Ebb & Flow

In 2005, the size of a typical series A round has been $15.1 million - roughly 50% higher than previous years. August saw a flurry of even larger A rounds for preclinical companies, which is surprising because VCs have been grumbling about the problems getting a return when they fund companies that aren't yet in the clinic.

But Alta Partners and HealthCap, both of which were involved in two series A rounds of at least $30 million, maintain that bigger may be better, as a large initial financing should get their companies deep into the clinic without having to raise more money. Thus, the VCs argue, avoiding dilution means they'll get to keep a larger piece of the pie when a value-creating event - Phase II data - is reached. ...