Press Release
Contact: Robert Albright |
Phone: 919-549-7500 ext.123 |
CED Venture Report: North Carolina Remains in Top Ten
in Venture Investing
Lack of Seed Stage Financing Lingers as a Continued Concern;
CED's Venture 2004 Offers Best Insight into NC Venture Environment
April 21, 2004, Research Triangle Park, NC - The Council for Entrepreneurial Development (CED) today released its annual Venture Report highlighting North Carolina venture capital investing in 2003. The report (www.cednc.org/publications/vc_report/2003.pdf) was released in advance of CED's 21st annual Venture conference, scheduled for April 27-28 at The Friday Center in Chapel Hill.
Among the most significant findings of CED's annual Venture Report:
- North Carolina companies raised more than $442.33 million in venture capital investments in 2003. The state's total represents a 22 percent decline from 2002 versus a decline of 14 percent for the nation as a whole.
- Despite a decline in venture capital investments, North Carolina ranked in the top ten nationally for venture investments for the second year in a row. The state came in at #10 nationally in both total capital raised (versus its #9 ranking last year) and total deals completed (versus a #6 ranking last year).
- While the dollars invested in seed stage companies grew by 215 percent and the size of the average seed deal grew by a factor of almost 5X, the number of deals decreased by 35% (from 14 to 9), a year-over-year decline for two years in a row in North Carolina.
- North Carolina maintained its lead in the Southeast by outpacing states such as Virginia, Maryland, Georgia and Florida. However, high growth in New Jersey, Colorado and Pennsylvania and continued leveling in historically strong states such as California, Massachusetts and Texas significantly outpaced North Carolina's 2003 performance.
- In 2003, North Carolina ranked fourth nationally in terms of total dollars raised by life science companies ($235.23 million total), with the sector claiming an even greater portion of the state's total dollars with 53.2 percent versus 50.2 percent in 2002. New Jersey was the only other state where the life science sector claimed more than 50 percent of the total venture capital raised.
CED President Monica Doss said the Venture Report outlined the challenges and opportunities for venture financing in North Carolina, and highlighted the continued lack of seed stage funding as a key area for improvement.
“While we're encouraged by the increase in the seed dollars invested, the fact that the number of deals didn't get out of the single digits raises significant concerns,” Doss said. “And the size of the deals indicates that companies getting funded are much farther along in the pipeline than we've historically seen. This creates a bottleneck which can easily impact future investing opportunities.
“North Carolina has all of the assets to become 'the next great place' for innovation companies, but if we don't start investing additional resources in our fledging companies, the pipeline will dry up. Other states are aggressively looking at new approaches to seed capital that could diminish the lead we've been building over the last 20 years.”
CED's Venture 2004 conference will complement the Venture Report by showcasing North Carolina's innovation economy and investment opportunities. In addition to presentations from 27 of the state's most promising innovation companies, Venture 2004 also features leading speakers from business and government. Since 1999, Venture presenters have raised over $1.5 billion in venture capital.
About Venture 2004: CED's 21st annual Venture 2004 - Where great minds meet smart money - is scheduled for April 27-28 at The Friday Center in Chapel Hill, NC. The conference is presented with support from UNC Kenan-Flagler Business School and The National Venture Capital Association. Last year's conference, Venture 2003, drew a crowd of more than 800 investors, service professionals, entrepreneurs and others involved in the entrepreneurial funding process from throughout the United States. For more information on presenting companies, sponsorship or general registration, visit www.cednc.org/venture.
About CED: The Council for Entrepreneurial Development, located in Research Triangle Park, NC, is a private, non-profit organization 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 through annual conferences, seminars, workshops and monthly programs on entrepreneurial management and finance. CED, which celebrates its 20th anniversary in 2004, is the largest entrepreneurial support organization in the nation with more than 3,500 members representing 1,000 entrepreneurial companies, financiers and professional firms. www.cednc.org
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