A Recent Article in FierceBiotech, http://www.fiercebiotech.com/press-releases/venture-capital-investments-decline-dollars-and-deal-volume-q1-2013-accordi?utm_medium=nl&utm_source=internal, highlighted the challenges life sciences companies face raising capital from venture capitalists.
This fragmentation of capital flows is often referred to as the "Innovation Gap" since many venture capitalists are not focused on early-stage investments. The tide is turning given Atlas Venture and GSK's/Avalon's recent announcements of new funding activity in early-stage investments, however, the environment is still problematic.
Crowdfunding may be an financing vehicle for filling these "Value Voids" by enabling companies to access capital from Accredited Investors and Family Offices through easy-to-use web interfaces (~HealthiosXchange).
For more information on HealthiosXchange please click here.
From FierceBiotech - "Another quarter brings more abysmal statistics for venture investment in biotech. The VC industry turned in bleak numbers for biotech deal-making in the first quarter of 2013, with one key measure of early-stage activity in the life science sector falling to its lowest level in almost 18 years.
Numbers plummeted down to new lows for the decade and the 21st century in life sciences (biotech and medical devices), according to the MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association based on Thomson Reuters data. The report compared deals from the first three months of 2013 with the fourth quarter of 2012, finding overall declines of 12% in dollars and 15% in deals across all industry sectors, which hauled in a total of $5.9 billion in 863 deals.
Yet the declines in biotech were way steeper than the overall drops. While biotech companies fetched the second-most amount of money in the venture industry with $875 million through 96 deals, total dollars in the sector plunged 33% and the number of deals dropped by 30% in the first quarter compared with the last three months of 2012. The 23% drop in life sciences deals was the lowest since the first quarter of 2009, when the national economy was imploding.
For biotech companies and other healthcare outfits grappling with capital shortages, execs face some tough choices about how to advance research programs, said Michael Greeley, a general partner at Flybridge Capital Partners in Boston, and a board member at the NVCA, via email."