Funding Innovation and Risk: A Grey-Based Startup Investment Decision.

As found in behavioral decision theory, venture capitalists (VCs) rely on heuristics and bias, owing to their bounded rationality, either by limited alternatives or information and resources. India's booming startup scene challenges VCs in decision-making owing to information overload from numerous evolving ventures, which hinders informed judgment. VC investment behavior, due diligence, and cognitive factors related to decision-making have always drawn the attention of researchers. We provide an alternative approach for an optimal decision by VCs by identifying the attributes that influence investment or funding decisions at an early stage of a venture in tech-based industries. Through a literature review, we identify eight attributes, both on internal and external criteria, that venture investors consider when making investment decisions. Based on interviews with 20 experts, we further identify eight key tech-based sectors. Using grey system theory, we then determine the rankings of eight tech startups for investors' early-stage investment decisions. This study presents a linguistic variable-based approach of grey numbers to decide weights and ratings, the grey possibility degree to compare and rank different tech startups, and based on the results, suggests the ideal tech startup. We find that agritech ranks first; thus, investors should prefer venturing into such startups for early-stage investment. E-commerce and edutech ranked second and third, respectively, followed by electric vehicle infrastructure, insurtech, fintech, space tech, and software as a service.

Smart city and green innovation: Mechanisms and industrial emission reduction effect.

Green innovation is essential for environmentally sustainable development. The construction of smart cities offers significant potential for developing green innovation through optimizing urban administration and improving the allocation of critical resources. Using Chinese city data from 2005 to 2019, this study adopts a causal identification framework based on the multi-temporal difference-in-difference method to explore the impact of smart city construction on green innovation and the mechanism and joint industrial emission reduction effect between them. A positive and significant relationship with a weak inverted U-shaped trend was found between smart city construction and green innovation. Besides the direct channel, labor factor allocation, venture capital attractiveness, and market accessibility are essential indirect channels between the two concepts. Furthermore, the effects of smart city construction on green innovation varied depending on the marketization level, administrative rank, population size, and geographic location of the city. In addition, the interaction of the two constructs negatively affected industrial emissions, which helped optimize the environment. These findings suggest that smart city construction offers a digital dividend for developing green innovation and creating an efficient, sustainable environment.

[STATE-OF-THE-ART OF GLOBAL START-UP INVESTMENT FOR ALLERGY AND IMMUNOLOGY 2022].

BACKGROUND: In 2022, the "New Capitalism Grand Design and Implementation Plan" was adopted in Japan, emphasizing the promotion and environmental development of startups. Given this context, an investigation into the startup and investment landscape in the allergy sector, both domestically and internationally, becomes imperative. METHODS: We analyzed 156 allergy-related startups from Japan, the US, and Europe from 2010 to 2021. Data on corporate information and investment trends were extracted from databases and VC websites. RESULTS: The total investment reached approximately 7.2 billion USD, with a ratio of 20:6:1 for the US, Europe, and Japan, respectively. The US showed a decline post its peak from 2016-2018, while Europe and Japan experienced growth. Notably, the US primarily invested in biopharmaceuticals for atopic dermatitis and food allergies, Europe in asthma-related apps, and Japan in healthcare apps and cross-border startups. DISCUSSION AND CONCLUSION: While Japan's investment environment in the allergy sector remains in its nascent stages and has room for development, the US and Europe are evidently ahead. Considering the rise of startups and funding limitations in Japan, external funding from regions like the US becomes a potential avenue. These findings are anticipated to contribute to the strategic activation of startups in allergy research and development.

Cell and gene therapy investment: evolution and future outlook on investor perspectives.

BACKGROUND AIMS: To better understand the attitudes and behaviors of investors involved in funding cell and gene therapy (CGT) businesses, the Business Development and Finance) subcommittee of International Society for Cell and Gene Therapy, in collaboration with Truist Securities, conducted a broad survey of the investment community in late 2021. METHODS: This survey follows a similar study that this group executed in 2018, and the longitudinal comparisons between the two time periods provide insights into how investor behavior in the CGT field has evolved. RESULTS: The vast majority of investor respondents are specialist biotech investors who are primarily active in deploying capital in North America and Europe. There was a notable increase in the proportion of investors actively deploying capital in China and Japan between 2018 and 2021. The percentage of respondents' portfolios dedicated to CGT companies has also increased in this period, reflecting a noteworthy trend in the therapeutic landscape. CONCLUSIONS: Clinically significant data remain the dominant force behind investment decisions, whereas competition from other drug modalities has now emerged as the most-cited barrier to making a CGT investment, eclipsing safety concerns as the most significant barrier to investment in 2018. Concerns around manufacturing and scale-up have also increased in prominence amongst the investment community. Gene-editing technologies are attracting investors as the most compelling new CGT technology. This survey also revealed that most investors expect to increase their level of investment in allogeneic technologies relative to autologous products in the coming years.

Venture capital, innovation channels, and regional resource dependence: Evidence from China.

Although the literature predominantly emphasises the crucial role of technological innovation in alleviating resource dependence, limited attention has been given to the pivotal role of capital in driving such innovation. As a critical factor in technological advancements and productivity enhancement, venture capital has a substantial function in the utilisation of resources and the development of sustainable energy sources. Drawing upon panel data from 30 provinces in China, this study explores how venture capital and resource dependence are interrelated. Our research reveals that venture capital effectively mitigates regional resource dependence by facilitating increased investment in innovation channels. However, the weakening of regional human resources mitigates venture capital's diminishing impacts on resource dependence. These findings provide valuable insights for countries seeking to reduce their dependence on natural resources and achieve long-term economic sustainability.

Projected Growth in FDA-Approved Artificial Intelligence Products Given Venture Capital Funding.

PURPOSE: Medical imaging accounts for 85% of digital health's venture capital funding. As funding grows, it is expected that artificial intelligence (AI) products will increase commensurately. The study's objective is to project the number of new AI products given the statistical association between historical funding and FDA-approved AI products. METHODS: The study used data from the ACR Data Science Institute and for the number of FDA-approved AI products (2008-2022) and data from Rock Health for AI funding (2013-2022). Employing a 6-year lag between funding and product approved, we used linear regression to estimate the association between new products approved in a certain year, based on the lagged funding (ie, product-year funding). Using this statistical relationship, we forecasted the number of new FDA-approved products. RESULTS: The results show that there are 11.33 (95% confidence interval: 7.03-15.64) new AI products for every $1 billion in funding assuming a 6-year lag between funding and product approval. In 2022 there were 69 new FDA-approved products associated with $4.8 billion in funding. In 2035, product-year funding is projected to reach $30.8 billion, resulting in 350 new products that year. CONCLUSIONS: FDA-approved AI products are expected to grow from 69 in 2022 to 350 in 2035 given the expected funding growth in the coming years. AI is likely to change the practice of diagnostic radiology as new products are developed and integrated into practice. As more AI products are integrated, it may incentivize increased investment for future AI products.

Venture Capital in US Medicine: A Briefing for Radiologists.

In recent years, there has a been a rapid and significant drop in the number of private practices in US radiology. Many factors have driven this change. One of the most important has been the corporatization of practices. In many cases, this involves third-party financing, one type of which is venture capital. This article will provide an introduction to the venture capital investment model for medical professionals.

From garages to ecosystems: the coevolution of life science incubators and accelerators.

Incubators and accelerators catalyze the launch of life science startups and have evolved from simple facilities to vibrant ecosystems offering research infrastructure, programs, and funding. Analysis of financing activities indicates the outperformance of incubator companies relative to accelerators in fundraising, mergers and acquisitions (M&As), and initial public offerings (IPOs), attributed to extended interactions with investors and peers.

Does Venture Capital Backing Improve Disclosure Controls and Procedures? Evidence from Management's Post-IPO Disclosures.

Firm managers make ethical decisions regarding the form and quality of disclosure. Disclosure can have long-term implications for performance, earnings manipulation, and even fraud. We investigate the impact of venture capital (VC) backing on the quality and informativeness of disclosure controls and procedures for newly public companies. We find that these controls and procedures are stronger, as evidenced by fewer material weaknesses in internal control under Section 302 of the Sarbanes-Oxley Act, when companies are VC-backed. Moreover, these disclosures are informative and are more likely to be followed by subsequent financial statement restatements than are disclosures made by non-VC-backed IPO companies.

Financing repurposed drugs for rare diseases: a case study of Unravel Biosciences.

BACKGROUND: We consider two key challenges that early-stage biotechnology firms face in developing a sustainable financing strategy and a sustainable business model: developing a valuation model for drug compounds, and choosing an appropriate operating model and corporate structure. We use the specific example of Unravel Biosciences-a therapeutics platform company that identifies novel drug targets through off-target mechanisms of existing drugs and then develops optimized new molecules-throughout the paper and explore a specific scenario of drug repurposing for rare genetic diseases. RESULTS: The first challenge consists of producing a realistic financial valuation of a potential rare disease repurposed drug compound, in this case targeting Rett syndrome. More generally, we develop a framework to value a portfolio of pairwise correlated rare disease compounds in early-stage development and quantify its risk profile. We estimate the probability of a negative return to be [Formula: see text] for a single compound and [Formula: see text] for a portfolio of 8 drugs. The probability of selling the project at a loss decreases from [Formula: see text] (phase 3) for a single compound to [Formula: see text] (phase 3) for the 8-drug portfolio. For the second challenge, we find that the choice of operating model and corporate structure is crucial for early-stage biotech startups and illustrate this point with three concrete examples. CONCLUSIONS: Repurposing existing compounds offers important advantages that could help early-stage biotech startups better align their business and financing issues with their scientific and medical objectives, enter a space that is not occupied by large pharmaceutical companies, and accelerate the validation of their drug development platform.

How Industrial Policy Could Accelerate Innovation In The Life Sciences.

The US is expanding public investment in the technology-based industries, including the life sciences, in a move driven by anger, fear, and hope. Anger at high drug prices is leading to downward pressures and eroding traditional private-sector funding for research and development, fear of China's technological and political ambitions is creating bipartisan support for intervention, and the successful development of COVID-19 vaccines has spurred hope for analogous publicly funded breakthroughs in other therapeutic domains. The instruments of industrial policy used by other nations include grants for scientific research, equity investments in start-ups, tax incentives for corporate research and development, credit guarantees for asset-intensive sectors, governmental procurement, and product pricing. In the face of ever-stronger competition, if the US is to retain its leading position in the life sciences, public policy must consider competition among nations as well as among firms. This article analyzes emerging innovation and industrial policy in the three principal sectors in the life sciences: research universities and laboratories; entrepreneurial startups and "scale-ups," and large pharmaceutical and medical device corporations.

The winding journey of biotech capital raising: deciphering the jargon.

Ensuring biotech companies are sufficiently capitalized to propel innovation and development remains a central focus for management. In this article, we draw on our broad perspective interacting with venture capitalists to offer thoughts on investor feedback. Understanding venture capitalists' mindsets and investment theses will increase the probability of securing needed capital.

The Gap Between AI and Bedside: Participatory Workshop on the Barriers to the Integration, Translation, and Adoption of Digital Health Care and AI Startup Technology Into Clinical Practice.

BACKGROUND: Artificial intelligence (AI) and digital health technological innovations from startup companies used in clinical practice can yield better health outcomes, reduce health care costs, and improve patients' experience. However, the integration, translation, and adoption of these technologies into clinical practice are plagued with many challenges and are lagging. Furthermore, explanations of the impediments to clinical translation are largely unknown and have not been systematically studied from the perspective of AI and digital health care startup founders and executives. OBJECTIVE: The aim of this paper is to describe the barriers to integrating early-stage technologies in clinical practice and health care systems from the perspectives of digital health and health care AI founders and executives. METHODS: A stakeholder focus group workshop was conducted with a sample of 10 early-stage digital health and health care AI founders and executives. Digital health, health care AI, digital health-focused venture capitalists, and physician executives were represented. Using an inductive thematic analysis approach, transcripts were organized, queried, and analyzed for thematic convergence. RESULTS: We identified the following four categories of barriers in the integration of early-stage digital health innovations into clinical practice and health care systems: (1) lack of knowledge of health system technology procurement protocols and best practices, (2) demanding regulatory and validation requirements, (3) challenges within the health system technology procurement process, and (4) disadvantages of early-stage digital health companies compared to large technology conglomerates. Recommendations from the study participants were also synthesized to create a road map to mitigate the barriers to integrating early-stage or novel digital health technologies in clinical practice. CONCLUSIONS: Early-stage digital health and health care AI entrepreneurs identified numerous barriers to integrating digital health solutions into clinical practice. Mitigation initiatives should create opportunities for early-stage digital health technology companies and health care providers to interact, develop relationships, and use evidence-based research and best practices during health care technology procurement and evaluation processes.

The study on the relationship between venture capital, tolerance to failure, and enterprise innovation performance.

Venture capital not only affects enterprise innovation decisions by providing funds, value-added services and allocating control rights, but also the psychological capital of venture capital can enhance its tolerance for failure in innovation activities of enterprises, and thus have a positive impact on innovation performance of enterprises. This paper uses multivariate and negative binomial regression models, propensity score matching method and Heckman treatment effect model to study the impact mechanism of venture capital on enterprise innovation performance, and the mediation role of venture capital's tolerance for innovation failure in the relationship between the above two; this paper studies the moderating effect of the characteristics of heterogeneous venture capital institutions, such as joint investment strategies and geographical proximity, on the relationship between venture capital failure tolerance and enterprise innovation performance. The results show that venture capital can significantly improve its tolerance for enterprise innovation failure by holding shares and occupying seats on the board of directors of enterprises, thereby bring the increase of the innovation performance of enterprises; if joint investment strategy and close investment are selected, the tolerance of venture capital to innovation failure will have a more obvious effect on the promotion of enterprise innovation performance.

Scientific venturing for early-stage professionals (ESPs), a key concept in the innovation ecosystem.

Early-stage professionals (ESPs) and senior scientists who want to transition from academia to the industry need support to develop new skills and know-how to endeavor this challenge. However, this topic is significantly underserved in the field of cell and gene therapy, slowing down ESPs' potential to make this step. The authors of this article, members of the ESPs in the South and Central America Subcommittee at the International Society for Cell and Gene Therapy, propose the concept of "scientific venturing," which stands for the process by which scientists become entrepreneurs or part of a company. In our article, we provide key aspects to understand this concept, considering key personality traits that need to be developed and a discussion about the "innovation ecosystem." Later, we consider how scientific venturing may result in an increase in difficulty in nascent innovation ecosystems such as Latin America, in comparison with those more advanced and mature in high-income countries. Finally, we provide key information for the ESPs and other professionals about the stages of private and public investment, including information about the resources needed for the sustainability of companies and startups. Understanding what scientific venturing involves for ESPs is key to taking advantage of the maturity of an innovation ecosystem, its network, and available opportunities.

The Value of Scientific Publications in Surgical Device Innovation.

BACKGROUND: Clinical trials represent a significant risk in the commercialization of surgical technologies. There is incentive for companies to mitigate their regulatory risk by targeting 510K over Premarket Approval (PMA) pathways in order to limit the scope, complexity and cost of clinical trials. As such, not all companies will publish clinical data in the scientific literature. PURPOSE: We set out to investigate the relationship between scientific publication by surgical device companies and the impact it has on company valuation. We hypothesize that publishing in the scientific literature correlates with success of the surgical device companies as measured by funding. RESEARCH DESIGN: We first obtained a list of surgical device startup companies and their financial deals using the Pitchbook database. Those companies were then cross referenced with the FDA database and the Dimensions database for product registrations and peer reviewed publications, respectively. Analysis was then performed using these query results. STUDY SAMPLE AND DATA COLLECTION: We obtained a list of US surgical device startups financing deals closed between 2010 and 2020 from the Pitchbook database. We queried the Pitchbook for deal dates from January 1, 2010 to January 1, 2020 for deal types spanning early stage investment to IPO. Deals were limited to those conducted in the United States and to the surgical device industry. We queried the FDA database for product registration information associated with each of the companies involved in the deals. We tabulated the number of journal articles associated with surgical device companies using the Dimensions Search API as well as a manual confirmation. RESULTS: Five hundred thirty five (535) deals from 222 companies were found in Pitchbook that met our criteria. Querying the FDA database resulted in 578 registrations associated with these companies. Publications per company ranged widely. CONCLUSIONS: Companies that are able to generate a more numerous publications had correspondingly higher valuations during funding rounds. A subset of outstanding companies were analyzed and at least four factors affect: direct value of publications, indirect valve of publications, survivorship bias, and adoption share; each of which will be discussed in this manuscript.

Constructing agri-food for finance: startups, venture capital and food future imaginaries.

Over the past decade, investments in agricultural and food technology startups have grown to previously unknown dimensions. Mushrooming agri-food tech startups that promise to solve critical issues in the agri-food system through technological innovation are increasingly perceived as an attractive new investment opportunity for venture capitalists and investors. This paper investigates how digital agri-food technologies are narrated, constructed, and promoted for financial investment. Through qualitative content analysis of agri-food tech industry reports, articles, and commentaries we trace the logic, rationales, and narratives of this most recent investment rush, and reveal its immanent techno-finance fixes. We conceptualize the agri-food imaginaries produced within the agri-food tech discourse as financialized imaginaries, and argue that they are specifically tailored to construct, incentivize, and legitimize this new agri-food tech space for financial investment. In their attempt to raise money from investors, venture capital firms further fuel this development by discursively creating an 'agri-food tech investment rush'-similar to the land and gold rushes of the past. Investments in agri-food tech startups, however, are presented to investors as both a profitable investment opportunity as well as a moral obligation, allowing for food production to cope with neo-malthusian and environmental threats. This paper contributes to our understanding of digitization as a socio-technical project, which includes the active envisioning and promotion of desirable agri-food futures.