Ask any entrepreneur what they need to start and grow a business, and “access to capital” will always rank near the top of their list.
To measure this demand for capital and other resources, the Council for Entrepreneurial Development (CED) produces an annual “Entrepreneurial Satisfaction Survey,” which asks Research Triangle region entrepreneurs about the critical factors for starting and growing an innovation-based business. The importance of capital continues to ring true in CED’s 2007 survey.
The need for access to venture capital, both in seed and expansion stages, remains a high priority for survey respondents. Companies relied more on angel and venture capital this year with 49% of the respondents reporting one or both of these equity sources vs. 43% last year, as well as on personal funds and bootstrapping.
While many respondents said they are relying more on equity capital to grow their company, other respondents said access to capital was still a concern moving forward. When asked to identify one thing the Triangle lacks, almost 44% of respondents cited capital, up from 34% in 2006 and 28% in 2004. Of those, the majority emphasized the need for seed and expansion capital, a larger critical mass of sophisticated investors and angel investors, and access to non-dilutive funding sources.
These findings reinforce the need for CED to continue connecting entrepreneurs to available sources of funding – whether that is through securing equity capital, bootstrapping a company, or going after grants and partnerships.
Venture capital is not the sole funding source for all companies, but it does play a critical role in igniting the success of many high-growth companies. In particular, CED’s annual Venture conference offers a showcase opportunity for innovation-based companies that are seeking initial or subsequent rounds of venture financing. Hundreds of companies have presented at the event since it was first held in 1984, making it one of the largest and oldest Venture conferences in the country.
Since 2001, high-growth companies that presented at CED’s Venture conference have raised over $1 billion in funding from angels, VCs and other strategic investors. In 2005, for example, approximately two-thirds of all the deals in North Carolina came from past Venture conference presenters.
CED’s Venture conference attracts a mix of investors, entrepreneurs, service professionals and other key players in the entrepreneurial community. Out of approximately 700 total attendees, the conference typically brings in over 250 investors from across the country to see the latest pre-screened deals.
This year’s Venture conference (scheduled for April 23-25 at the Washington Duke Inn & Golf Club) will be a truly regional showcase, with presenters from across the Southeast and Mid-Atlantic region on display. In addition to the expanded presenter geography, Venture 2007 will also feature more deals than before, with over 50 pre-screened companies at all stages of growth.
The Venture conference helps connect companies to investors, but the event also positions the region as a hotbed of innovation. Widely seen as the fastest growing economic sector in the country, the Southeast and Mid-Atlantic regions have significantly expanded their innovation pipeline over the years. With recent economic growth in the Research Triangle, Northern Virginia, Atlanta, and other up-and-coming markets like Charlotte, Charleston, Gainesville and North Carolina’s Piedmont Triad, the region’s entrepreneurial community is positioned for exponential growth.
With many of the nation’s most prolific corporate, academic and non-profit research institutions – from established powerhouses like NIH, Oak Ridge National Lab, Marshall Space Flight Center in Huntsville and the Research Triangle Institute, to the new Scripps Center in Florida and Georgia Tech/Emory’s new Nanomedicine Center and Wake Forest’s Institute for Regenerative Medicine – the region offers a window on new ideas that are being commercialized into “backable” companies.
While investors are in town at Venture 2007, they are encouraged to explore the Research Triangle’s university research and collaboration, meet experienced management and technical personnel and get the inside track on corporate/institutional research and development.
This kind of interaction between investors and entrepreneurs will only help increase the deal-flow and interest in the region’s entrepreneurial community.