Press Release
Contact: Rosalyn Gell |
Phone: (919) 549-7500 ext.107 |
CED Venture Report: North Carolina Returns to Top Ten in Venture Investing
Lack of Seed Stage Financing Lingers as a Continued Concern;
CED’s Venture 2006 Offers Best Insight into NC Venture Environment
April 27, 2006, Research Triangle Park, NC – The Council for Entrepreneurial Development (CED) today released its annual Venture Report highlighting North Carolina venture capital investing in 2005. The report (www.cednc.org/resources/reports_and_surveys/vc_report/2005.pdf) was released in advance of CED's 23rd annual Venture conference, scheduled for May 2-3 at Pinehurst Resort in Pinehurst, NC.
Among the most significant findings of CED's annual Venture Report:
- North Carolina companies raised more than $530 million in venture capital investments in 2005, which represents a nearly 40% increase from 2004.
- North Carolina received its all-time highest national ranking (#8) in total venture capital investments in 2005.
- In 2005, North Carolina ranked third nationally in terms of total dollars raised by life science companies ($288 million total), with the sector claiming an even greater portion of the state's total dollars (58 percent compared to 38 percent in 2004). No other state’s life science sector claimed more than 50 percent of the total venture capital raised.
- As a segment, North Carolina’s later stage companies saw a significant year-over-year increase in overall dollars raised (79 percent more than 2004) and number of deals (67 percent more than 2004). As a result of this trend, North Carolina’s average deal size increased from $5.5 million in 2004 to $8.99 million in 2005.
- Despite a sizable increase in total venture dollars, North Carolina’s seed stage investments dropped over 60% compared to 2004 levels. CED’s report underscores a declining trend in North Carolina’s seed dollars ($14 million in 2003, $7.7 million in 2004 and $3 million in 2005).
- North Carolina overtook Georgia as the leader of the Southeastern region, while also passing Maryland to rise to 8th nationally from its 12th place finish in 2004. Traditionally strong states California, Massachusetts and Texas repeated as the top three states in both dollars and deals.
CED President Monica Doss said the Venture Report outlines the challenges and opportunities for venture financing in North Carolina, and highlights the key areas for improvement.
“While North Carolina is back on track in terms of total funding, the lack of seed financing continues to be of overwhelming concern,” Doss said. “This year’s 60% decline follows a 40% decline last year, while at the same time CED is seeing more start-ups and pre-start ups in competitive emerging technologies. Compared to national trends, our seed capital resources are lagging.”
“Other states are aggressively looking at new approaches to seed capital,” Doss continued. “Full funding for the North Carolina’s innovative SBIR/STTR matching program will help. To remain competitive, we need to encourage new public and private initiatives to help to meet the early stage funding demand. We’ve seen great returns from grants and loan programs offered by the North Carolina Biotechnology Center and expect the same from NC IDEA’s new programs, but those alone can’t close the gap.”
CED's Venture 2006 conference will complement the Venture Report by showcasing North Carolina's innovation economy and investment opportunities. In addition, Venture 2006 will offer 27 company presentations, keynote comments from author and inventor Ray Kurzweil, extensive networking opportunities and exclusive investor-only events.
About Venture 2006: CED's 23rd annual Venture conference Where Great Minds Meet Smart Money is scheduled for May 2-3, 2006 at Pinehurst Resort in Pinehurst, NC. Last year’s conference, Venture 2005, drew a crowd of more than 675 investors, service professionals, entrepreneurs and others involved in the entrepreneurial funding process from throughout the United States. www.cednc.org/venture
About CED: The Council for Entrepreneurial Development (CED) is a private, non-profit organization formed in 1984 to identify, enable and promote high growth, high impact entrepreneurial companies and to accelerate the entrepreneurial culture of the Research Triangle and North Carolina. CED is the largest and oldest entrepreneurial support organization in the nation with more than 4,000 members representing over 1,100 entrepreneurial companies, financiers and professional firms. In July 2005, Wilmington’s Coastal Entrepreneurial Council merged with CED to create CED-Coastal, a divisional office focused on entrepreneurial development in Wilmington and throughout North Carolina’s entire coastal region. CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through annual conferences, seminars, workshops and programs on entrepreneurial management and finance. www.cednc.org
###