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Financings of the Fortnight Puts Its Own Lens on Early-Stage Investments
admin | Jan 27, 2012 | 0 comments
Since we last gathered, dear FOTFriends, end-of-year venture numbers came out. According to the National Venture Capital Association and PriceWaterhouse Coopers, venture cash into biotech was up 22% from 2010, but "first-round" funding volume took a dive to its lowest level in 15 years, with only 153 drug and device companies getting seeded.
Ryan Flinn of Bloomberg News and Luke Timmerman of Xconomy translated that figure into grim news for industry start-ups, with Timmerman enumerating the fears that neither a chastened and constrained federal government, nor Big Pharma, nor other investors have the wherewithal — or the "guts" — to fill the early-stage venture void and turn innovation into products.
It's worth noting that the other big VC data shop, DowJones VentureWire, also released its own year-end totes and came to slightly different top-line conclusions: Total biotech funding (biopharma plus devices), for example, came to $ 7.2 billion in 2011 compared to $ 6.5 billion in 2010, an 11% rise (compared to NVCA's reported 22% rise). There are other oddities, such as DJVW attributing the entire 11% difference between 2010 and 2011 to a jump on the device side — albeit with nine fewer companies funded.
We've pointed out before in this column how hard it is to square the two groups' data sets and sometimes divergent attitudes, so we won't try to figure out who's more accurate this time. But there's one number we'd like to circle: the 153 newly-funded companies tallied by NVCA/PWC and cited by Bloomberg as evidence for an early-stage funding crisis.
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