The success metric for an investor and partnering conference is unambiguous, a company must achieve either an initial inquiry of interest or secure a follow-on meeting. Using such a performance metric illuminated a very satisfactory grade for the presenting CID4 portfolio companies. The Rocky Mountain Life Science Investor and Partnering Conference was more than simply a CID4 showcase, what transpired at the historic Brown Palace Hotel was the culmination of a biocluster clearly on the rise. Colorado had an important opportunity to spotlight their diverse array of high-impact technologies and high-quality intellectual capital, and put a stamp on the Rocky Mountain region as a bioscience node that demands the attention of industry and investors. A quick scan of attendees validates that the Front Range deal flow ranks on par with any other cluster across the U.S..
Despite catalyzing investor and partner interest a dose of reality is necessary coming out of the Conference in order to remain grounded regarding the state of fundraising for early-stage technologies. One investor candidly shared, “We are not financing innovation, we are transaction oriented.” This observation does not come as a surprise, rather it is largely indicative of the challenges faced by early and innovative companies as they face the unique spectrum of challenges and risks associated with moving a medical technology along its development continuum.
The current investor climate then begs the question of who will finance innovation if it is not private capital. A Conference take-away is that a combination of governmental granting agencies, philanthropic donors, visionary angels and entities such as CID4 must bear more of the burden of de-risking early-stage technologies. CID4 continues to bring an innovative approach to aiding Colorado’s early-stage companies, which goes beyond simply writing checks.
In presentation after presentation, thirty-one in all, an additional common denominator was echoed, the prospects for employment are robust, provided sufficient funding is obtained. The number of companies detailing their need to fill out their management teams evidenced this opportunity for Colorado job growth.
And while many are aware of one particularly glaring capital quandary – that being no IPO market (which reduces liquidity opportunities for VC and in-part has led to the pursuit of much later, de-risked technologies which ultimately severely reduces early-stage investment) – many are missing the fact that restrictions on more traditional lending relationships has resulted in even greater financing challenges for early-stage businesses. In prior times, growth capital was commonly obtained through revolving lines of credit or short-term notes from banks and other financial institutions. Today, these same institutions have too become more risk averse, meaning early-stage, rapidly growing companies remain more and more dependent upon private investors for decisively longer periods than in the past. This capital squeeze has further contributed to the "Valley of Death" widening and deepening. If we are to remain globally competitive in the increasingly competitive technology driven economy, we must find ways to bridge this gap. CID4 and organizations like us around the country are trying to build the public/private collaborations that are necessary to provide the fuel for innovation – capital.
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