Any device company looking to raise money is probably being frustrated in the endeavor.
Panelist after panelist at AdvaMed's annual conference in Washington, D.C., over the past two days have described how the medtech industry is functioning in a "capital-constrained" environment.
"Lack of capital in the marketplace is pronounced," said Ryan Drant, a partner with NEA (New Enterprise Associates), a venture capital firm, in a morning panel Wednesday. "Clearly this is the least capital that I have seen in my career."
But how low was made clear in a few slides that Scott Weiner, transcational partner at Pappas Ventures, shared with the audience. Here they are (these are taken from a smartphone, so pardon the quality).
The above slide shows the gap between how much money is being invested into the healthcare space, and how much is being raised by those investors from other sources that can be then put to work.
This second slide show how the number of exits defined as companies getting $50 million upfront cash payment by an acquirer is declining.
The third slide actually bodes some good news as the public markets appear to have opened up from the lows of 2008. But there is a caveat....
Most of those initial public offerings are in the biotech space, and not in devices. In fact 2013 is nearly over and there hasn't been a single IPO in the device world.
Given these challenges, one panelist offered one piece of advice that any smart entrepreneur would do well to heed.
"Be very judicious about how you use your capital," said Jeffrey Hoffman, Managing Director, Head of West Coast Healthcare Investment Banking, J.P. Morgan