Less Venture Capital for Local Biotechs
Orange County biotechnology and medical devices companies, traditionally two of the area’s biggest stars, appear to have lost some of their luster with venture capitalists.
Local biotech upstarts attracted less than $3 million, or 3.7%, of the $81.4 million investors poured into Orange County in the first three months this year. Medical devices garnered about $3.5 million, or 4.3%, according to a report by PricewaterhouseCoopers.
By contrast, San Diego County biotech and medical devices firms are very much in vogue. Biotech upstarts there attracted more than $114 million, or 27.8% of the total of $411.5 million in venture capital earmarked for county firms, while fledgling medical device companies received nearly $49 million, or 11.9%.
Venture capitalists sometimes overlook Orange County, preferring San Diego and the Bay Area, where there are more deals and thus the potential to make more money, said venture capitalist Randall Lunn of Palomar Ventures in Irvine. “I don’t see things changing right away,” he said.
PricewaterhouseCoopers found that venture money flowing to Orange County companies in the first quarter was up 60% from the first three months of 1999. But the funding has fallen sharply since the third quarter of last year.
Nearly 97% of the money in the latest quarter went to Internet and technology firms. Among the Orange County winners in the venture capital sweepstakes:
* Q Strategies Inc., which builds and hosts e-commerce Web sites for fast-growing companies, landed $15 million. The Tustin-based company recently signed an agreement to build the new NFL.com Web site, Chief Executive Dan Santell said.
* Attilaweb.Com Inc. of Irvine, which manufactures online time, expense and billing software for engineers, consultants and attorneys, raised $6 million.
* Opus Medical Inc., a San Juan Capistrano manufacturer of medical devices for orthopedic surgery, took in $3.5 million. The firm has eight employees and was incorporated last year.
