On December 3, 2009 Menlo Park at Orrick, Herrington & Sutcliffe LLP the San Jose BioCenter presented “Trends in Financing.” Investment experts explained the types of financing available in 2010. Stephen Venuto of Orrick moderated panelists Sarah Bodary of SV Life Sciences, Doug Fisher of InterWest Partners LLC, Jim Long of Gabriel Venture Partners and Janis Naeve of Amgen Ventures. Text from DJCline.com.
This biggest trend in financing over the past year is that venture capitalists have raised the bar for startups. Pitch the basics of target and competition on the first page. They are looking for therapeutic and platform deals with people they know. Biotech is still a new industry and because of that it is capital intensive. Startups must be very capital efficient with positive cash flow. For instance, on ten million dollar round, they might get three million until they reach a tranch milestone and before getting another seven million dollars. Exits to IPOs are rare leaving startups fewer choices like selling to big pharmas or speciality pharmas. Startups should remember that VCs want you to succeed and be happy with 60 million dollar exit.
Most interesting were the companies supplying goods and services to the biotech industry. San Jose BioCenter displayed pictures of its new incubator labs. BDO offers accounting and compliance advice. BioSurplus offers cool equipment from microscopes to centrifuges. Mentara works with drugs, biologics and devices.
Copyright 2009 DJ Cline All rights reserved.
