First-quarter venture capital funding and deal flow for North Carolina firms both fell sharply from a year ago, according to a report from CB Insights.

A total of 16 deals were made that met CB Insights criteria for its Venture Pulse report.

The deals were worth $160 million.

A year ago, 18 deals totaling $224.2 million were made, according to data CB Insights provided to WRAL TechWire.

More clarity will come later this week.

It’s the first of three major reports that examine what’s happening in startup financing. Dow Jones VentureSource and PricewaterhouseCoopers’ MoneyTree reports are still to come. And each of the three report data differently based on guidelines that often differ. Each also has its own sources for information, and some deals are not disclosed due to confidentiality.

For example, PwC reported $675 million in VC deals for North Carolina firms in 2015. CB calculated deals as being worth $817 million.

The funding news regardless of source was the best for NC startups since the “dot com” boom.

The Council for Entrepreneurial Development’s Innovators report, which used its own criteria and sources as well, said deal making across all fund-raising totaled some $1.2 billion.

So …

Is North Carolina in for a challenging year?

Based of SEC filings, as WTW reported last week, the picture appeared to be different.

So far in 2016, there have been 64 deals filed. That’s not an extraordinarily high number, but 31 came in March.

The deal flow totals some $214 million with the money pretty evenly spread across each quarter.

The March filings show some $65 million was raised across the state.

In February, 12 deals generated $85 million. Most of that came from two life science deals.

January drew 21 deals and some $94 million.

The U.S. picture

2015 was a boom year for U.S. deal making, but CB Insights found that 2016 may not match it – at least in deals closed.

“Deal count to US VC-backed companies remained anemic, slipping a further 2% from Q4’15. Funding dollars rose 6% to $14.8B but was still well below the quarterly totals from the heady days of Q4’14 to Q3’15.”

Overall, CB Insights warns that startups face a challenging environment.

“This is the new reality. It’s harder to get financed at all stages, harder to raise massive rounds of financing, and harder to get the much coveted unicorn valuation,” said Anand Sanwal, CEO and co-founder of CB Insights.

So what’s going on?

“Skepticism of sky-high startup valuations, a non-existent IPO market, public market uncertainty, and larger macro-economic concerns” are driving the worries, CB Insights concluded.

In all, 1,829 deals were made worth $25.5 billion.

Deal flow has fallen for three straight quarters.

Other highlights:

  • “Late-stage deal sizes shrinking. Mean late-stage deal size in North America plunged to $21.5M in Q1’16, down from $30M in Q4’15, and $34M in Q3’15.
  • “More signs of seed fatigue. Series A rounds outpaced seed deals, reversing the trend from previous quarters.
  • “New York sees growth. NY has now outpaced Massachusetts for deal activity in each of the past 5 quarters. It was also the only state of the top 3 with both deal and funding growth from Q4 ’15. [California leads, as usual].”

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