Startup companies are not as attractive to venture capitalists as they were two years ago. Investor Scott Rocklage thinks the VC-backed startup market is slowing down. The National Venture Capital Association (NVCA) describes the slowdown as a return to normalcy. During the first quarter of 2017, venture capitalists poured $16.5 billion into more than 1,790 startups. Those figures represent a decrease in money invested and in companies that were investable. In 2016, venture capitalists invested $18.7 billion into more than 2,300 startups. It’s easy to look at those figures and assume the industry is going through an adjustment year.
But Scott Rocklage and other venture capitalists say that’s not the case. Rocklage and his team at 5AM Ventures are expecting a good year, but the team is exercising caution when it comes to picking companies to invest in. The team only wants companies that fit their equity and return goals. 5AM Ventures only invests in startups that have obvious potential. Rocklage and his group invest in pharmaceutical and healthcare related companies. That has been a winning strategy for Rocklage and 5AM.
Winning is in the Rocklage genes. Scott has a PH.D. in Chemistry from MIT and an undergrad degree from Berkeley. His resume is filled with board and CEO positions. Rocklage is a research and development wiz. His position as managing partner for 5AM Ventures gives him the opportunity to stay on top of the latest developments in the Pharma and healthcare sectors. Even though Rocklage is not opposed to backing angel and seed-stage startups, that segment of the venture capital market took a nosedive in the first quarter of 2017. There were only 827 total deals completed in the first quarter of 2017. That number is down from the 1,223 deals in the first quarter of 2016. Most first quarter 2017 deals were in the 5AM wheelhouse. Life sciences and software were the two categories that got the most attention.
Andrew Rocklage and the 5AM team have an impressive portfolio. In fact, there’s not much that isn’t impressive about Scott Rocklage. He holds 30 patents, and he is the Chairman of the Board of at least three companies at the moment. Rocklage is a hands-on manager who treats his clients and team with respect and dignity. Thanks to Scott’s leadership, 5AM Ventures has more than $1 billion in assets under management, and that figure is expected to grow by the end of 2017.