WRAL TechWire asked several players in the North Carolina startup/entrepreneurial ecosystem what they thought about the fourth quarter NVCA/ Pitchbook reports on the venture surge in the second half of 2020.
David Gardner, of Cofounders Capital, is known for his mentoring and support of the venture capital, angel, and entrepreneurial world in the Research Triangle and NC. He offers some insights the basically upbeat NVCA/Pitchbook report did not emphasize.
In 2020, he said, “We worked closely with our portfolio companies last year to right-size early on and as such all survived the slowdown in sales.
“We also walked several of them through the PPP loan process which helped some of them. Our companies, for the most part, are back on plan and growing again but much of last year was treading water from a growth perspective.
“At the national level, according to Pitchbook, investments in VC-backed companies hit a seven-quarter high last quarter, up 22% year-over-year and up 30% from Q2. Even with a late-year surge, overall investing for the entire year is still down 11% from 2019.
“Many of our companies let their office leases expire preferring to stay virtual. This has led to a wider candidate pool when hiring. Also, investors now seem more comfortable investing non-local geographies which is a good thing for early-stage ventures.”
Wilmington boom possible
Jim Roberts, uniquely, has promoted entrepreneurial and startup ecosystems in Charlotte, Western, NC, the Triangle, and currently, in Wilmington.
His comments on 2020 and the NVCA/Pitchbook stories:
“What we saw in March in the region was an effort to support the existing portfolio of companies. As the pandemic matured, regional and national investors got more comfortable with the virtual meetings even with entrepreneurs they had little to no relationship with prior to the pandemic.
“But what I heard time and time again, was that the venture funds had to put capital to work. I am also hearing that the entrepreneurs are eager to get the staff into more of a live face to face work situation to increase productivity. But maybe it is a mix of virtual days and in the office.
“We may see a boom in Wilmington as the payout terms from the IPO at nCino will happen very soon.
“We hope to see some nCino employees get the entrepreneurial itch with their earned experience of scaling a company to international markets.
“And obviously we would like to see some capital reinvested into more local startups.
“Apiture had a successful $20 million raise and will continue to grow from the Live Oak / Canapi Ventures family of FinTech companies. We have seen the $600 million Canapi Ventures fund being put to work already with some Atlanta based companies like leading the Greenlight investment.
“Wilmington was very proud to be listed in the top 100 emerging ecosystems in the world, and the third smallest US city to make the list. Raleigh and Charlotte made the same list from Startup Genome. And that work was rewarded with a new NC IDEA Ecosystem grant for a new Precelerator program for Southeast North Carolina.
“With the nCino IPO, the NextGlass / UnTappd large private equity investment from Boston and the smaller PlayerSpace acquisition by Daxco, Wilmington has now proven the capability to help companies get from ideation to exit with all credit to the excellent experienced entrepreneurs at the coast.
“We are eager to help companies like OpiAid, Brilliant Sole and others get the resources they need while companies like EasyVote, Lapetus Solutions and Performance Culture mature and scale.
“AvidExchange in Charlotte seems to be heading towards an IPO in 2021 which would be great for the Charlotte ecosystem. The founder Michael Praeger used to attend my FirstRound ecosystem organization events in the early days between 2000- 2003.”
Biotech brewed a hot year
Vivian W. Doelling, Ph.D, vice president of investments at the NC Biotechnology Center, said biotech investment in 2020 and ongoing “is just rolling.”
Doellng notes the Biotech Center has funded 230 early-stage biotech companies since 1989, funds that many firms have told WRAL TechWire were crucial to their establishing their business.
“We expected the COVID pandemic would slow things,” she said in an interview. “That did not happen at all. Our good companies are getting funded. And it’s not only surprising that they’re getting funding, but also how much they’re getting.”
One factor contributing to the good year in Biotech investing pointed out in the NVCA/Pitchbook report, Doelling said, was that investors not usually life science investors entered the fray. “The COVID and vaccine market was a boom, but it was across the board, therapeutics, medical devices, gene therapy, and diagnostics.”
Although most venture capitalists we talk with say they’re ready to go back to face-to-face interaction, Doelling said she believes the switch to mostly virtual pitches speeded things up. “Now you could make six pitches a day,” she said.
She said that when the Center pitches NC as an ideal location now, “They already know us. We’re on the map. NC has been just growing its reputation in life sciences, with a huge number of companies moving here and making investments in infrastructure and job creation.”