RESEARCH TRIANGLE PARK, N.C. – The venture capital business is going strong in the Carolinas and Georgia – at least in the number of deals, based on the latest statistics from the MoneyTree report.
Sixteen companies in North Carolina raised $122.6 million in the second quarter, and they represented a mix in both types of companies and stage of investment.
In Georgia, meanwhile, 21 firms raised $77 million.
And in South Carolina, which typically is quiet on the VC front, six firms closed on $9.8 million in funding.
The number of deal closings reflected a national trend, as documented by PricewaterhouseCoopers, National Venture Capital Association and Thomson Financial. In all, 977 deals closed – the highest number since the third quarter of 2001.
In an especially encouraging sign for entrepreneurs and startups, the percentage of seed and early-stage deals jumped 31 percent.
The statistics, which were delayed two weeks by a glitch at Thomson Financial, showed an especially good mix in North Carolina. Although all 16 deals were closed by firms based around the Triangle and thus did not reflect a good geographic spread, the types of deals and types of companies gaining funding did.
Two startup/seed companies gained funding as did five early stage firms. Four companies closed on later-stage money, and five landed expansion stage.
Perhaps most encouraging to those looking for diversity in investments and thus a spreading of risks as well as opportunity, four software firms closed on money – five if you count Digitalsmiths as software rather than a device company. The software sector has been especially quiet in North Carolina in recent quarters.
Landing money for software were BrightDoor ($1.7 million), Datacraft ($4 million), iContact ($5.35 million) and Visitar ($1.3 million). Digitalsmiths secured $6 million for its video search technology.
Of course, biotech remained strong in the Triangle witl five deals, led by Biolex at $30 million.
ChannelAdvisor, a provider of e-commerce solutions, also closed onb $30 million.
“The data implies good news all around for the venture capital industry which has been extremely active in doing what we do best – building companies from the ground up,” said Mark Heesen, president of the National Venture Capital Association, in a statement.
“Not only does the increase in Seed and Early stage deals demonstrate the number of young, promising opportunities available, but the diversity of investment strongly suggests that the prospects for innovation are all around us,” he added. “The industry is not relying on one particular sector for deals. Even better, dollars invested are holding steady or even declining, suggesting that venture capitalists are being very measured about how much money they invest per company.”
Tracy Lefteroff of PwC noted that the number of venture investments this year could reach a six-year high.
For new companies, this is good news, indeed.