At a talk sponsored by the Mid-Atlantic Venture Association, former MedImmune CEO turned venture capitalist David Mott said earlier this week that the venture capital crisis has likely bottomed out, and that the industry can look forward to an easier VC environment in the coming months. But both venture capital firms and the biotech companies that rely on them still face a tough road.
"Three years from now, there will be one-third as many venture capital firms as there were three years ago," Mott predicts. "And there will be half as much money." The lack of funding will make it harder for companies with less promising programs to raise capital. Ultimately, this will lead to a leaner but stronger biotech industry.
More selective VC firms will place a greater emphasis on groundbreaking early-stage projects, prognosticates Mott, while later-stage developers will face higher hurdles for gaining cash. "I think there's going to be a surprising shift to the big idea, science-based companies, sort of where we were 20 years ago."
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