These days it does not feel like there are many bright spots in the economy so when you come across them I feel like it is important to share them.

A recent report on the state of the VC funding industry did not have a ton of bright spots but the Bio-tech industry was one of them.  Here is an encouraging quote from the report:

“Investments in Life Sciences companies represented the highest percentage of total VC
investments since the inception of the MoneyTree Report,” noted Tracy Lefteroff, global
managing partner of the venture capital practice at PricewaterhouseCoopers LLP. “And,
while the largest deal of the quarter was a Biotechnology company, even if we exclude it,
the Biotech sector is still the largest single industry category for the quarter. With the
improvement we’ve seen over the past few months in the capital markets and a small
crack in the IPO window during Q2, we’re already beginning to see VCs turn their focus
back to new investments, as the 67% increase in Seed and Early Stage fundings in the
second quarter would suggest. Based upon the current pace of investing during the first
two quarters, it’s likely we’ll exceed $15 billion in investments for the full year, a total
close to what we saw in 1997 before the Internet bubble.”

This may be a cup have full type of comment but in general the tone is encouraging and certainly should provide a bit of extra encouragement for those in the early stages of developing medical device technology.  Here is a link to the full press release: (link)

One other notable exerpt from the report was an overview of the overall VC funding and number of deals from 2005 to the first quarter of 2009.  Though this chart does not convey the same positive ton as the press release it does help to understand the natural cycling of the funding.

(Full Size)

Here is a link to the raw data, the above chart illustrates a filtered version just highlighting the VC investment in Bio-Tech.  (link)

The only answer is to keep the engine churning, based on numerous developments (Doctor-Manufacturer Incentives, etc.) it is clear that innovation has to start at the bottom, fueled to degree by the entrepreneurial spirit.  For those of you sitting on one of those ideas, now is the time to act, to get ahead of the curve and to be ready for the next up tick.

Good Luck

-DMS