A group of VCs and CFO types at last week’s Indiana Life Sciences Summit discussed the funding environment for healthcare tech, biotech and pharma early-stage companies, and found the news good–sort of. More caveats stud this MedCityNews article such as:
- Early-stage companies are ripe for acquisition–a combination of new CEOs at medical device firms, low cost of capital and unsustainable valuations vs. growth prospects make for a ‘buy’ market. VCs looking for the exits at early-stage companies are looking to sell. (Jonathan Silverstein, OrbiMed)
- Money funding deals now was raised 2006 and 2008–and it’s dropping (Ron Hunt, New Leaf Venture Partners)
- Other funding options look more attractive than VC funding, such as reverse mergers and licensing of intellectual property.
- Startups researching rare diseases have become very attractive as FDA will approve quickly.
- Finally, beware of grant money from FNIH or non-profit foundations–they may come with benchmarks or reporting requirements that a company cannot comply with.
Want to avoid VCs or strategic investors entirely? ‘Bootstrapping’ may be the way to go if you don’t want to spend your life chasing investors. Andrew Gazdecki gives five ‘how to’ points in this article from Venture Beat. The most important points are that the founders retain control, stick to budgets and are forced to be innovative and nimble. It can be done!