Conventional wisdom says that a bad economy means fewer people are opening up new businesses. But in the biotech world, the opposite is actually true.
The number of new life sciences and technology start-up companies rose by 13 percent from 2008 to 2009, with 300 new companies attempting lift-off last year, according to a recent report from Connect, which does research and provides resources for biotech businesses.
Rather than deterring these new businesses, the bad economy actually fuels their creation, said Steve Hoey, Connect’s senior program manager. That’s because people who are laid off from their old jobs now have the time and motivation to try out an idea in an entrepreneurial business.
But the same economy that provides the fuel for these entrepreneurial endeavors also makes the going rough for new companies, as we’ve written about a great deal, because venture capitalists and angel investors are more hesitant to give out funds. When they do invest, many of these firms are focusing their money on later-stage companies with more developed products, leaving start-ups to fend for themselves.
I’m working on a story that describes this predicament by telling the stories of entrepreneurs attempting to launch their biotech companies in San Diego. Some of the people I’ve spoken with personify Hoey’s message — they were driven to their new entrepreneur status after losing their jobs and their money to the recession.
If you have suggestions for other people I should talk to or information I should include, please comment here or send me an e-mail by clicking on my name below. Thanks!