Venture capital firms are largely staying away from biotech, says Forbes' Bruce Booth. Reduced capital is a cyclical issue, and even with the problems in the biotech sector, bioentrepreneurs are still raising billions of dollars, he says. But what's really concerning is that the number of venture firms investing in biotech is shrinking and they're becoming less diverse. "Even in a capital constrained world — and clearly the data suggest biotech venture is getting leaner — one of the biggest constraints on the ecosystem is the bandwidth of individual, active investors: what new startups are you working on forming, how helpful you are to the entrepreneurs you're backing, what existing portfolio companies do you spend time on, how effectively are you leveraging your network for the portfolio, how many frogs (new opportunities) are you kissing, etc. …," Booth says. "And as an active investor looking for syndicate partners in our portfolio, the dwindling 'available bandwidth' of the biotech VC universe is a real concern." Unfortunately, he adds, this is unlikely to change soon.
The Case of the Missing Venture Capital
Jul 26, 2012