If the global recession/depression of 2008-2009 is really over, few in North Carolina’s startup world seeking venture capital would know it.
The number and value of venture capital deals across North Carolina increased in the second quarter, but the investment dollars plunged from the first quarter, Dow Jones Venture Source reported today. In other words, companies looking for institutional investors aren’t finding many backers.
That’s the case despite several facts that should be encouraging local investing:
- IPOs, such as the recent exit by VC-backed ChannelAdvisor
- A continuing surge of investment-stage startups, such as those launched by the Startup Factory in Durham
- And a reviving angel funding community that includes a number of new funds
According to VentureSource, 10 North Carolina firms landed venture funding in the second quarter. That’s up sharply from the mere six in Q2 2012, which was part of a disastrous year for the state that produced a mere $201 million in VC dollars.
The latest deals only produced just over $68 million in funding, however. That’s an improvement over the $59.88 million of a year ago. However, the first quarter of this year produced eight deals and $124.6 million.
Nationally, by the way, VentureSource says investments have declined four consecutive quarters to the lowest level since the first quarter of 2010.
Analysts like to look at previous year performance as being a better indicator of trends rather than quarter-to-quarter, so let’s look at the VentureSource numbers back to 2009 to see if N.C. venture funding has rebounded.
- Q2 deals: 12
- Value: $112.15 million
- Yearly total: $304 million
- Q2 deals: 15
- Value: $79 million
- Yearly total: $358 million
- Q2 deals: 12
- Value: $76.2 million
- Yearly total: $392 million
- Q2 deals: 6
- Value: $59.88 million
- Yearly total: $201 million
- Q2 deals: 10
- Value: $68.3 million
- Yearly total thus far: $193 million
Clearly, 2013 is going to be a better year than 2012 for deal-making, but what’s exciting about that?
FYI, PriceWaterhouseCooper’s MoneyTree report releases its data on Friday. These reports always differ, so it will be interesting to see if the MoneyTree reports any significant differences.