It seems that the recession is affecting nearly every Coloradoan in one way or another. For a new bioscience company, their biggest problem was financial. The company was in need of a venture capitalist to assist them in getting their company off the ground. However, a venture capitalist could not be found to help them with their startup costs. Instead, the Colorado Institute for Drug, Device and Diagnostic Development (CID4) was able to help.
This nonprofit organization was started by the state of Colorado to help in the advancement of the bioscience industry within the state. This is good news for companies just starting up and for venture capitalists. The financial output that a venture capitalist may have to dole out has been partially covered. This opens the door for later investment into the company after some establishments have been realized.
Although some professionals claim the lack of venture capital is a problem, the CID4 has been able to step in and help many companies in their infancy. For the new bioscience companies starting up, this is not to say that venture capitalists are nonexistent. They simply do not step in as early in the growing stages of a company as they used to. This is likely for their protection considering the state of the economy right now following the recession.
Although the CID4 was created to help with startup costs, there is still a need for venture capital and there are still many venture capitalists that are willing to invest. Anyone that is considering this type of investment or seeking such may benefit from retaining an experienced attorney in business and commercial law. A knowledgeable attorney may be able to help both sides in understanding what their rights are and the best moves to make in order to protect the people and the investments that they are making.
Source: The Aurora Sentinel, “Venture capital drought affecting Colorado’s crop of medical inventions,” Brandon Johansson, Sept. 7, 2011