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Venture Funding and the NIH SBIR Program
Venture Capital Investments in Biotechnology
The MoneyTree Survey indicates that venture capital deals in biotechnology are larger than average. The biotechnology sector accounts for 18 percent of all venture capital deals in 2007 and the average size of a deal for the year was $10.9 million. By comparison, the software sector accounted for 17.9 percent of venture capital funding for 2007, with average deal size of $5.8 million. If we combine venture investments in medical devices with biotechnology into a category called “life sciences,” they would together account for over 30 percent of all venture funding in 2007. Given NIH’s focus on life sciences, this data indicates that the SBA ruling on venture capital participation has a major impact on its capacity to use SBIR to advance its mission to develop knowledge about living systems, extend healthy life, and reduce the burdens of illness and disability.
FIGURE B-1-5 2007 Venture capital dollars invested.
SOURCE: Based on data from PriceWaterhouse MoneyTree Survey 2007.
ing for individual firms can be hard to find in a systematic fashion—and data on the impact of this funding is even harder to establish.
To better understand the impact of the SBA exclusion of firms receiving majority venture funding (resulting in majority ownership), the NIH commissioned this empirical analysis by the National Research Council. In this report,