Downturn Raises Profile of Government and Foundations as Sources of Early-Stage Funding
Grants and contracts can provide financing for ventures too risky for traditional investors
By Linda Molnar
At a time when early-stage life sciences companies face challenges raising money, they are increasingly finding the federal government and foundations can be good sources of non-dilutive funding. This was not always the case. As recent as five years ago, there was a large disconnect between these sources of funding and traditional venture capital, let alone entrepreneurs themselves.
The deep recession that began in 2008 and the significant fall-off in early-stage venture deals and investments have helped to change this. The venture capital world has still not returned to the levels of funding of early-stage life sciences companies of the past years and may never return to those levels given the changes the venture capital industry is undergoing today.
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