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Snapshot: Avalon Ventures

QB3
Name: Kevin Kinsella
Title: Founder, Managing Director
Company: Avalon Ventures
Location: San Diego, CA
QB3
Website: www.avalon-ventures.com
Social Media: www.facebook.com/pages/Avalon-Ventures/161065593918768
Year Founded: 1983
Number of Employees: 10
Description: Avalon Ventures is a venture capital fund focused on information technology and life sciences. We are passionate about backing talented entrepreneurs seeking to build market-leading companies.
Select Portfolio Companies: Avalon Ventures is a venture capital fund focused on information technology and life sciences. We are passionate about backing talented entrepreneurs seeking to build market-leading companies.

How would you describe the VC funding environment overall?  In California?

The VC funding environment is very sparse.  There is not a lot of fresh capital to invest in biotech and healthcare deals. The major difference, in a global sense, from how things were 15-20 years ago, was that then we were very focused on the technical risk.  In other words, can you develop a drug, small molecule or protein, against a certain target?  The number one challenge today is financing risk.  If you invest in a company today, do you have enough money on the table, if the company were successful, to provide the resources for that company to achieve the goal of getting an NDA or close to that?  It has been difficult to risk the first dollar if we cannot see the end game.

What could be improved to support venture investing and biotech companies?

One thing that could be improved is taxes on capital gains.  People who have made investments  — where they hold their investment for five years — especially in biotech and healthcare investments, there should be no capital gains taxes on these investments.  Investments in innovation, which are the core of job creation and stimulation, should be protected.

FDA is always the bad boy in the process, but they are absolutely necessary to prove new therapeutics and medical interventions are safe and efficacious.  We should focus on streamlining the process and lowering the costs to support advancement of products to the market while maintaining public safety.  Finally, the burden of financing risk needs to be shifted broadly and needs to be done quickly.

Why California?

The biotech clusters will continue to evolve in areas with terrific research centers.  For example, San Diego has numerous top-tier institutes, including UC San Diego, The Scripps Research Institute, Salk Institute, and Sanford Burnham Medical Research Institute.  These focused research groups and the biotech and pharma companies that commercialize the activities create symbiotic innovation environments. California is uniquely situated because of the tradition of great research and natural big city clusters (San Diego, San Francisco, Los Angeles) that provide a great foundation for biotech.

What is the importance of NIH funding?

NIH is extremely important.  The more NIH funding we can have, we can prime the pump to create high-value, high-paying jobs in this economy.   It is an enduring necessity to advanced healthcare and drugs.  The government needs to provide funding in a sensible way, such as NIH funding.  Our country has created great industries (aerospace, biomedical, etc.) by providing basic research dollars.

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