glancing at the firms that invested here, it looks like they have a 10-15% exit rate with a bunch more companies "in flight", completely in line with the principle outlined above)
Their investors could easily believe all of the following at the same time, they are not contradictory:
-Hope Medicine as a company has a better than even chance of failure at everything
-HMI has a good *enough chance of reaching the market to treat endo, making 60M a good investment to own a large share of the returns (this is actually a below average amount for recent biotech series B funding)
-HMI has a 1% chance of having the literal cure for hair loss and reaching the market in the near future
Your 50% and 1% figures are also laughably dumb. Once a drug has reached phase 2, it's odds for reaching the market are about 50%. With two indications in phase 2, the company has an above 50% chance based on historical averages for having one successful application.