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venture funding in San Diego was a fraction of the capital being invested in Silicon Valley and Boston. Today there are roughly half as many VC firms nationwide as there were a decade ago, and a handful of firms account for a disproportionate amount of venture activity. As we reported earlier this year, first-time venture deals are down nearly 43 percent nationwide since 2006, with investments in San Diego and other secondary markets receding even further. So it was only practical for local startups to search for new funding sources in Silicon Valley as some of San Diego’s local springs dried up.
“It’s not a new concept for local startup companies to trek to VCs in the Bay Area,” says Medipacs CEO Mark McWilliams, who accompanied a group of San Diego life science companies to Palo Alto, CA, in the first Connect-sponsored venture roundtable roadshow four months ago. “What’s new is the local venture roundtable putting a group together to go? up there. I think it was a very smart thing for Connect to do. It really says a lot about what a struggle it is in San Diego to raise money.”
The trip paid off for Medipacs, which has been talking regularly with a Bay Area venture firm that attended the session, McWilliams says.
Medipacs was among six life sciences companies that made the Dec. 1 trip, and gave presentations to 10 partners from nine Bay Area venture firms, says Camille Sobrian Saltman, Connect’s president and chief operating officer. “I hadn’t anticipated that level of interest from the VCs,” she says. “I think the economy has been improving, and that helped.”
Biocom, the nonprofit industry group that represents San Diego’s life sciences companies, has been approaching the problem differently, according to CEO Joe Panetta.
“We bring three or four out-of-town VCs in [to San Diego] for the day,” Panetta says. “We pair them with companies for … Next Page »