In the generally miserable venture capital environment of that last few quarters, one bright spot has been the health sciences market.\u00a0 It’s one of the area where Colorado can compete effectively<\/a>, and an area where America is well ahead of the rest of the world.\u00a0 It produces actual long-term savings and real quality-of-life and lifespan improvements.<\/p>\n

And the Senate – presumably with the agreement of Colorado’s Bennet and Udall – is getting ready to kill it.<\/p>\n

First, the numbers.\u00a0 VC itself has, not surprisingly, gone cliff-diving along with the rest of investment capital recently.\u00a0 After the dot-com craziness, total VC investment seemed to return to a normal growth curve this century before crashing in the recent downturn:<\/p>\n

<\/p>\n

The one exception to this has been Life Sciences.\u00a0 While well behind last year’s pace, VC in life sciences has recovered fairly well in Q2, to the average over the last 5 years, and close to 2005 levels:<\/p>\n

<\/p>\n

Note the steep drop-off in Healthcare Services VC after 2000.\u00a0 I’m not certain why that’s so, but it’d be interesting to find out.\u00a0 Also note that medical device investment has grown not only in dollars, but also as a percentage of total LS investment.<\/p>\n

While the National Venture Capital Association<\/a> doesn’t provide crosstabs between regions and sectors, it’s reasonable to assume that at least some of Colorado’s growth from 3.0% of venture capital dollars in 2008 to 4.3% in 2009 is a result of our strong biotech sector.<\/p>\n

Now, the Senate is proposing what is, in effect, a national excise tax on medical device sales<\/a>, to help pay for the health care takeover.\u00a0 (Hat tip: TigerHawk<\/a>)\u00a0 Exactly where do they think the large companies come from?\u00a0 Exactly where do they think the large companies get<\/em> their devices to re-sell?\u00a0 They don’t free-ride on this technology, they buy it once the ideas have been developed by smaller, ie, venture firms.<\/p>\n

Brilliant idea, gentlemen.
\n