Every venture firm claims to be looking for great companies to support. The reality is that many have no money for new investments, having reserved their remaining cash for their current portfolio.
How can a medical device entrepreneur find the firms that have the capacity for new investments? How can an entrepreneur find fresh money? Wouldn’t it be great if someone created a list of life science venture capital firms that have recently raised money?
According to the Boston Globe, the top New England venture-funded sector in Q1 2011 was medical devices and equipment, at $145 million. That’s great news and a testament to the local medical device innovation economy.
On the other hand, life science venture capitalists in New England closed no new funds in Q1. That’s not great news. There has been some fund-raising activity, so we can hope for a better Q2. In fact, Bessemer Ventures closed a $1.6B fund in early April, which will include medical devices as a target investment sector, so Q2 is off to a good start.
On his blog, Michael Greeley recently wrote “My guess is the VC industry will have raised between $10 to $12 billion in 2010 ($28 billion was raised in 2008). From 2008 through 2011 we will have witnessed the VC industry being cut in half.” Ouch.
Less money raised means fewer deals will be done. In addition, longer times-to-exit force VC’s to reserve larger portions of their funds for each portfolio company. For medical device startups, the fundraising environment is as rough as it has ever been.
All the more reason to raise money from VC’s that have relatively new funds. These new funds have longer time horizons, and don’t have to support past (aging) VC firm investments. How do you find these funds?
Fresh money is the best money. Fresh money means that VC’s and PE firms need to make new investments, to put their fresh money to work.
Here’s my list of Life Science VC and Private Equity Fundraising for 2009 and the first half of 2010, culled from news articles over the past 18 months. Enjoy.
My list is likely not comprehensive, as firms don’t always announce new funds. I plan to post updates to this list quarterly. Also, I plan to make a table of 2008 and 2007 vintage funds for an upcoming post. Leave a comment if I am missing a fund raise in this table, and I’ll update it.