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Q3 Venture Funding decreases with Biotech awarded $943.7M

Venture capitalists invested $943.7 M in biotech startups during Q3/10. Overall, 1st round financing rose nearly 60% to $1.2B and 255 companies got their 1st financing in Q3/10, compared with 176 in Q3/09.

  • Most of these deals were with companies in the seed and early stages of development, which is consistent with past activity.

More startups in the expansion and later stages of development got funding than last year, and as usual, companies in these 2 stages received the bulk of funding.

  • This comes as the market for acquisitions and initial public offerings for mature startups continues to be rough, which means venture capitalists are likely to be waiting for quite some time before profiting from their investments.

The number of startups in the seed stage that got funding dropped 11%. Companies in the early stage of development that got funding climbed 21%.

  • This seems to show that investors are being more cautious about investing in wholly new ideas but remain interested in putting money toward younger companies that still have a lot to prove.

The study, which was conducted by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.