Press Releases
May 1, 2000 |
Council for
Entrepreneurial Development |
CED Releases Annual Venture Survey
Funding for Research Triangle Companies Increases 417%
In 1999, 96 Triangle companies completed a total of 109 deals, and the region saw a rise in the mean venture investment to $11.84 million from the 1998 average of $3.33 million. Eighty-six percent of North Carolina's total dollar investments went to Triangle companies (up from 82% in 1998), and the Triangle claimed 80.7% of the companies receiving venture money. More than 170 venture capital firms invested in North Carolina companies versus the 1998 total of approximately 90, an increase of 88.9%.
"The current Research Triangle venture capital environment looks quite different than when CED began its venture equity survey in 1986, when companies reported raising $26 million in investments," said Monica Doss, executive director for CED. "The Triangle is now raising the money necessary to support some of the hottest new economy companies, and those companies have in turn begun to select the area as the perfect place to build the nation's next wave of new billion dollar companies."
The area's largest total annual investment and the largest single investment honors both went to SpectraSite Communications, provider of network services to the wireless and broadcast industries in the U.S. and Canada, with a single deal worth more than $231.4 million. Including SpectraSite, the area's top ten recipient companies claimed more than 66.9% of the total dollars invested in 1999. Five of the top ten companies are previous CED Research Triangle Venture Conference presenters.
Investments greater than $10 million accounted for 82.9% of the region's total dollar amount, with individual deals ranging from a high of $231.4 million to a low of $20,000. The median investment measured $3.0 million. The industry sector with the greatest investment was the telecommunication sector, rising from 12.7% of the 1998 total dollar amount to 34.0% in 1999. However, as in 1998, a very small number of very large investments accounted for the total - six investments averaging $73.1 million each.
As in previous years, the majority of investments in North Carolina entrepreneurial companies appear to have come from out-of-state investors. While there was no disclosed state of origin for the vast majority of investment dollars provided to North Carolina companies in 1999, according to the National Venture Capital Association, only 8.0% of the total investment dollars were identified as having come from North Carolina domiciled funds - less than half of the total noted as invested by New York funds. Contributions identified from international investors amounted to 4.8% of the total dollars invested in North Carolina companies.
However, just because out-of-state-investors were busy in North Carolina doesn't mean North Carolina venture firms weren't busy in their own right. In fact, also according to the National Venture Capital Association, the total capital under management in NC in 1999 rose to $819.5 million (for an increase of 18.1%) from last year's total of $694.1 million. In addition, funds raised by North Carolina domiciled funds topped $175.0 million in 1999.
CED's survey figures differ from other organizations that report venture investments nation-wide due to a different reporting methodology. CED collects and verifies investment information for publication from a variety of published sources such as NVCA reports, PricewaterhouseCoopers MoneyTree© reports, and other business publications; and by directly surveying regional venture capitalists and local entrepreneurs. Vigorous efforts are made to reconcile discrepancies in all information; however, where differences occur, CED relies on direct information from the company and/or its investors.
About CED
The Council for Entrepreneurial Development, located at the CED Entrepreneurship Center in Research Triangle Park, NC, was formed in 1984 to stimulate the creation and growth of high-impact companies in the greater Research Triangle region. CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs. CED sponsors annual conferences, seminars, workshops and monthly programs on entrepreneurial management and finance. CED also offers the FastTrac entrepreneurial training program, youth programs and other outreach programs.
CED is a private, non-profit organization and is the largest entrepreneurial support organization in the nation with more than 3,000 members representing 1000 entrepreneurial companies, financiers and professional firms.
In addition to its annual Research Triangle venture report, CED sponsors a wide range of other programs in support of regional start-up and fast growing companies including the upcoming 17th annual Research Triangle Venture2000 Conference, scheduled for May 9 - 11 at the Friday Center on the University of North Carolina campus in Chapel Hill, NC. Nine hundred investors, entrepreneurs and others from throughout the United States who are involved in the entrepreneurial funding process, are registered to attend to see 35 presentations and exhibits by North Carolina entrepreneurial companies seeking venture capital. For schedules of events, presenter information, or other information about Venture2000 and other CED programs contact Jennifer Tilden, 919.549.7500 ext. 103.