January 20, 2008
Venture Capital Biotech Investments Surged In 2007

Venture capitalists see biotechnology as about to take off.

Venture capitalists pumped a record $9.1 billion into privately held U.S. biotechnology and medical device companies last year, in hopes of making discoveries they can sell to larger drugmakers.

Biotechnology and medical device companies raised 20 percent more cash in the U.S. last year than in 2006, according to a report by accounting firm PricewaterhouseCoopers and the National Venture Capital Association.

This bodes well for the development of rejuvenation therapies. Biotechnology is going to advance much more rapidly with lots of venture capital investments flowing into start-ups. The amounts of money getting invested suggests the venture capitalists think biotechnology has finally advanced far enough that it can really start delivering large returns on investment.

If you look at the chart on page 3 of the full report (PDF) you will see that the second quarter of 2007 (2Q 07) was a stronger quarter than 3Q 07 for venture capital investment overall and for biotechnology and for medical devices and equipment.

But you will also notice one category is leaping upward very rapidly: Industrial/Energy. It nearly doubled from $543 million in 2Q 07 to $921 million in 3Q 07. That puts it close to the $1,091 million for biotech in Q3 07. High oil prices are probably causing a shift of investment from biotech and other areas to energy. As we move past the peak of oil production and the world decline of available oil starts to take hold that shift could intensify. So Peak Oil is an obstacle to the development of rejuvenation therapies.

Share |      Randall Parker, 2008 January 20 04:02 PM  Biotech Advance Rates


Comments
Nick G said at January 20, 2008 7:14 PM:

" Peak Oil is an obstacle to the development of rejuvenation therapies."

Yes. Climate change and Peal Oil mitigation will distract us from many other important things, especially longevity R&D.

Sigh.

rsilvetz said at January 20, 2008 8:56 PM:

Just as an aside, I'm not sure what "take off" means in this context. Total venture is a little over one-half what it was in 2001....

averros said at January 20, 2008 9:55 PM:

Oh, VCs are in business of wasting other suckers'^H^H^H^H^H^H^H^H people's money in hope of hitting it big once in a blue moon. They win if they manage that feat, and don't lose anything if they don't.

So, what we see now is a campaign of recruiting new suckers^H^H^H^H^H^H^H^H limited partners seeking to stuff money which is quickly depreciating in a place promising positive returns (stock market didn't for a long time - when accounted in XAU, not some green-colored TP; the real estate is similarly going down the toilet, and forget about T-bills and bonds). Yes, the influx of suckers in this segment is taking off.

(Hint - startups funded directly by individual investors (aka "angels") have much better chances of survival than VC-funded, precisely because interests of angel investors (such as longer-term growth) are not the same as VCs (pump-and-dump speculation)).

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