Investment Trends in Series A and B by Major and by Micro US Venture Capital Firms

Reporters: Gerard Loiseau, ESQ and Aviva Lev-Ari, PhD, RN

 

Introduction by Gerard Loiseau, ESQ

The Future of Funding for Early-Stage Start-Ups in the Healthcare Businesses

 

 

• Is Smart Money Pulling Back From Early-Stage Start-ups and if the answer is Yes, why ?

1. In an article as of Monday, 02 February 2015 originally posted on GigaOM,

• Bryan Dow, Executive Director at Mooreland Partners was talking about M&A and 3D Printing Collide.
• As part of his expose, he talks about “the financing: filling the gaps” where he explains that “Strategic investors also currently consider 3D printing to be ‘non-investable’ due to the long lead time for business development. Size plays an important role, too. 3D printing companies just don’t have the revenue or EBITDA necessary to fit the threshold requirements.”
• So how are Early-Stage Start-ups funding their development in the 3D Printing business ? Mainly Crowdfunding is the answer with companies like Kickstarter and Indiegogo.

2. In an interview at McKinsey & Co., Eric Schadt, M.D., founding director of the Icahn Institute for Genomics and Multiscale Biology at New York’s Mount Sinai Health System, says questions will become easier to answer as more data is pulled together.

• How big data will cause an evolution in medicine
• November 24, 2015 | By Susan D. Hall
• He says: “Technology is revolutionizing our understanding and treatment of disease”
• Evolution? Revolution?
• Big Data will help to build predictive models by aggregating more and more information from all the components of a disease.

• It is evolution but will be very fast a revolution.

• Big data are always used by Google, Amazon, (—), and the same processes can be applied to medicine. (The first subsidiary of Alphabet is Life Sciences Group@Google, now Verily)
• About Wearables.
• Mobile health apps utilization represents the future, and wearable-device allows anyone to manage one’s situation and/or to be managed in case of deviations from the “baseline”.

• Big Data, patients, payers and pharma.
• It introduces a partnership with the Patients, who will get a dashboard about their health situation.

• Payers will be able to control the slide into a disease state and so to save money.
• They will get better risk profiles.

• Device makers can taka advantage of this new business model.

• Pharma will be able to better understand the causal players of disease.

• Talents
• Experts have to be recruited according to this nearby new “ecosystem”
• Translation will be a key item.

• A major problem is the transformation of the life sciences, driven by this quantitative, statistical, computational model.

• Mathematics and computer science will be essential.

3. Gina Hall , Contributor, Silicon Valley Business Journal, says : Startup founders may have to work a little harder for funding as top venture capital firms pull out of early stage investing.

• Gina Hall mentions a CB Insights report « The investment research firm said there were only 67 angel and Series A deals in the third quarter of 2015, the lowest quarterly count since the fourth quarter of 2010, which saw 64 deals”

• Bill Maris, president and chief executive of Google Ventures and Andreessen Horowitz both said that they scaled down seed investments about two years ago.

• They do consider that the number of candidates is increasing in huge proportions.

4. Tess Townsend, Staff reporter, Inc.com@Tess_Townsend says : ‘Smart Money’ Is Getting Scarce for Startups

• Investment in tech is rising, but less and less money is coming from top venture capital firms. What do they know that everyone else is just figuring out?

• “Filling the place of smart money venture capitalists are investors with less experience in the market, such as mutual funds better known for public-market investing,” states The Information.  

5. Digital Health : CB Insights October 5, 2015

• Smart Money VCs Are Picking Up The Pace In Digital Health …

• “Four of the last 5 quarters have seen more than $200M in digital health financings involving the top 20 smart money VCs.”

• Even if CB Insights comments on December 14 :

• Data points on active corporates:
• “The number of digital health investments in total was small, with pharma corps with only 28 deals involving pharma corps since 2013”

6. Healthcare Start-ups Boom: 2015 Could See More Than $12B Invested Into VC-Backed Companies : CB Insights September 1/, 2015

• There have been more than 400 healthcare deals in the first half of 2015, and the year is on track for a five-year high in funding.

 

 

Investment by Blue Chip VCs
	Series A	Series B	Private Tech Global Financing	First 9 month Stage A Funding	# of Seres A Rounds
	%	%	$	$Billion	# of Transactions
2012			137.4
2013	7.5	11.4	165.2	2.0	243
2014	6.1	11.2	278.1	2.0	219
Est. 2015	5.3	9.0	241.7	1.3	115
SOURCE	SignalFire, San Francisco
COMMENT: That growth is occurring in later-stage companies, series B and later; funding in the seed and series A rounds is down 20.5% and 28% in the first nine months compared with the same period last year, respectively. DEFINITIONS by SignalFire:                                                   Series A: $4 million and $12 million

 

Investment Firm Type by Name  14 “micro” VCs and 15 “major” VCs
Major VC	Micro VC
General Catalyst Partners	Harrison Metal
Khosla Ventures	Lerer Hippeau Ventures
Kleiner Perkins Caufield & Byers	O’Reilly AlphaTech Ventures
Lightspeed Venture Partners	Y Combinator (Accelerator)
New Enterprise Associates (NEA)	Forerunner Ventures
Redpoint Ventures	Red Swan Ventures
Spark Capital LLC	Lowercase Capital
Sequoia Capital	Baseline Ventures
Greylock Partners	Crosscut Ventures
Founders Fund	Data Collective
Union Square Ventures	First Round Capital
Andreessen Horowitz	Founder Collective
Accel Partners	Floodgate
Benchmark	Felicis Ventures
Bessemer Venture Partners

SOURCE

https://www.theinformation.com/smart-money-pulls-backs-from-early-stage-startups?unlock=92821f&token=2053453a7297bdd5b8a501d6ea4fea0d4e1d2cbe

 

Conclusions by Gerard Loiseau, ESQ

• Start-ups will have to adapt to these new challenges.
• The biggest evolution is linked to Big Data and so to the New Entrants like Alphabet and Apple.
• They are designing the future and the Cloud is their battlefield, following the pioneer, Amazon.com
• People will wear the sensors allowing to identify variation in vital signs and indications of the state of their diseases. The transmission will be done through watches and other mobile devices in the Internet of Things (IoT) to the cloud and they will get a direct ping as their answer.
• Labs and hospitals will be managed by their IT Data managed trough out the Cloud.
• The New Entrants will create THEIR own “medical centres”  that will be Virtual.
• They will provide the data, infrastructure, information and training to all the constituencies including Patient’s access to EMR.
• Intelligent Medical Centre will operate the representation of completely reshaped existing workflows.
• Start-ups will have to adapt to these new challenges by embracing the new reality.

The following article concerns trends seen in early round investment landscape in the United States, focusing on Seed Round and Series A and B Venture Capital and can be read at

Source: http://tomtunguz.com/us-it-fundraising-early-2016/?utm_content=bufferd960d&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

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