Chapter 20 - Harps for Angels

Abstract

Angels contribute billions of dollars to fund biotechnology in the Valley of Death (VoD), a portion of the more than $24 billion reported funneled into start-ups in 2015. Preserving Angels’ interests is essential, and this must happen within the context of the whole early-stage biotechnology ecosystem. This means making the VoD marketplace as attractive as possible, which translates into improved financial returns. The distribution of money within the VoD is less correlated with innovation per se or a particular technology focus than it is with risk, timing and potential return on investment. Incentives should be aligned to make investment consistent with the long-term, sustainable growth of start-up companies. The failure rate of Angel investments in the VoD is so high that solutions must also address systemic causes for failure. Factors of importance include the regional entrepreneurial ecosystem, the local Angel investment culture, and market saturation of available start-up investments. More needs to be done to measure VoD practices, outcomes, and the effectiveness of economic development initiatives with respect to technology outcomes.