In advance of CED's "State of Venture Capital" program this afternoon at UNC-Chapel Hill, the Raleigh News & Observer has published a Q&A with NVCA President Mark Heesen.
Here are excerpts from N&O reporter Frank Norton's conversation with Heesen:
Q. What is the prominent trend in venture capital right now?
A. We're seeing pretty stable investing, not huge amounts of money thrown in but not major retractions either. We just had another quarter with $4.8 billion to $6.2 billion in venture backing. That's 17 quarters in a row in that zone. So there is continued interest, but not huge amounts of money as during the bubble days. We're quite happy with that.
Q. What lags in the Triangle?
A. Nationally, there is intense interest in clean technology, but we're not seeing the hard dollars bear out in the Triangle. Clean tech is basically any new energy such as wind or solar power, or better ways to extract resources. It's anything that changes the dynamic of us being so beholden to oils and gas.
Q. Is that where the next big funding wave is?
A. It certainly has the potential. This may sound mighty, but the reality is we look to industries that can literally change the way we do things. And the huge energy conglomerates are finally coming to the realization that if they want to continue as powerful conglomerates, they have to invest in alternative energy. This is an area where we will see dramatic change in the not-too-distant future, and we want to be part of that.
Q. How much does venture capital affect the economy?
A. It isn't that much money, and we'll be the first to say that. But companies such as FedEx, Home Depot, Staples, Outback Steakhouse and JetBlue were all founded on venture capital, not to mention the Intels, the Ciscos and the Genetechs of the world. And there would be no biotech industry today without venture capital. So although we only contribute about 0.2 percent of all financing dollars, the payback is extraordinary.
Q. What advantages for venture capitalists does the Triangle offer?
A. It has very good infrastructure in terms of the ability to create and grow companies. In many parts of the country, you can create a company but you can't grow it there because there aren't enough middle managers, attorneys and accountants to take it to the next level. If you remember, RTP 25 years ago was pretty much just a vision. It's amazing how it has transformed over that time.
Q. How can we stand out more?
A. One or two superstars -- a company that makes it, goes public, stays in the region and creates excitement and becomes a community leader. That would help.
Q. So we're waiting for our Dell?
A. Right. Austin would not be Austin without Dell. RTP won't fall if it doesn't spawn that but it certainly would help at the end of the day.