Stories of Technology, Innovation, & Entrepreneurship in the Southeast

(EDITOR’S NOTE: Today, we resume the annual “Investor Outlook” series with the sixth article in a 10-part series capturing the thoughts of Angel and Venture Capitalists who invest in East Tennessee as they look back on 2020 and ahead as we begin 2021. The first five articles can be found at these links – Part 1, Part 2, Part 3, Part 4 and Part 5. The series will conclude on Friday.)

Biotech/life science companies have captured significant interest in 2020 for obvious reasons. Will that sector continue to be “hot” in 2021 or do you see it cooling-off?

• Ken Woody, President and Partner, Innova Memphis. There is strong interest right now in antivirals, safety and protective equipment, and simpler and safer approaches to standard medical procedures. I don’t see the demand for that decreasing. Companies will need to demonstrate what makes them unique and address the uncertainty of a new U.S. administration, the continuing realities of COVID, and the struggling economy.
• David Belitz, Charlie Brock and Courtney Watson, Partners, Chattanooga Renaissance Fund. The Chattanooga Renaissance Fund is not a good yardstick for this question. We have very limited exposure to biotech. The companies we do have were severely impacted by COVID since their products were predominantly used in out-patient centers which were closed for various amounts of time through the year. Our guess is that how “hot” this sector remains will depend as much on politics as pandemics. The change in administration and the health policies it chooses to pursue could be a catalyst or could be a huge hinderance, either way it is too early to know.
• Eric Dobson, Chief Executive Officer, Sheltowee Angel Network. Life sciences will be big. I have concerns that fintech, edtech, and similar market segments will take a backseat to life sciences who saw a boon in the market in 2020 based on fighting COVID. We just experienced a wave of innovation in biotech, the implications of which we can’t even fathom yet. Much good will come of the work done to perfect the vaccine(s) and parallel antiviral research. Other innovations will erupt from these efforts. I expect to see an entirely new class of antiviral biotechnology erupt this decade.
• Tony Lettich, Managing Director, The Angel Roundtable. Despite the political uncertainty, we believe this area will continue to capture significant interest for the foreseeable future. The pandemic, technology developments, politics beyond the uncertainty and an aging U.S. population are all driving this focus and there appears to be increasing alignment of these factors.
• Kristina Montague, Managing Partner, The JumpFund. Yes, this sector is “hot” and specifically those companies addressing anything specifically related to or ancillary to COVID, including how doctors might more efficiently and effectively provide in-office procedures for necessary health issues that traditionally have been only provided at hospitals. The impact of COVID will continue to reverberate through our healthcare system and our personal health and wellness practices for some time to come. And many are working on how do we address the NEXT pandemic. These are also companies that require sophisticated investors, experienced in particular life science sectors, and those that are able to offer extremely patient capital as many have much longer time horizons than traditional start-ups.
• Grady Vanderhoofven, Founder, President and Chief Executive Officer, Three Roots Capital. I think that sector will continue to be hot. COVID prevention, treatment, and recovery will continue to be a big deal throughout 2021. In addition, everyone has learned a lot as part of the process of developing vaccines in record time and developing treatments and processes to manage people infected by COVID and developing methods to avoid and minimize infection. I think it will be interesting to see how those learnings are leveraged for treatments and medicines targeted at other diseases and viruses.

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