Venture Capital
Berkeley Heights, New Jersey, 07922
The Healthcare Industry has historically been one of the largest and fastest growing sectors of the United States economy. Since 1970, national health care expenditures have expanded at a rate of approximately 12% per annum and reached an estimated $1 Trillion, or over 14% of the Gross National Product in 1994. Since that time, government and private payers have undertaken efforts to control healthcare costs. Despite this effort, the US Center for Medicare and Medicaid Services, Office of the Actuary projects that, in 2013, health care spending in the United States will reach $2.9 Trillion. World wide health care spending reached $6 Trillion in 2012 (Plunkett Research, Ltd). Despite cost containment efforts, the aging of the population, advances in technology, and increased consumer awareness continue to be strong industry growth drivers. This growth is being met by continuing efforts at cost containment by both private and governmental payors. It is no longer sufficient for adoption by the medical community that a new product improves patient outcomes. It must now also be demonstrated that the product is cost effective. These changes have had a major impact on the healthcare industry, but have also created opportunities for products that not only improve patient outcomes, but also improve the cost effectiveness of medical care. These changes, together with a regulatory environment that has become more unpredictable, have resulted in many venture and other investment funds retreating from the industry. In turn, this has created an environment in which the cost of entry into new investments has become significantly lower, and significant industry expertise, more than ever, has become critical, and the risk reward available to the investor has become extremely favorable. The unifying principle underlying The Vertical Group's investment activities remains the ability to leverage the medical device industry knowledge and experience of the firm's general partners. This knowledge and experience includes: direct and indirect involvement in medical device and biotech industry operations such as sales and marketing, research and development, and regulatory affairs; and also such areas as transaction structuring, tax planning, and portfolio management. The Vertical Group participates in early stage angel financings, and both early and later stage venture capital financings...The scale of The Vertical Group's investment depends on the nature of the transaction, with investment size ranging from $250,000 to $5,000,000 in various stages of angel and venture capital transactions.
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