Jeff Barber was a lonely voice in the dank, gloomy world of venture capital on Wednesday.
He was excited. Positive. Upbeat.
In these days of “down rounds” if there is a round of financing, the partner-in-charge of PricewaterhouseCoopers in Raleigh went out of his way to generate some enthusiasm at the quarterly “MoneyTree” breakfast.
“For the first time ever, we have topped more than 2 percent of the total amount of venture capital invested in the United States,” Barber said, with emphasis on “ever.” “I think that’s great.”
Pointing to the bar chart tracking US investment dating back to 1996, Barber noted that NC firms raised $547 million in 2002. That was 2.6 percent of the US total. NC’s share had not topped 1.8 percent before.
“We’re rebounding faster than other people,” Barber said.
The $547 million didn’t match the $635 million in 2001 (1.5 percent) or $785 million (1.4 percent) in 1999. And that total is less than a third of the $1.8 billion (1.7 percent) generated in 2000, according to figures compiled by PwC and Venture Economics.
But Barber noted that venture capital totals are falling back to more “realistic” ranges before the “dot com” and telecom balloon in 1999 and 2000 that spiked VC totals higher than a 7.0 quake on a seismograph. As figures have dropped, he said North Carolina’s share is increasing, and it’s his belief that better days are to come.
Pointing to another chart, Barber tracked quarterly figures that turned upward after the first quarter of last year.
“We hit bottom earlier than the rest of the others, and now we’re on our way back up,” he said. “We’ve had three quarters of growth.”
NC investing hit its peak in the second quarter of 2000 at $686 million but fell like a set of stairs ($440 M, $246 M, $220 M, $169 M, $150M, $96 M, $84 M).
In the second quarter last year, the losing streak ended, bouncing up to $120 million followed by $182 million in the third. Fourth quarter totals dipped to $153, but Barber said the total still was much larger than the first quarter.
“We can’t say we’ve had three sequential quarters of growth,” he said, “but there is growth.”
Some 75 people turned out for the quarterly breakfast, getting reams of data, analysis from Barber, and insight from VCs Garheng Kong of Intersouth Partners and Joseph Zell of Grotech Capital Group.
Zell, whose firm was part of later-stage deals in Hatteras Networks and TriVirix, told the gathering that RTP is a big target on his radar. He acknowledged that for VCs and entrepreneurs alike, “This is an abnormal period,” and added, “I’m not sure what normal looks like.” The comment drew a round of laughter.
Intersouth announced this week the closing of a $205 million fund. And a number of new funds recently announced, such as by MCNC, the University of North Carolina, and BioVista, indicate money is available, Barber said.
But Barber wondered where the entrepreneurs were. He said he wanted to see more of them turning out for events like the “MoneyTree.”
“They need to get out of bed and get out here,” he said. “There are deals to be done. Even meeting the VCs face to face, and we had a lot of them here today, is important. You can introduce an idea, get to know someone.”