CED released its 2005 Venture Report today.
The good news: North Carolina received its all-time highest national ranking (#8) in total venture capital investments in 2005, with a 40% year-over-year increase in total venture dollars.
The bad news: North Carolina’s seed stage investments dropped over 60% compared to 2004 levels.
While North Carolina is back on track in terms of total funding, the lack of seed financing continues to be of overwhelming concern. 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. 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.
What else should North Carolina be doing to close this seed funding gap?