Q&A talks about bioscience investment with Margaret Cartiera, director of bioscience initiatives at Connecticut Innovations, the state’s quasi-public venture arm.Q: What are some of the key challenges bioscience companies face when trying to raise capital? A: The development cycle for bioscience companies can be a long one, which is why it can be difficult to […]
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Q&A talks about bioscience investment with Margaret Cartiera, director of bioscience initiatives at Connecticut Innovations, the state's quasi-public venture arm.
Q: What are some of the key challenges bioscience companies face when trying to raise capital?
A: The development cycle for bioscience companies can be a long one, which is why it can be difficult to find investors who are willing to invest at the earliest stages of company and technology development.
There are various types of investors (e.g. angels, family offices, venture firms); each has a different “sweet spot” (e.g. preferred investment size, preferred sector, etc.).
Bioscience companies looking for funding do not always understand the nuances of investors, which presents a challenge to the companies seeking funding.
Like startup companies in many industries, bioscience companies often have a hard time articulating what differentiates themselves from others on the market. While the science may be solid, bioscience companies must also be able to show an investor how they will generate revenue and penetrate the market.
Q: At what stage in a bioscience startups lifecycle should management consider raising venture capital?
A: At a minimum, the company should have a minimally-viable product and prototype as well as initial data (e.g., in vitro, in vivo) to validate the approach and the potential of the technology.
In addition, key members of the team who will be fundamentally driving the business on a day-to-day basis toward commercial success need to be in place.
Q: What is the current interest among investors to co-invest with CI on bioscience deals? How would you compare interest in bioscience investment relative to other industries?
A: We have seen an increase in applications across the board, but we have also noticed an uptick in applications related to the bioinformatics and genomics spaces.
While the fund does not require co-investors because we are investing at early stages of development, we are seeing applicants in the bioinformatics and genomics spaces that have already received commitments from other investors.
Q: What does CI's current pipeline of bioscience deals look like? Does CI have enough capital to meet demand?
A: The Connecticut Bioscience Innovation Fund (CBIF) has an active pipeline; we are seeing an increasing number of company prospects with health information technology and medical device concepts.
Yes, we certainly have enough capital to meet the demand. CBIF is CI's newest fund; it is a 10 year, $200 million fund dedicated to the bioscience sector.
CBIF helps to drive innovation in the biosciences throughout Connecticut by providing focused financial assistance to startups, early-stage businesses, nonprofit organizations and accredited colleges and universities. What we do represents just a piece of the bioscience deals being done. CI's flagship fund, the Eli Whitney Fund, also continues to invest in bioscience.
Q: What are you doing to help keep a steady pipeline of bioscience companies?
A: In addition to the outreach we do to academic institutions, non-profit organizations and private companies, we also know that to feed the pipeline, we must start early.
We just funded a two-year, $1 million pipeline project—led by Yale's Center for Biomedical and Interventional Technology (CBIT) with key representatives from Yale University, UConn and Quinnipiac University—that will support company, faculty, and student groups associated with Connecticut universities focused on taking their heir concepts to the next level.
This project provides the needed gap funding to seedling companies and groups, but it also leverages the entrepreneurial resources that exist within the different university systems.
This is the first deal of its kind we are funding through CBIF but it could grow the pipeline of bioscience-related ideas and companies in the state.n
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