Monday, December 5, 1994
When the financial markets went south a couple of years ago,
a few prescient members of the venture community began rethinking their strategies
for building and funding new companies. Others held off, however, in the hopes
that the financing window would come back as before, and everyone could return
to business as usual.
While the window certainly will come back in some way, shape
or form, the venture funds no longer are counting on it to the same extent as
in the past. And if a survey of nine venture capitalists is any indication,
the transformation of thinking in this group is now complete.
Many of the new themes are focused on lowering the costs of
getting to a return on investment. They range from setting up companies with
limited infrastructure, to more partnering, to moving work overseas to cheaper
labor centers and countries with faster-moving regulatory authorities.
This new thinking encompasses three broad categories: starting
companies, building companies and exiting companies.
The venture community is being far more selective about what projects it's choosing to become full-fledged companies. No longer is it the case that every idea will have a shot at becoming a fully integrated biopharmaceutical company. In fact, they're avoiding the Fibco model altogether.