Editor’s note: Investor and entrepreneur David Gardner is founder of Cofounders Capital in Cary and is a regular contributor to WRAL TechWire.
CARY – The numbers for 2020 are in and it is now safe to say that it could have been a lot worse and 2021 is off to a good start at least in the venture world. Silicon Valley Bank’s Q1 2021 State of the Markets Report sheds light on the resilience of the innovation ecosystem in the face of a difficult year.
Sources cited in a WRALtechwire article last month, What a year for NC startups point out that although California still dominates tech investing, its percentage of the venture money raised dropped to less than 20% of the US pie in 2020. That decrease is flowing to fast-growing newer innovation hubs like Austin, Nashville and the Triangle.
Noted NC economist, Ted Abernathy, reported last month to the Charlotte Business Journal that while the rest of the country is still predominantly struggling, the tech sector is once again surging in North Carolina.
Cruchbase reports that micro tech acquisitions (those less than $100M) have basically returned to pre-pandemic levels.
When the number of down rounds across the US rose to 13.6% in the second quarter of 2020, many felt that venture company valuations would be depressed for some time to come but such has not been the case. Pitchbook’s US VC Valuations Report examines the return of founder-friendly terms and normal valuation multiples.
But before we get all celebratory over NC dodging some bullets in 2020 we should all pause for a moment of silence for the 365 startups that did not make it through the year. Each one represented someone’s hopes and dreams and probably a good chunk of their life savings.
Nonetheless, even after counting its losses, according to a recent Burgisse Report, the early stage venture capital (seed round) tech sector outperformed the S&P by 34.7% as well as all other market sectors with a 53.6% showing.
