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11.27.2006 3:19 pm

St. Louis gains favor with VCs

St. Louis Post-Dispatch
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A survey by BioEnterprise says health-care venture capitalists are finding higher-quality deals in St. Louis than in most Midwestern cities, but the gateway city still trails Minneapolis, Cleveland and Pittsburgh.

BioEnterprise, a Cleveland consulting firm, asked 54 venture capitalists to rank the quality of health-care deals they had seen in various cities. On a scale of 1 to 10, Minneapolis scored 9.25, Cleveland 6.83, Pittsburgh 5.71 and St. Louis 5.50.  Wisconsin and the Ann Arbor/Detroit area were next, tied at 5.06. St. Louis’ score improved since the 2005 survey, when it stood at 5.08, but it was part of a generally improving climate in the Midwest. Chicago was the only city to see its score decline this year.

In general, BioEnterprise says, dollars follow reputation. “Through the third quarter, Midwest health-care startups have reported a 36 percent increase over the like period in 2005, outpacing the sector’s growth rate nationwide,” Baiju R. Shah, president of BioEnterprise, said in a news release announcing the survey results. “The regions attracting the most investment are those rated highest by investors.”

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