Originally Published MX May/June 2003

FINANCE

Outsourcing company capabilities offers a viable strategy for advancing company objectives—and increasing company valuations—in tough economic times.

Stacey L. Bell

Start-up medtech companies are known for their great product innovations, so it shouldn't be surprising that smaller companies are applying that innovation to their business models as well. After all, the availability of venture capital isn't what it used to be during the go-go 1990s.

In 2002, 542 privately held biotechnology, pharmaceutical, medical device, and other healthcare companies raised $6.3 billion in venture capital, according to Growthink Research (Venice, CA).¹ Those figures reflect a slight decline from 2001, when 610 healthcare companies raised $7.1 billion. However, the 2002 healthcare companies snagged 25.7% of the total venture dollars invested nationwide compared with 15.8% in 2001, demonstrating that investors are still interested in the sector even though fewer dollars are being committed (see Table I).

A Challenging Investment Climate