© ISTOCKPHOTO.COM/VLADGRINMuch consternation has been voiced about decreases in government funding for scientific research and discovery and what these funding slumps portend for the future of science, as well as for our economy and job market. In March, National Institutes of Health Director Francis Collins told The New York Times that 2013 was “one of his agency’s darkest years ever, with fewer grants awarded and with jobs and programs cut.” In the meantime, funding has also dwindled on another front, as venture capital investors are increasingly placing their bets on more-mature companies with products in later stages of development. According to the most recent EY Medical Technology Report 2013, venture capital investment was down 21 percent from 2012 to 2013, dropping to its lowest level in more than a decade.
Some inventors and innovators find themselves in a difficult spot, having advanced products beyond basic research—so that they do not usually qualify for government funding—but not near enough to commercialization to appeal to venture capitalists. To avoid this mid-stage “Valley of Death,” life-science and technology innovators are spending more of their time searching for new funding sources. The Internet, with its reach and speed powered by social networking, provides a platform for crowdfunding, an area that is expected to grow over the next 10 years. Contributions from angel investors—typically well-connected, wealthy individuals who invest their own money— and incubator sources have doubled since 2007 in the U.S. and increased more than fivefold in Europe. However, these sources have high aversion to risk. There is another ...
