Editor’s note: WRAL TechWire contributor Dr. Sarah Glova is a globally recognized speaker, successful entrepreneur, university instructor, and business consultant. A seasoned educator and entrepreneur, Sarah is CEO of the award-winning digital media firm, Reify Media, With a Ph.D. in Instructional Technology and a Master of Science in Technical Communication, she is dedicated to cultivating forward-thinking work environments.


RESEARCH TRIANGLE PARK – What’s it like to fundraise in this climate? Recently WRAL TechWire reported on troubles in the venture market—a dip in the number of venture capital deals globally and in deal value across the US.

To follow up, I spoke with Triangle-area capital experts to learn more about what this climate is like for startups.

Jason Caplain, General Partner and Co-Founder of Bull City Venture Partners (BCVP), gave me this description:

“The capital is very concentrated right now and available to extraordinary companies but dried up for everyone else,” Caplain shared over email.

Sarah Glova

David Gardner, serial entrepreneur and manager of the early-stage investment fund Cofounders Capital, told me that the tight climate is partly a cash flow issue from exit bottlenecks.

“Nationally, VC deals are down because VCs are conserving more cash for their current portfolio companies,” Gardner said in an email. “VCs and entrepreneurs don’t want to exit in a down market and leave millions on the table.”

Hunter Young, Head of Capital for the Council for Entrepreneurial Development (CED), described the exit bottleneck this way:

“In what is probably not a surprise, the pace for exits has been a little bit slower this year than in prior years as the public market window has fallen largely out of favor and the heightened interest rate environment has made financing an acquisition or buyout much more expensive than the last decade-plus on average,” Young told me in an email.

So who’s still raising?

According to Young, there is still plenty of activity in NC, despite these national and global trends.

“While the last six months of fundraising in North Carolina has not been as unparalleled as the prior few years of record-breaking activity, our preliminary data still shows a healthy amount of dollars raised so far with a current pace to match or surpass the totals from as recent as 2019,” said Young. “So in that regard, North Carolina is bucking some of the national trends, but to be fair, it probably didn’t get quite as frothy here during the past few boom years as it did in the traditional coastal venture markets—so less volatility overall.”

Gardner told me the Triangle is in “a bit of a bubble” away from the national stats, considering that companies here are still finding funding.

“We are seeing more dealflow recently than we have seen in the past two years,” Gardner said.

Caplain said that growth companies are the ones that are able to raise, and he pointed to three companies in the BCVP portfolio—GreenPlaces, Spiffy, and Levitate—who raised almost $60 million this year.

“I think this market continues to reward the companies growing with incredible speed operating in large markets,” said Caplain.

What can new or seed-stage startups do?

But what about seed-stage companies that are looking for capital, or previously-bootstrapped companies that are fundraising for the first time?

“The companies that are not hitting plan or not growing as fast are finding it’s almost impossible to raise a round led by a new lead investor,” Caplain said.

For those startups who are finding it “almost impossible,” Caplain has advice—and it’s built on the Triangle network.

“Our message to founders is to do the following,” said Caplain. “One, look at the list of VCs that have invested here. CED maintains the best list (thank you, CED). Two, go through that list and make sure you do the work to find the ones that can be a match. Three, ask the founders here in NC that have received capital from that VC for help making the introduction.”

Young also shared some advice for startups—focus on advancing their key metrics.

“Startups should remember that fundraising can be a tedious process that almost always takes longer than one might think,” said Young. “There are still a great deal of venture funds with dry powder out there, as well as angels looking for investor-friendly deals with businesses that have solid fundamentals. Companies that execute on what they can control with their business and continue to advance relevant traction metrics (revenue, customers, etc.) will remain in favor as a de-risked investment.”

Don’t lose hope—interest in NC is strong

Young said that investor interest in this area is strong.

“Many investors from other larger markets, such as New York and DC, have made NC a focal point of their investment thesis or a large part of their business development and pipeline efforts for dealflow,” said Young. “Relative to other places, NC still offers capital efficiency in terms of lower costs, as well as more reasonable valuations than in some peer markets.  These funds are traveling here just as, if not more, often than before.”

Sharing another positive perspective, Gardner said that it’s a “great time” to have a venture fund because valuations have stabilized and deal flow is high.

“It is also a great time for an entrepreneur to start a venture,” Gardner said.