RESEARCH TRIANGLE PARK, N.C. … Technology entrepreneurs have finally gotten the message that venture firms want slow and steady growth instead of a quick hit in today’s market, a new survey shows.

Ninety-three percent of entrepreneurs surveyed by the Council for Entrepreneurial Development said they believe venture firms are now more interested in building long-term profitability than in achieving a quick exit through a sale or public stock offering.

Since the Internet sector collapsed two years ago, venture firms have been frugal with their investment funds, focusing attention on a portion of their portfolio to nurture the companies through the slow economy so they have a chance to blossom when the market improves. Meanwhile, the VCs have had to turn off the funding pipeline to other companies and let them “hit the wall,” or run out of cash and cease operations, because they can’t support all of their previous investments through the prolonged economic slump.

Almost three-fifths of the entrepreneurs surveyed say they now expect to be acquired or go public, providing an exit for private investors, in two to five years, and another 29 percent envision a five- to eight-year time frame for an exit. Less than 10 percent are forecasting an exit in less than two years, which was a normal time frame during the Internet boom, according to the survey.

“The results of this survey indicate that emerging companies are facing pressure from investors to build solid business fundamentals and have recognized that, in the current business climate, success must be achieved by setting longer-term goals,” CED President Monica Doss says in a statement. “Findings also show the importance of continuing innovation to the investment community.”

Three-quarters of those polled said that a rift between some Silicon Valley venture firms and their limited partners is stifling innovation in the nation’s premier technology market. Institutional investors in recent months have forced a few venture firms to cut their management fees and return money to investors because the firms amassed huge funds two years ago that remain largely untapped because of the weaker investment climate.

The poll comes on the eve of CED’s Venture 2002 conference, one of the Southeast’s largest technology venture capital events, which will be held April 30 and May 1 at The Friday Center in Chapel Hill. Twenty-eight early-stage companies will make presentations about their businesses to an expected crowd of more than 1,000 as they seek initial private equity investments or follow-on funding rounds.

CED spokeswoman Anne Hutchison tells LocalTechWire that the support organization for Triangle-area start-up companies has never polled its membership on such topics but felt that the fluctuations in the venture market over the past couple of years warranted such a survey now.

Seventy-one member companies, representing a range of industries, from life sciences to telecommunications to information technology, were surveyed a couple of weeks ago by e-mail. The firms were selected randomly from the more than 1,200 companies on CED’s membership roster.

A similar survey of venture capitalists detailing where VCs are putting their dollars and what opportunities they see in the Triangle, will be released during the first day of Venture 2002, Hutchison says.

For more information about Venture 2002, visit