RESEARCH TRIANGLE PARK – Startups looking for funding as the COVID-19 pandemic continues may have a tougher time finding investors in coming months even though numerous Triangle firms have already closed on deals in the first quarter of this year. And since deals often take months to negotiate other investments may remain in the pipeline. But …
A new survey from PitchBook among venture capital and private equity investors finds that many are pulling back on deals.
While Triangle firms closed on a nice deal flow recently with numerous deals (see a partial list below), the trend could very well slow to a trickle. And if VC dries up startup execs can at least turn their attention to a variety of loan offerings from the Small Business Administration – emergency and Paycheck Protection Plan offerings – as well as various grants such as from the National Science Foundation as well as a recent program launched by the Golden LEAF Foundation. Even Mecklenburg County is offering up to $5 million in loans to startups across the Charlotte metro area. (Check out our exclusive Startup Guide for more info.)
But on the VC side …
Nearly half – or 47 percent – of general partners at venture firms say they expect “capital deployment” will tumble in 2020.
Some 35 percent say investments will fall “at least 10 percent” and another 12 percent expect up to a 10 percent drop, PitchBook says.
However, some 28 percent do expect to increase investments.
On the fund-raising front, PitchBook reports that “a majority said travel restrictions are a large or medium impediment to raising capital.”
Private equity snapshot
Many private equity deals remain in progress, PitchBook reports, noting that “investors seem hesitant or unable to reset plans at this point.”
However, limited partners that back PE funds are pulling back. Some 29 percent said they are suspending commitments “over the coming six months.”
Read more about the survey online.
Here’s a snapshot of recent local VC deals from WRAL TechWire news
Triangle cloud data startup CData Software lands $20M investment
Durham’s Teamworks, founded by former Duke football player, lands $25M in Series C funding
Durham software startup helping student athletes transition to workforce raises $235,000 in equity
Durham fintech PatientPay cashes in on growing digital pay solutions demand, raises $6.15M
‘Sales acceleration’ software startup ZynBit raises $250,000
Raleigh agtech startup Plant Health Care raises another $2.3M
