In a breakout session featuring five experts on a life sciences financing panel entitled, “The Evolution of Capital: New Sources of Financing in the Life Sciences,” the panel laid out the capital landscape where the question is how and with whom. The group discussed how venture capital has evolved for life science companies and how life science companies can adapt to the changes.
Not that things are bleak, new sources of capital and financing models provide more options than ever for emerging life science companies. It was not hard to see how much this touched a nerve. The session was “sold out” with a waiting line of attendees outside the door.
Kathy Conte, managing director of life sciences at Hercules Technology Growth Capital said that they will not invest without an institutional investor. Basically, they piggyback on the due diligence of venture capital groups so they don’t have to expend the money for their own review. This is out of necessity since they have done 120 deals in 4 years while a VC group might do just 2-3 big deals a year.
Jeff Edelmann, co-founder of Symphony Capital, noted that they have found many more ways to get their money out of a deal. Citing one example, he explained how one company was unable to get a full buyout but they then found another company that had an interest in the intellectual property of the target. They were able to pull their investment out by trading the IP for a large minority stake in the other company.
All this points to the need for entrepreneurs to be as flexible as possible.