Investment in start-up biotech. companies outside the USA has essentially disappeared. VC investment in biotechnology and healthcare as a whole has nearly returned to pre-2008 levels, but almost all is in later stage opportunities. But companies continue to be founded, and continue to flourish. We examine the VC investment patterns for the past 7 years, and show that a start-up today can expect little VC support. We show from companies’ financial records that companies are adopting financial models based on angel investment, grants and revenue, and moving away from business models that need substantial investment. There is a time lag, but government and research council policy is beginning to recognize and align with the new investment realities. We believe this trend will accelerate as internet-mediated angel investing, such as crowd-funding schemes seen in other sectors, become a developing force in the next decade.