Venture Capital Report: 1995

1995 Triangle Venture Capital Investment Up 57% from 1994
Triangle Companies Pull in 63% of Total Investment in NC

The Council for Entrepreneurial Development (CED) released details of its 1995 Research Triangle Venture Capital Survey at Venture ‘96, the 13th annual venture capital conference help in North Carolina’s Research Triangle.

Emerging high-growth companies in the Research Triangle area raised $71,642,000 of the $112,000,000 invested in emerging North Carolina growth companies in 1995. This represents a big jump from the 1994 Triangle goal of approximately $45 million. In fact, 1995’s investment total was the second-largest in the history of the CED survey which has been conducted for the past eight years. (The highest amount, $87 million, was raised in 1992, when two companies contributed a total of $44 million to that final number.) Totals ranged in the low and mid $30 million bracket throughout the late 1980’s and into 1991.

The survey measures the amount of venture capital reported as invested by Triangle investors and entrepreneurs and is performed in conjunction with a statewide venture investing survey conducted by Coopers & Lybrand. The CED survey does not include LBO, MBO, or acquisition transactions and focuses on equity venture investments.

"The CED survey represents trends in investment in our region," notes Monica Doss, CED Executive Director. "While we do our best to include each deal done in the region, we know that there are several investments which are not reported due to the desire for confidentiality. We combine a process of direct surveying of companies and investors and indirect surveying of intermediaries and service professionals to get a clear picture of what deals are being done and by whom."

Some key factors uncovered by this year’s survey:

  • Companies in technology industries attracted all but five percent of the investment money in 1995. Biotechnology companies were the big winners, walking away with 39 percent ($28.1 million) of the dollar total. Electronics companies followed with 18 percent ($13 million). Software and healthcare tied at 16 percent ($11,550,000). Telecommunications companies came in with six percent ($4.5 million). All told, only $3,344,000 went into other industries.

  • More software deals were done than any other industry (28%), followed by biotechnology (24%), electronics (19%), healthcare (19%), and telecommunications (5%). Other industries combined to do the remaining 10% of the deals done in the Research Triangle.

  • Reflecting the strength of early technology in the Research Triangle, 76% of the dollars invested and 86% of the number of deals were done by early stage companies.

  • Six of the twenty-one companies that were funded received 71% of the funds invested ($50.7 million). Reflecting the diversity of the technologies prospering in the Research Triangle, these include two biotechnology deals ($21.1 million total), one electronics deal ($11 million), one healthcare company ($8.6 million), one software deal ($5.5 million), and one telecommunications deal ($4.5 million).

  • The average financing was $3.4 million. The median deal was $2.07 million.

  • 87% of the funding came from funds headquartered outside of North Carolina, often in syndication with North Carolina funds and/or wealthy individuals.

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For more details about the 1995 CED Venture Capital Survey, contact CED at 919.549.7500.