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Device VCs Choose Flight, And Fight, In Face Of Challenges

This article was originally published in Start Up

Executive Summary

The entire venture capital industry is facing difficult times. But few are taking as hard a hit as medical device investors. In our survey of 100 institutional and corporate VCs, 65% of the venture capitalists who said they invest primarily in medical device companies say they’re feeling “negative” about “the current state and future of VC.” Only 17% say they feel positive, with the remainder feeling neutral. Not surprising, device VCs’ worries center around limited partners and the FDA. Limited partners are demanding strong returns before re-upping with new funds, and the FDA, while improving, is holding a firm line in issuing new approvals. Device VCs keep looking for innovative technologies and waiting for opportunities to improve.

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Venture capitalists still might find medical devices to be among the more difficult sectors to place their money, but the overall mood of device investors is improving. Device VCs are encouraged by increasing opportunities on Wall Street along with interest from corporate investors, but limited partners and the FDA remain primary concerns.

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