8 Reasons Why We’re Excited about 2012

Posted by | January 3, 2012

Recent news and predictions for venture capital have been anything but cheery. With a wobbly economy and uncertainty surrounding government reforms, investors are understandably cautious. Entrepreneur Magazine even goes so far as to ask whether venture capital can ever rise from the ashes of diminished returns over the last decade.

As 2012 begins, we would like to offer our predictions for the areas within life sciences and technology where Safeguard Scientifics is focused. Drawing from events in 2011 and responses to the NVCA’s sixth annual Venture View prediction survey, here are eight reasons why we’re excited about 2012:

  1. Innovative ideas will still be recognized — Despite conservative predictions for fundraising, 63 percent of venture capitalists expect their portfolio companies to increase in value while 80 percent of CEOs of venture-backed companies agree with that assessment.
  2. The Internet of Things will take off — From energy conservation to food distribution, the Internet of Things has the potential to transform industries. The world is becoming increasingly connected and automated, for the benefit of all.
  3. Startups will continue to hire aggressively — The NVCA survey found a staggering 86 percent of venture backed companies plan to increase their workforce in 2012. With unemployment still high, startups, especially those in tech, could help economic recovery as they develop innovative solutions.
  4. Enterprise 3.0 will take hold — Social media, mobile technology, and cloud computing grew more popular in 2011. With a slate of new devices set to be released this year, such as Google’s tablet and UltraBooks, 2012 will see companies develop innovative new strategies that capitalize on new technologies, such as big data and the Internet of Things, which will enable them to become more dynamic.
  5. Healthcare will see big data solutions — While the quality and longevity of clinical practice guidelines have been questionable in the past, new sources of healthcare data, driven by startups, could be a game changer. As big data solutions enter the market, healthcare could become more effective and efficient in the coming year.
  6. FDA reform will be a defining issue — Next September, Congress will have to reauthorize the FDA’s user fee programs for drugs and medical devices. Several bills calling for reforms have already been introduced. Once there is more certainty regarding the direction of FDA regulatory policy, investor enthusiasm may be restored in life sciences, biopharma, and medical devices companies.
  7. Healthcare IT will continue to attract capital — Unencumbered by strict FDA regulations, healthcare IT should see increased investment dollars in 2012, according to nearly two-thirds of VCs and CEOs. As one of the bright spots in the industry, healthcare IT saw a surge in investments in the latter half of 2011 and is expected to remain strong.
  8. The convergence of tech and life sciences will continue to create new opportunities — Many healthcare and technology businesses are intersecting in fields like medical devices and diagnostics for targeted therapies. We believe that the convergence of life sciences and technology will continue to create exciting opportunities for companies to develop new solutions to old problems, improving efficiency, compliance and ultimately driving down costs.

Overall, 2012 is shaping up to be an exciting year for capital deployment opportunities and we look forward to keeping you up to date on the latest trends and exciting news at Safeguard!

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