For so long as I can bear in mind, and I’ve been within the startup world because the 1990’s, enterprise capital has been practically synonymous with software program.

From the dotcom daze the place cash was thrown at even the stupidest ecommerce ideas to the pre-covid days the place funding flowed to SaaS, digital actuality, crypto, fintech, and AI for something and all the things, in case you wished enterprise capitalists to fund your startup, you wanted to be pitching some form of software program.

However previously few years, the dominance of software program has waned. Life sciences has change into the brand new king of the sand hill.

In 2022, 54% of the startups that Tech Coast Angels, one of the crucial lively angel teams within the nation, invested in have been life sciences, together with prescribed drugs, medical diagnostics, medical units, and digital well being. Software program accounted for under 22% of offers, client merchandise for 7%, and all the things else was within the noise.

Final yr wasn’t a one-time fluke. Life science funding has continued to develop since 2000, grabbing a bigger and bigger slice of the pie away from software program and purposes.

Life Science vs Software program Enterprise Mannequin & Funding

The usual enterprise capital funding mannequin runs in well-trod phases from family and friends to angel seed funding. As revenues develop, validating the dimensions of the market, enterprise capital funds write more and more bigger checks to develop the advertising and assist the corporate develop till it will definitely reaches essential mass and is acquired by an trade big to goes public in an IPO.

On this commonplace enterprise funding mannequin, the product is much less essential than the market and advertising. Constructing the core of a software program product takes possibly $1M. Getting that product in entrance…