VC Market Drying Up For Emerging Medtech Firms

Julie Bird | FierceHealthIT | October 4, 2012

Start-up medical-technology companies are finding it harder to raise venture capital, thanks to "an anemic IPO market and ever-more selective buyers," Ernst & Young says in a new market report.
"Even though the overall level of venture financing has remained relatively steady since the financial crisis, the challenges have squeezed VCs' returns on investment and driven them to invest in more mature companies that offer the promise of quicker, more predictable exits," according to the management firm.
A few early stage companies that stand out from the crowd because of factors such as "novel technologies or proven management" might be able to buck the trend, but that won't be the case with many medical technology companies, according to the report. Technologies delivering only marginal cost benefits or improvements to existing technology could be out of luck when it comes to early round financing.