The Patterns of Venture Capital Investment in the UK Bio-Healthcare Sector: The Role of Proximity, Cumulative Learning and Specialisation

Alessandro Rosiello, Stuart Parris

Research output: Contribution to journalArticlepeer-review

Abstract

This paper focuses on the patterns of venture capital (VC) investment in dedicated biotech firms (DBFs) in the therapeutic and diagnostic sectors (bio-healthcare). We use a database of 655 UK bio-healthcare deals to map the geographical flows of VC investment and measure the co-location of investors and DBFs. Then, using 20 face-to-face interviews with venture capitalists (VCs) and DBF firms in Cambridge and Scotland, we study the strategic motives underlying the co-location of investors and investee companies and reflect on the catalytic role VCs play in context of the Scottish and Cambridge bio-clusters. From the viewpoint of VC-related policies, we find that our study is more in line with arguments stressing the attractive power of ‘investor-ready’ opportunities (Mason and Harrison 200327. Mason , C. M. and Harrison , R. T. 2003 . Closing the regional equity gap? A critique of the Department of Trade and Industry's Regional Venture Capital Funds Initiative . Regional Studies , 37 ( 8 ) : 855 – 868 .
[Taylor & Francis Online], [Web of Science ®]
View all references) than supply-side approaches that take for granted VC presence at the core of high-tech clusters. In line with Avnimelech, Rosiello, and Teubal (20082. Avnimelech , G. , Rosiello , A. and Teubal , M. 2008 . A discussion on the theoretical foundations of VC policy: Moving from a financial perspective towards a systemic and evolutionary framework ESRC Innogen Centre Working Paper. www.innogen.ac.uk (accessed December, 2008)

View all references), we propose that VC policy should be consistent with the wider strategic objectives of innovation and technology policy.

Original languageEnglish
Pages (from-to)185-211
JournalVenture Capital
Volume11
Issue number3
DOIs
Publication statusPublished - 2009

Keywords

  • intermediation
  • financing
  • venture capital
  • biotechnology
  • DBF
  • investor proximity
  • geography

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