Life Science Tennessee (LST) and the Waller law firm have collaborated on a new report that identifies an unfilled need for angel investors to support early stage life science companies in Tennessee.
The report, titled “Angel Funding for the Life Sciences in Tennessee,” was released last week during the statewide association’s annual “Day on the Hill” when members visited with nearly three dozen state legislators.
“As this report details, the lack of an angel network to support early-stage life science companies inhibits economic growth in our state,” said Abby Trotter, LST’s Executive Director. “Tennessee’s bioscience industry employs more than 40,000 people across 1,275 businesses and public and private research institutions with innumerable commercial opportunities. If we fail to build a pipeline of angel investment, our life science entrepreneurs have less opportunity to grow in our state.”
Those in the start-up space know that the lack of angel investor funding is a national trend, but the report notes that it is more pronounced for life science companies that face longer and more expensive business development cycles, a strict regulatory environment, and additional costs associated with clinical trials.
According to data from the National Venture Capital Association, there were 5,680 angel and seed deals recorded in 2015. Two years later, that total had fallen to 3,793. In that same two-year period, the average investment for angel and seed deals rose by 33 percent for a median deal size of $1 million.