What are the trends in funding early stage life science companies? A panel of seven investors speculated on the 2015 outlook, at a December 10th Venture Summit held in Dedham yesterday.
Riding an increasingly robust funding of transactions at the seed and A-round levels, the investors anticipate continued strong deal flow, driven by a reduction in the funding generally sought by start-ups. They speculated that this reduction was driven by more refined pitches and reliance on internet tools that make start-ups more flexible and efficient. Not mentioned, but perhaps another factor, is the sea change in the manner in which bio and bio-pharma companies are developing their products, in reaction to the massive capital requirements which caused negative investor reaction several years ago.
Hot areas anticipated are oncology, ocular disease, orphan diseases and, in the long run, genetic modification. One panelist, interestingly, suggested that capital is being scared off mass drug development because of the risks of liability arising from continued application of drugs to larger numbers of people over a multi-year period.
What company attributes are attracting capital these days? Robust teams. Proof of recurring revenue. A crisp story presentation. Avoidance of undue complexity (blamed on the lawyers, of course). And, although it can come in many forms, that elusive quality known as “traction.”