Since 2009, venture capital firms that invest in life sciences have raised more than $7 billion in capital from limited partners. Top-tier venture firms have allocated hundreds of millions of dollars for device investing in particular. Essex Woodlands has approximately $300 million to invest in the sector, New Enterprise Associates $250 million, and Domain Associates, which raised a $500 million fund last year, estimates it will spend $150 million on medical devices.

Venture capital firms are forming new funds and the 2010 investment level seems to be looking good.  Nevertheless, one CEO of a start-up company recently described an implosion of investments in medical devices. What is missing if a company has a hard time to get the next round of funding? The VCs continue to invest in companies with a track record of demonstrated value propositions for the patient, the physician, the provider and the payor industry. (…read more)