Investment: Los Angeles, lagging in venture funding, could leverage its research expertise, report concludes.
Excitement over the mapping of the human genome is whetting investor interest in biotechnology start-ups, which had been overlooked in the dot-com craze. Venture capital investment in biomedical firms rose during the fourth quarter of 2000 and is expected to continue its march upward this year.
Total venture funding is expected to increase beyond the $1.75 billion invested in 2000, according to PricewaterhouseCoopers and VentureOne. Much of the money was funneled into Silicon Valley, the Boston area, San Diego and North Carolina’s Research Triangle, a pattern unlikely to change this year.
What is different, experts say, is the optimism about biomedical investments, which can take several years to pay off for investors. Nearly 90% of Silicon Valley venture capitalists plan to increase or continue their level of investment in biotech, according to a recent survey by Deloitte & Touche, a consulting firm. That’s more enthusiasm than venture capitalists had for other high-tech businesses, including wireless communications, software and e-commerce.
How this will benefit nascent biomedical firms in Los Angeles remains to be seen. Historically, local businesses have received significantly less support than those in Silicon Valley and San Diego, where venture firms with a taste for esoteric biomedical research are located. Those regions also receive more funding for medical device start-ups, though the Los Angeles-Orange County area is the runaway leader in that field.