Fifty per cent of biotech companies in the East of England have been Venture Capital funded from the outset, according to pioneering research by Business Weekly.

That trend has been steady over the last 14 years, showing that VCs will back bio as long as the technology holds water and there is a strong chance of commercialisation.

There is a feeling derived in recent months, however, that VCs have become much more selective over which bio start-ups they will back. Major fundraisings by Domantis, Lorantis, Astex and KuDOS are regarded very much as the exception to the rule.

Most young bios say they are currently existing on privately raised capital among close associates after being spurned by the VCs, although angel networks have picked up some of the slack.

Family, friends and associates accounted for 24 per cent of initial funding in our sample, closely followed at 22 per cent by grants from research sources.

Government grants – mainly DTI SMART Awards – made up just 6 per cent of the sample, while 3 per cent of seedcorn capital was derived from companies in-house and also academia.

In the majority of cases where initial funding for new ventures derived from family and associates, VC rounds followed within a year or two years to underpin the long-term prospects of the businesses concerned.

Fifty six per cent of the intellectual property being developed by local biotechnology businesses stems from either academia (principally leading Universities) or pure research institutes, although the split is an eye opener.

Company spin-outs proved to be the most prolific single source of new biotech IP over the same 14-year sample, triggering 44 per cent of bio start-ups.

Pure research institutes generated 29 per cent of the IP – but when you broker in the University of Cambridge’s contribution, the stats prove really instructive.

Some 27 per cent of East of England biotechnology originated within the University’s walls, a staggeringly high percentage even allowing for the brilliance of Cambridge medical science over the years.

It would appear to demonstrate that the biotech industry locally and academia are feeding off one another. As the local biotech cluster grows, fuelled by Cambridge University brainpower, so serial entrepreneurs – many of them alumni – are sparking further collaborations and stimulating contemporaries to follow a well trodden path.

The funding and IP profiles of leading East of England biotechs – representative of our region-wide sample – is only accessible via Business Weekly’s website at www.businessweekly.co.uk