A Review of North Carolina Venture Capital Tech Investing
By Zack Mansfield
From 2009 to the First Half of 2012
While it is generally accepted that it is cheaper than ever to finance a tech company, it is still generally true that to grow to true scale can require considerable time and capital. The ten companies that raised more than $10MM raised a total of $172.5MM. It’s interesting to note the amount of time since first round of financing for the companies in this grouping. As noted in the chart below, the average time since initial institutional round is 1519 days, or more than 4 years. This group includes Bandwidth.com, which raised an initial round of institutional funding of $22MM in March 2011 and Overture Networks which first raised money in 2001. The majority of the companies in this band raised initial rounds sometime between 2006-2009.
Many entrepreneurs are probably asking the question, “Who is funding these companies?” Or, said differently, “Which funds have shown the appetite to invest in North Carolina over the last few years?”Below is a listing of the firms which have made more than 1 investment in the region since 2009: Intersouth Partners (9), Idea Fund Partners (7), The Aurora Funds (3), Acorn Investments (2), Capitol Broadcasting Company (2), Intel Capital (2), Noro-Moseley Parnters (2), Novak Biddle Venture Partners (2), OCA Ventures (2), Trinity Ventures (2), Valhalla Partners (2), Venrock (2)
Other notable firms who have made at least one investment during the period since 1/1/2009 include: .406 Ventures, Battery Ventures, Canaan Partners, Chrysalis Ventures, CourtSquare Ventures, FirstMark Capital, Felicis Ventures, Frontier Capital, Great Oaks Ventures Capital, Greycroft Partners, Grotech Ventures, Harbert Ventures, JMI Equity, Madrona Venture Group, Oak Investment Partners, RRE Ventures, Southern Capitol Ventures, SunBridge Capital, TDF Capital, Tomorrow Ventures, True Ventures, Updata Partners, and Zelkova Ventures.
On a final note, there is some concern when looking at the data at the lack of total investments during the first half of 2012. There were only nine (9) total investments through 6/30/2012, totaling just more than $14MM. Of these deals, three (3) are for companies raising an initial round of fuding. While there was a $5MM raise for Knowledge Tree announced in July that will increase these numbers, unless there is a sharp increase in activity during the 2nd half of the year, it is likely 2012 will feature the lowest number of deals and total dollars raised by tech companies since the financial crisis of 2008-2009.