Why Have a Biotech Venture Fund?

By Paul Kedrosky · March 20, 2007 · ·

I was playing with some CalPERS venture investing data today while on planes. I decided to split the data into pre-2004 vintage non-biotech and biotech funds. The results were as follows:


Multiple
IRR
Biotech
0.33
1.9%
Non-bio
0.58
3.0%

Related posts:

  1. Something Strange About Biotech Venture Investing
  2. Boxers or Briefs: Biotech versus IT
  3. A New Venture Fund Bubble?
  4. Happy Biotech Days are Here!
  5. Why Invest in Biotech?

Comments

  1. Don Dodge says:
    March 21, 2007 at 4:16 am

    Paul, I’m not sure I understand the results. Does multiple mean the return multiple on money invested? Meaning, 1.0 just gets your money back with zero return and 1.2 gets it back with 20% return? If so, .33 and .58 don’t even make back the invested cash.
    IRR’s of 2% and 3% aren’t as good as US Savings bonds.
    I agree the VC investment business has been pretty tough the last 6 years. Only the very top VCs are generating returns. I created a table of raw investments and returns through IPO and M&A transactions over the past 6 years. There wasn’t a single positive return year. For more details see http://dondodge.typepad.com/the_next_big_thing/2007/03/venture_capital.html
    Paul, I know you read my earlier post. Does your research confirm my results?
    Don