Venture capital on a shoestring: Bioventures’ pioneering life sciences fund in South Africa

<p>Abstract</p> <p>Background</p> <p>Since 2000, R&D financing for global health has increased significantly, with innovative proposals for further increases. However, although venture capital (VC) funding has fostered life sciences businesses across the developed world, its application in the developing world and particularly in Africa is relatively new. Is VC feasible in the African context, to foster the development and application of local health innovation?</p> <p>As the most industrially advanced African nation, South Africa serves as a test case for life sciences venture funding. This paper analyzes Bioventures, the first VC company focused on life sciences investment in sub-Saharan Africa. The case study method was used to analyze the formation, operation, and investment support of Bioventures, and to suggest lessons for future health venture funds in Africa that aim to develop health-oriented innovations.</p> <p>Discussion</p> <p>The modest financial success of Bioventures in challenging circumstances has demonstrated a proof of concept that life sciences VC can work in the region. Beyond providing funds, support given to investees included board participation, contacts, and strategic services. Bioventures had to be proactive in finding and supporting good health R&D.</p> <p>Due to the fund’s small size, overhead and management expenses were tightly constrained. Bioventures was at times unable to make follow-on investments, being forced instead to give up equity to raise additional capital, and to sell health investments earlier than might have been optimal. With the benefit of hindsight, the CFO of Bioventures felt that partnering with a larger fund might benefit similar future funds. Being better linked to market intelligence and other entrepreneurial investors was also seen as an unmet need.</p> <p>Summary</p> <p>BioVentures has learned lessons about how the traditional VC model might evolve to tackle health challenges facing Africa, including how to raise funds and educate investors; how to select, value, and support investments; and how to understand the balance between financial and social returns. The experience of the fund suggests that future health funds targeting ailments of the poor might require investors that accept health benefits as part of their overall “return.” Learning from Bioventures may help develop health innovation funding for sub-Saharan African that has combined health, financial, and economic development impacts.</p

Venture funding for science-based African health innovation

<p>Abstract</p> <p>Background</p> <p>While venture funding has been applied to biotechnology and health in high-income countries, it is still nascent in these fields in developing countries, and particularly in Africa. Yet the need for implementing innovative solutions to health challenges is greatest in Africa, with its enormous burden of communicable disease. Issues such as risk, investment opportunities, return on investment requirements, and quantifying health impact are critical in assessing venture capital’s potential for supporting health innovation. This paper uses lessons learned from five venture capital firms from Kenya, South Africa, China, India, and the US to suggest design principles for African health venture funds.</p> <p>Discussion</p> <p>The case study method was used to explore relevant funds, and lessons for the African context. The health venture funds in this study included publicly-owned organizations, corporations, social enterprises, and subsidiaries of foreign venture firms. The size and type of investments varied widely. The primary investor in four funds was the International Finance Corporation. Three of the funds aimed primarily for financial returns, one aimed primarily for social and health returns, and one had mixed aims. Lessons learned include the importance of measuring and supporting both social and financial returns; the need to engage both upstream capital such as government risk-funding and downstream capital from the private sector; and the existence of many challenges including difficulty of raising capital, low human resource capacity, regulatory barriers, and risky business environments. Based on these lessons, design principles for appropriate venture funding are suggested.</p> <p>Summary</p> <p>Based on the cases studied and relevant experiences elsewhere, there is a case for venture funding as one support mechanism for science-based African health innovation, with opportunities for risk-tolerant investors to make financial as well as social returns. Such funds should be structured to overcome the challenges identified, be sustainable in the long run, attract for-profit private sector funds, and have measurable and significant health impact. If this is done, the proposed venture approach may have complementary benefits to existing initiatives and encourage local scientific and economic development while tapping new sources of funding.</p

Incorporating Cold-Air Pooling into Downscaled Climate Models Increases Potential Refugia for Snow-Dependent Species within the Sierra Nevada Ecoregion, CA

We present a unique water-balance approach for modeling snowpack under historic, current and future climates throughout the Sierra Nevada Ecoregion. Our methodology uses a finer scale (270 m) than previous regional studies and incorporates cold-air pooling, an atmospheric process that sustains cooler temperatures in topographic depressions thereby mitigating snowmelt. Our results are intended to support management and conservation of snow-dependent species, which requires characterization of suitable habitat under current and future climates. We use the wolverine (Gulo gulo) as an example species and investigate potential habitat based on the depth and extent of spring snowpack within four National Park units with proposed wolverine reintroduction programs. Our estimates of change in spring snowpack conditions under current and future climates are consistent with recent studies that generally predict declining snowpack. However, model development at a finer scale and incorporation of cold-air pooling increased the persistence of April 1st snowpack. More specifically, incorporation of cold-air pooling into future climate projections increased April 1st snowpack by 6.5% when spatially averaged over the study region and the trajectory of declining April 1st snowpack reverses at mid-elevations where snow pack losses are mitigated by topographic shading and cold-air pooling. Under future climates with sustained or increased precipitation, our results indicate a high likelihood for the persistence of late spring snowpack at elevations above approximately 2,800 m and identify potential climate refugia sites for snow-dependent species at mid-elevations, where significant topographic shading and cold-air pooling potential exist