North Carolina’s percentage and ranking in venture capital raising increased in 2002 as national funding dropped by nearly 50 percent, according to the annual VC report from the Council for Entrepreneurial Development.
The CED released its findings on Tuesday, and they reflect the numbers announced earlier this year by PricewaterhouseCooper and the National Venture Capital Association.
For the first time, the CED said, North Carolina cracked the top 10 in fund raising with $567.44 million. That was good for ninth place as compared for 16th in 2001.
Even though the total was a drop of 18 percent from 2001, it also showed North Carolina was not hurt as badly as many other states in the national funding drop. US investing dipped to $21 billion, down from $44 billion the previous year.
“We’re extremely pleased about North Carolina’s venture progress in this uncertain economy,” said Monica Doss, president of the CED. “However, we mustn’t rest on our laurels.”
So far this year, North Carolina has raised $92 million in 14 deals, according to tracking by LTW. Through the first quarter state firms had raised $85 million, on par with a year ago.
The national ranking is interesting, but Jeff Barber, partner in charge for PwC, used the same figures in pointing out to Local Tech Wire recently other trends he saw in the figures.
“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. “I think that’s great.”
Tracking US investment dating back to 1996, Barber said the $547 million represented 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 $635 million raised in 2001 was 1.5 percent of the national total. The $785 million raised in 1999 represented 1.4 percent. NC’s best year – $1.8 billion in the boom year of 2000 — represented 1.7 percent of the national total.
The top 10 states were:
1. California, $9.5 billion
2. Massachusetts, $2.4 billion
3. Texas, $1.3 billion
4. New York, $803 million
5. Maryland, $625 million
6. Washington, $599 million
7. Georgia, $588 million
8. New Jersey, $568 million
9. North Carolina, $567 million
CED, which released the report as part of its preparations for its annual Venture conference on April 22-23, also pointed out that North Carolina ranked third in life science fund raising with $284.77 million.
California raised $2.1 billion. Massachusetts was second at $717 million. Maryland was fourth at $217 million.
How important has life science become to the state? Funding made up 50.2 percent of the North Carolina total.
Increasing entrepreneurship in the Triad also was reflected in the totals. Piedmont firms generated $56.8 million versus $4.95 million the previous year.
RTP remained the VC driver, however, generating $427.54 of the state total and 77 of 97 investments.
Most deals were later stage companies, some 53 percent. Doss said that statistic is reason for concern.
“The relative decline in seed and early stage investments is an important issue we all need to aggressively address,” she said. “If we’re going to continue fostering a fertile investment environment, the state must capitalize on our strong scientific base throughout the research and technology pipeline.”
To view the report, go to: www.cednc.org/e-source/pub/nc/venture/2002.pdf