Startups and emerging firms that the Council for Entrepreneurial Development defines as “entrepreneurial companies” are off to a slower start in 2016 when it comes to fundraising. That’s according to data in the CED’s new Innovators Report.
These firms raised a total of $169 million in venture capital, angel, corporate, growth equity, family office and strategic investments. That total is down, however, from previous quarters as tracked by the CED.
How CED reports capital is different from venture capital reports, which focus exclusively on that form of investment.
And the CED total is much higher than VC funding as calculated in three major VC reports. So, too, is the number of deals (33).
- The MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association released in April said North Carolina startups and emerging companies raised $111 million spread across 17 deals.
- CB Insights reported 16 deals totaling $160 million.
- VentureSource from Dow Jones cited 12 deals worth just under $103 million.
Since CED launched its Innovators Report three years ago, the Durham-based group has said it believed there was much more investment activity than noted in the VC reports and wanted to document that data.
(The CED also wraps up 2015 with data on grants and awards, the annual total surging past $1.25 billion.)
“In the first quarter of 2016 we continued to see emerging North Carolina companies get funded and maintained strong interest from out-of-market investors,” said CED CEO Joan Siefert Rose in the report, which was published early Tuesday. She said the CED wasn’t caught off guard, noting that investments and deals have slowed in recent months.
“Given the national fundraising trends and current economic climate, we didn’t expect this quarter to keep up with the record-setting pace of 2015,” she said. But Rose called the quarter as being “solid,” one that will “help many of this state’s companies continue to grow and scale.”
Dhruv Patel, CED’s Director of Investor Relations, added. “North Carolina continues to see solid investment activity for seed stage companies. The report does show, however, a slowdown for companies looking to raise Series A funding and beyond, which is consistent with what other regions are experiencing across the country.”
The Innovators Report notes that the 33 deals included 45 “unique institutional investors.”
However, the CED points out the first quarter is the weakest start to a year since 2013 – the year it launched the Innovators Report.
It’s also the lowest quarter since $85 million generated in the third quarter of 2014.
Here’s a breakdown on funding in a variety of categories:
Life science companies raised over twice as much as tech companies.
- Tech: 14 companies brought in nearly $52 million
- Life Science: 17 companies completed 18 deals, totaling over $113 million
- Cleantech: 1 company raised almost $4 million
- California, 11
- North Carolina, 8
- Illinois and Massachusetts, 3 each
- China, 2
- Belgium, 1
- Canada, 1
- United Arab Emirates, 1
The exits (11):
“Most notable,” says CED:
- Biologics, Inc., acquired by McKesson Specialty Health
- clearXchange LLC , acquired by Early Warning
- Clintrax, acquired by Copernicus Group IRB
- Clinverse, Inc., acquired by Bioclinica
- Consolidated Asset Recovery Systems, Inc, acquired by Greenridge Investment Partners
- ESP/SurgeX, acquired by AMETEK
- Overture Networks
Read the full report at:
Sources for the CED report include SEC Filings, media coverage, CED partners, and entrepreneurs.