Editor’s note: In honor of Dave Rizzo’s selection as a Full Steam Ahead Award for lifetime service from WRAL TechWire, this story originally published on Feb. 12 is being reprinted. For details about the award, see the story published today and linked to this story.
RESEARCH TRIANGLE PARK, N.C. – North Carolina’s startup community has come a long, long way since the dark days of the “dot com” bust in 2002.
In 2015, startups and emerging companies raised more investment capital than in any year since the boom’s pinnacle.
While success has many fathers, as the saying goes, one leader deserves a big share of the credit for the revival and the remarkable state of startups today across the state. There are 250 startups alone in various stages of development spread among American Underground facilities across the Triangle. The First Flight Venture Center in RTP is filled. HQ Raleigh, facing its own space crunch, is adding more square feet. More than 10 startup hubs and incubators exist now where a decade ago there wasn’t much other than First Flight. over the past three years, IPOs and acquisitions (“exits”) have surged. There may even be some “unicorns” (startups valued at $1 billion) in development.
But this success is not a one- or even five-year development.
As ChannelAdvisor co-founder and chair Scot Wingo told WRAL TechWire when asked about the state’s investment rebound in 2015 from near-irrelevance in recent years, the success being enjoyed now took 20 years to build.
And it’s time to salute a man who has been a key driver in that “ecosystem” building from the ground floor up.
His name is Dave Rizzo.
(See two stories from WRAL TechWire’s archives that help put his impact into perspective.)
Rizzo retired last summer as CEO of NC IDEA, heading off into a well-deserved retirement after establishing an enduring legacy as an entrepreneur, technology leader, venture capitalist and economic developer.
Writing as The Skinny since the launch of WRAL TechWire (then known as Local Tech Wire), I first came to know Rizzo as he emerged from Charlotte to become a state-wide force. After selling his own startup, Osprey Systems, the long-time IBM executive took on the role as chair of the North Carolina Electronics and Information Technology Association, or NCEITA. it’s now known as NCTA. Among the early initiatives undertaken by NCEITA CEO Joan Myers was a new marketing campaign:
North Carolina, the State of Minds
The slogan has stuck. But it’s probably more true today than when first unveiled. And a review of history shows Rizzo’s role.
In June of 2002, Rizzo took over as head of MCNC – the Microelectronics Center of North Carolina – shortly after the MCNC board had decided to split it in two.
Rizzo was hired to lead the newly formed investment group, which shared a nest egg from the MCNC Foundation, a source of dollars accrued through MCNC’s various investments and spinoffs. Much of the money came from the sale of Cronos for $565 million to JDS Uniphase.
A new idea
In 2005, Rizzo renamed MCNC Ventures as the North Carolina Innovative Development for Economic Advancement. It’s now known simply as NC IDEA.
As Local Tech Wire reported at the time:
“The company’s new identity is focused on a renewed commitment to supporting business innovation and economic advancement in NC, Rizzo said.
“The organization will now provide grants, loans and traditional venture capital to early-stage technology companies based in NC.
“Further support will be given to portfolio companies through partnerships with key players in the entrepreneurial community, he added.”
Here’s a quote that explains his vision:
“The partnerships we’ve established and can leverage are one way NC IDEA is distinctively different from a traditional venture firm. NC IDEA’s mission is to ensure innovation and success by infusing North Carolina’s entrepreneurial companies with needed capital and support-these alliances allow us to further this mission by providing our portfolio companies with an expansive resource network.”
The ROI for North Carolina
And according to NC IDEA data, here are the results – or ROI, return on investment in a sense; the grants are not for equity so the payoff is the development of successful companies – since the first grants were awarded in 2006:
- 104 grants to startups
- These are non-dilutive and are worth as much as $50,000
- Over $4.2 million has been awarded.
- Of those firms, 73 percent remain in business
- Two of the startups have made fine exits: Automated Insights in Durham which was funded in 2009, and Arcametrics, a 2012 grant winners
- NC IDEA backed companies have gone on to raise over $115 million in equity fund
- Additionally, startups have landed $33 million in non-equity funding
There’s much more to the NC IDEA story.
Expanded development efforts
In 2007, Rizzo spun off a separate for-profit venture capital firm known as IDEA Fund Partners. Providing early-stage funding, IDEA Fund has a growing portfolio of early-stage investments and it raised a new round of capital last year.
Further, NC IDEA worked with Capitol Broadcasting (the parent firm of WRAL TechWire) to launch Joystick Labs, an incubator focused on new gaming companies. Joystick later evolved into Groundfloor Labs, which is funded by NC IDEA and provides startup mentoring services to selected new companies.
Two years ago, NC IDEA provided a $250,000 grant to the Council for Entrepreneurial Development, the intent being to help the group fund new strategic initiatives and help raise further the Triangle’s reputation as a haven for new, big ideas.
Now let me hasten to point out that Rizzo would be the last to claim credit for what NC IDEA, and before it MCNC and NCEITA, has accomplished. He’s just not cut from the same cloth as some in the tech and investment community who believe the world revolves around them.
There was no boast, no claim for credit, when the time came for him to step aside.
“I welcome the opportunity to transition to a less active role to allow me more time to pursue personal interests,” Rizzo said in his retirement announcement.
The Skinny is far from alone in extending him best wishes and an enjoyable retirement.
That would be a successful ROI for a remarkable career.
Here’s a tip of The Skinny’s cap to you, Dave.