Invent, Invest and Innovate are strongly related within the VC
world. However, the way that these concepts relate to each other
is continuously evolving, markedly in cutting-edge sectors such as
biotech and Healthcare.
Boston is one of the most dynamic and sophisticated hubs for
Medtech nowadays. Top professionals, universities, investors and
blue chips swirl around creating a new, well-organized movement
that fuels an innovation engine without parallel anywhere.
This movement is called "Convergence" and it is
opposed to the iterative process that physicians and manufacturers
have traditionally followed to develop new Medtech products.
Convergence disrupts this incremental cycle with dynamic change in
methodology and practice for the detection and treatment of disease.
VC funds are relentlessly adapting to this new innovation
paradigm following an approach that allow them reduce cash
requirements, apply proprietary deal flow terms&conditions and
achieve early to mid-stage exits through M&A. This approach is
directed through limited partnership funds rather than large
syndicates, which usually require multiple follow-on financings.
All in all, this new scenario provides wealthy families and
mid-sized institutional investors with investment opportunities
that offer unmatchable returns. Current projections call for some
funds to provide 2x cash-on-cash return and a SI-IRR of 12-14%
during a time when overall market returns on a compunded
annualized basis have been around 6%.