Midwest
health care technology luring
greater investment focus
Laptop Battery By David Niles • 09/12/05
Venture capitalists are increasingly interested in
health care technologies
developed in the Midwest, results of a new national survey show.
Wisconsin, however, only rated in the middle tier for its
reputation among health care investors.
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Thinkpad About two-thirds of the survey respondents have their primary
offices in the Midwest, and three-fourths of the respondents said
they have invested in at least one Midwest health care deal; 65
percent said they see more than 25 investment opportunities from
the region each year.
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Microsoft The report is further evidence that efforts to attract venture
capital to the Midwest are paying off, said Dr. William Hendee,
president of the MCW Research Foundation and dean of the Medical
College of Wisconsin's Graduate School of Biomedical Sciences.
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Laptop Computers "Things are certainly looking better here than they were three
to four years ago," Hendee said of the venture investment
scene.
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Laptop Computer The survey, by Cleveland-based Bio-Enterprise, was conducted
over a 10-day period beginning July 26, asked respondents to offer
their impressions of Midwest health care investment opportunities
and regions. Among its findings:
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Desktop Computer Venture capitalists rate the performance of their Midwest
investments as equal to those in the rest of the country and they
consider the region's bioscience strength to be in medical devices.
About 50 percent of investors rated medical device deal flow as
"strong" or "very strong" and a majority said deal flow from the
Midwest is increasing.
Notebooks Health care services and IT opportunities were rated by 68
percent of investors as average, while biopharmaceutical offerings
were considered weak by 67 percent of respondents.
Lenovo Within the Midwest, the Minneapolis, Cleveland, Pittsburgh and
St. Louis regions have the strongest overall reputations among the
health care investors. The middle tier consisted of Chicago,
Wisconsin, Detroit-Ann Arbor, and Indianapolis. Cincinnati and
Kentucky were rated lower for quality of deal flow.
Hard Drive Ratings changed only slightly when adjusting for investors'
areas of focus within health care. For example, those funds that
plan to dedicate more than 50 percent of their investments in
health care services and software, rated the top regions for deals
as Minneapolis, Chicago, and Cleveland. For biopharmaceutical
focused funds, the top-rated regions were Minneapolis, St. Louis,
Cleveland, and Indianapolis. Chicago was ranked last among all
regions by the biopharmaceutical focused respondents.
Travelstar "Given the respondents' knowledge and depth of health care and
Midwest investments, the survey provides insights on the Midwest's
areas of strength, both in types of opportunities and specific
geographies," said BioEnterprise President Baiju R. Shah. "What is
encouraging is that nearly 60 percent of the respondents felt that
deal flow from the Midwest has been increasing, and nearly 90
percent indicated interest in expanding their Midwest activity.
That bodes well for continued growth in health care venture
investment across the Midwest."
Gateway The Medical College of Wisconsin's Hendee cites a growing
national recognition that the Midwest, especially the Chicago to
Minneapolis-St. Paul area, is the source of investment-attractive
health care technologies.
Laptop Parts Hendee also sees increased competitiveness among players in
venture capital
markets as another reason for
the heightened activity. "They're no longer simply focusing on
the coasts," he said. He credits efforts to lure investor
attention here and efforts to link venture capitalists with
innovators for giving investors a wider arena of activity.
Software Forty-seven (47) national venture investors, almost all who have
significant health care focus within their funds and are active in
the Midwest, completed the survey. BioEnterprise plans to conduct
the survey annually. Complete survey results and analysis can be
viewed at http://www.bioenterprise.com/reports/reports.html.
Hard Drives David Niles is senior contributing editor for WTN. He can be
reached at dniles@wistechnology.com.
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