Top Venture Capital Firms

by Maureen Martino and Calisha Myers

We here at FierceBiotech regularly chronicle the largest venture capital deals in biotech. It's a great way to keep an eye on up-and-coming companies with groundbreaking programs in their pipelines. But every time we release a venture capital report, at least a few readers ask us for something else: an in-depth look at the venture capital firms behind the funding that supports these small companies. So with the help of data from the National Venture Capital Association, we've compiled a list of the most active life science investors. The 17 firms on this list have done 14 or more deals since the beginning of 2008. The largest biotech investor--Domain Associates--has participated in 41 deals in the last year and a half.

The VC firms on this list include both life science-only firms as well as groups that invest in a variety of industries. In the process of our research, we spoke to a number of venture capitalists about what they look for when they choose to back a company. Despite the diversity of the firms, some clear trends emerged:

• All the VCs agreed that having a strong management team that investors trust is one of the most critical factors when choosing whether or not to financially support a new company. Many VCs even had a list of entrepreneurs or academics they'd worked with numerous times.
  
  
• Times are changing, and our healthcare system is likely to undergo a dramatic shift in the coming years. Less emphasis will be placed on incremental improvements to existing drugs. Rather, in order to have a successful drug program, biotech and pharma companies must develop game-changing therapeutics. VCs are taking this into account as they select their investments now; they're most interested in funding companies with advancements that address unmet medical needs.
  
  
• While VCs are being selective with their money, the economic crisis hasn't has a substantial negative impact on their activities. For one thing, biotech investors are in it for the long haul--they're not very susceptible to short-term problems. In fact, biotech's desperation for cash has led to better deal terms for VCs. And companies that do secure funding are using it wisely, since they can't afford to waste money anymore. In many cases, the cream of the crop are able to raise funding while less promising ideas fall by the wayside.

So without further ado, take a look at this list of the most active biotech and pharma life science investors.

1. Domain Associates [1]
2. HealthCare Ventures [2]
3. Polaris Venture Partners [3]*
4. MPM Capital [4]*
5. Alta Partners [5]
6. ARCH Venture Partners [6]
7. Flagship Ventures [7]
8. SV Life Sciences Advisers [8]*
9. Sanderling Ventures [9]*
10. Kleiner Perkins Caufield & Byers [10]
11. InterWest Partners [11]*
12. Sofinnova Ventures [12]*
13. Burrill & Company [13]
14. New Enterprise Associates [14]*
15. OrbiMed Advisors [15]
16. Quaker BioVentures [16]
17. Venrock Associates [17]*

* Indicates profiles with interviews