Overall venture capital funding into biotech companies increased from $3.8 million in 2010 to $4.7 million in 2011, and funding for medical device and medical equipment companies increased from $6.7 million to $8.2 million in 2010 and 2011, respectively.

More importantly, the statistics note that while fewer companies were funded, the average investment into these companies was higher. This is particularly important as life science companies (biotech and med device/equipment) take a longer period of time to develop their products - larger fundings allow the companies to advance the process quicker. 

Although early indications seem that life science investing in 2012 is continuing at a steady pace, it is interesting to note that these investments are primarily being made into later stage companies with serial C-level management. 

Early- or mid-stage life science companies are being advised to fund innovation with dollars that come from places other than venture capital. 

Grants are available from many nonprofit (e.g. Gates Foundation, Michael J. Fox Foundation, etc.) as well as federal agencies, and a few universities have formed “venture funds”  focused on innovation.

Teaching hospitals and/or other pharma/biotech companies can also provide clinical trial assistance for low cost fees or fees plus equity for early stage biotech companies. 

Strategic partners can also provide in-kind services and dollars to help further the  innovation process.

The bottom line is that companies with experienced management teams that have proven their model are being funded.  Entrepreneurs, with early stage companies, need to find more creative ways to fund their companies.