Biopharma VCs Move to the Middle in 2006
This article was originally published in Start Up
While the venture capital community spent roughly the same in biopharma investments in 2006 as they did in 2005, they put considerably more money into mid-stage companies (Series B and C investments), and slightly less into Series A and mezzanine rounds, than they had in 2005.
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2006 has seen an unusual number of large Series B venture rounds in biopharma compared to last year, though Series B rounds haven't been much larger on average.
Fundraising among private biotechs has evened out this year, with larger early rounds reflecting the renewed "think-big" strategy of some start ups, and larger late rounds a consequence of less receptive IPO markets.
While START-UP first noted an industry-wide tendency to overestimate the prices IPO investors were willing to pay in early 2005, IPOs have regularly fallen short of the anticipated price ever since, with few exceptions.