VPOs into the breach

Biotech startups have been complaining that the venture community is less willing to fund very early stage technologies than in the past. As a result, there is a gap between academic discoveries and the translational research needed to get novel ideas to the point where they are considered commercial opportunities. Helping to fill that gap is a small number of biomedical venture philanthropies, which are funding young companies that are too early-stage to attract VCs, as well as supporting certain kinds of research in academia - such as biomarker work - that should help in discovery and development.

One attraction of venture philanthropy organizations (VPOs), which typically are formed by wealthy individuals or families that are focused on a particular disease, is that they provide non-dilutive financing. The U.S. government, largely through NIH, has been the main source of such non-dilutive money. Although VPOs don't have nearly as much capital to put to work as the government, they offer other advantages, including a network of thought leaders for a disease and a willingness to fund a variety of research approaches. ...