Innovating on Biotech Investment Models: Likely--or Even Possible?
This article was originally published in Start Up
Executive Summary
With the lack of a public market, VCs have grown extremely chary of new investments: are there lessons to be learned for biotech investing from the models employed by device investors or other apparently lower-risk approaches, such as "defined liquidity ventures"?
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Growing Companies--Part II
Offering a wide range of shared services, operational expertise, and senior executive mentoring, incubators are catching on in the medical device industry, helping to jump-start what might otherwise be a sluggish new-company creation. As they mature, incubators are also increasingly forging formal ties with venture funds, to help ensure that their early-stage projects will get funding at least through Series A. Indeed, the connection between incubators and private financing has always been strong, though the current dismal financing climate for medical device firms offers only a partial explanation for the growth of incubators. Incubators are also finding a place because of the need on the part of big companies to replenish product pipelines, providing both a source of new technology and, at the same time, an alternative to big-company efforts to develop new products from external sources. Though they share some common characteristics, the range of models and approaches taken by different incubators actually varies quite broadly, as a closer look at several of them shows in this second of a two-part series.
Growing Companies--Part 1
The notion of incubators is catching on quickly in medical devices, thanks in part to a difficult financing climate and, in part, to the desire of some executives to find a new career path, focused on mentoring companies and leveraging skill sets across a number of projects at once. Designed primarily to get early stage product ideas to proof of principle quickly, incubators are overcoming skepticism about their proper role and beginning to make their mark on the device industry. In this two-part series, we look at several different incubator models
The Impact of Incubators on Venture Investing
It seems logical that an incubator should facilitate venture fund investment in early-stage biomedical companies, since the incubator should accelerate technology commercialization. Unfortunately, few incubators--at least on the biotech side--have realized this potential, for a variety of reasons.