Venture capitalists polled by The Skinny see little chance of another tech startup “bubble” taking place across the Triangle even though the number of emerging and new startups continues to grow at a pace not seen since the go-go days of the “dot com” boom and bust more than a decade ago.

After the sudden shutdown of high-profile startup EvoApp, the bankruptcy of biotech Biolex and the financial troubles of Zenph Sound Solutions, an appropriate question put to investors was this: Are we on the verge of another bubble?

The responses were negative, and one key reason emerged.

The latest venture capital investment statistics from both The Money Tree and Dow Jones were dismal for the second straight quarter in the Triangle as well as across North Carolina.

In other words, you can’t have a fire if there isn’t enough oxygen to fan the flames.

“I think the failure of those particular companies is probably largely a result of circumstances specific to each,” Merrett Moore of Lookout Capital in Raleigh said.

“That being said, I am concerned that the amount of quality resources and capital is insufficient to service the startup proliferation. There will be more news of failed startups and venture-backed companies.

“Whether or not that constitutes a ‘bubble’ I’m unsure, but the risky nature alone of the startup world suggests that many of these companies will not survive.”

Some VC Firms Themselves Struggle

Jimmy Rosen, a partner at Intersouth Partners in Durham, limited his remarks to the biotech and life science sector where he focuses. But in those segments he is very alarmed by the lack of early stage funding.

To him, however, the problem is NOT with the deal flow of new companies, new products and new ideas.

It’s with the venture firms themselves – not just locally but across the country.

Many are out of money with which they could fund companies not already in their portfolios, he warned. They also are having trouble raising additional funding – or have given.

A shakeup is underway in the venture industry, he says. 

Triangle-based Pappas Ventures is one of the few area funds seeking to raise new cash ($150 million), and Intersouth is contemplating a new raise. The Startup Factory successfully raised funding in order to raise its doors. New funds include Rex Health and Triangle Angel Partners.

However, people in the startup industry complain – as they have for years – that North Carolina venture funding remains weak.

Strong “Deal Flow”

Despite the lack of startup dollars, several programs are helping companies get out of the gate, so the “deal flow” for potential success stories is strong, VCs say.

Startup programs at N.C. State, Duke (which is rebooting with new leadership) and UNC Chapel Hill will help ensure a steady flow of new companies.

The Blackstone Entrepreneurs Network is mentoring startups as well.

The Triangle is also home to the first nanotechnology accelerator in the southeast, launched by Xanofi, itself an emerging venture.

NC IDEA recently funded another round of emerging ventures with the first graduates of Durham-based Groundwork Labs emerging and snagging funding.

The Triangle Startup Factory recently graduated its first class of $50,000 funded startups – six – and is now screening candidates for a new class.

Not to be overlooked is the First Flight Venture Center, which continues to host and help develop startups.

And in Raleigh, Cherokee Investment Partners selected three firms for its Cherokee Challenge. Each receives $20,000 in funding and other support.

Meanwhile, some 18 of 36 companies that went through the Durham’s Bull City Startup Stampede launch program remain in Durham.

But how many of these companies will long survive, especially if starved for funding?

Darwin at Work

Chris Heivly, the co-founder of the Startup factory, flatly declares “no bubble” in response to the flow of new companies.

“Just Darwinian forces at work,” he added about the recent failures.

“Failure rates are and should be higher than they appear to be,” Heivly added. “These were just a little more visible.

“I use the Darwin term and reference all the time. It works.”

David Jones and Jason Caplain at Southern Capitol Ventures said a tougher economy and lack of cash hasn’t hit the startups. They cited the “proliferation of accelerators and incubators.”

They are concerned about capital, however, citing a “severe lack” of cash in the southeast and Mid-Atlantic “especially at the earliest and seed stages.”

In other words, all those new companies emerging from labs, incubators and accelerators still face a tough fight for survive.