In a Q&A, Bull City Venture Partners’ Jason Caplain talks about the findings of the firm’s first public survey of more than 200 tech startup and emerging firm CEOs. In a word, they are positive. Well, make that very positive.
Based on the responses, it appears startup and emerging company executives are for the most part very positive. Were you surprised by that? You and partner David Jones have your thumbs on the pulse of many entrepreneurs. Why the enthusiasm?
Over $75 billion got invested into companies throughout the US last year. That is 2x pre recession levels. So entrepreneurs have a lot to be excited about!
Even in our own State, North Carolina companies landed over $1 billion. From the data we’ve seen, that is 150% increase from 2014. There was a lot to celebrate.
More than half envision over 100 percent growth this year – that’s pretty strong isn’t it?
That’s incredibly strong.
Its also important to note that those growth numbers come from tech CEOs leading companies of various sizes, even down to the early stage companies. But 90% of the companies surveyed said they will grow over 20%.
Apparently everyone is going to have a great year! 🙂
What’s your reaction as a funder to the belief by 88 percent of entrepreneurs that 2016 will be a challenging year? NVCA reported very good VC fund raising last year following a strong 2014 and 1Q 2016 was very strong at $12B. It appears there is capital readily available.
There is a lot of capital in the system. But the data from Q4 2015 points to a sharp downturn in the number of companies that closed on financing and with valuations.
Leading into 2016 there was a survey we read recently where 82% of VCs expressed caution or concern entering into the year.
Although 2015 was a strong year, we expect what happened in Q4 2015 to spill over into 2016 and 2017.
What are those seeking funds (nearly 60 percent may seek funding) going to have to do to land funding? Anything different than in the past?
We always feel the highest quality companies led by the best entrepreneurs can secure funding almost independent of the environment. If the market continues to pull back, then raising capital will much more competitive.
Any surprise that 40% planning to seek funding aim for $1-$5 M? vs. 12 percent for larger rounds?
I think it matches up pretty close to the size of the businesses we were able to survey. For example, 50% of the companies that suggested this range last raised a seed round.
So they will be out looking for a Series A.
Growing revenue is never easy as the survey shows but “hiring good people” as the second highest challenge – why are “good people” hard to find?
It has become a more competitive market for all our portfolio companies. Companies we surveyed want to increase their headcount by 38% in 2016.