DURHAM – North Carolina entrepreneurs raised over $1 billion in capital in 2017 according to the just released annual Innovator’s Report from the Council for Entrepreneurial Development (CED). According to its data, 173 North Carolina based companies raised $1,125,749,682 across 224 deals.
It’s the highest number of deals seen in the state since CED began tracking the data in 2013 and a 19 percent increase since 2016. The funds raised ranks slightly behind 2015’s banner year, but only by $56 million.
The Charlotte region and tech companies led the funding year, with over 55 percent of all deals going to Charlotte-based companies and 70 percent of all deals going to tech companies. The top five largest raises all went to Charlotte-based and technology companies.
Jay Bigelow, CED’s Director of Entrepreneurship says, “These big deals matter not just for Charlotte but for the state,” said Bigelow. “It’s exciting to see this activity in Charlotte, particularly the fact that the number of deals doubled.”
Despite Charlotte’s dominance in terms of the amount of funds raised, the Triangle’s deal volume remained higher than Charlotte’s. Of the 224 total deals, 140 or 63 percent of all deals—occurred in the Triangle.
Investments in life science companies dropped this year after a two-year rise, with life science companies accounting for 24 percent of the total funding for the year. Tech companies raised a collective $784,522,003 while life science companies raised $269,850,572.
CED’s personal touch in collecting the data for the Innovator’s Report creates a more comprehensive snapshot of North Carolina’s fundraising ecosystem than other venture reports like the National Venture Capital Association (NVCA). In CED’s dataset deals include venture capital, angel, corporate, growth equity and strategic investments. They track the data by first compiling information from Form D submissions to the Security Exchange.
They then validate the information with the companies or add additional funding figures if companies indicate they raised more funding than disclosed.
Finally, they validate their data with other sources who collect the same data—like the North Carolina Biotechnology Center, PwC, and NVCA. Unlike other groups collecting funding data, they track grants.
Additional interesting trends in this year’s report include the rise in volume and size of seed deals—a direct contradiction to the national decline of seed deals—and a market increase in size and frequency of convertible notes as a funding mechanism. Stay tuned for a deeper dive into these trends.