Friday, November 8, 2013

RI VentureTracker™ --- What Happened? Venture Investments in RI Companies Plummet in Q3 2013


Venture capital investments in New England companies jumped to $870 million invested in 109 companies in the third quarter of 2013, according to the Money Tree Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.
But only one of those companies is in Rhode Island, netting a total of $499,000.  The third quarter dollar amount represents a 98.5% decrease over investments in Rhode Island companies in the second quarter, when $33,308,000 was invested in 6 deals.
What happened?  A total of $53,508,000 had been invested in 9 Rhode Island companies in the first half of 2013.  This is the lowest investment level in Rhode Island companies since 2007, when only $5 million was invested in the entire year! Is it just a random occurrence?  Or is it a sign that, despite all the hype, Rhode Island government and institutions still are not really invested in creating an environment in which start-up companies can flourish similar to those in Massachusetts and California?
At the same time, investment levels across the U.S. climbed.  Nationally, venture capitalists invested $7.8 billion in 1005 deals in the third quarter.  This represents an increase of 12% in dollars and a 5% increase in deals compared to the second quarter of 2013, when $7.0 billion was invested in 956 deals.  The Software, Biotechnology and Medical Device sectors received the most investment dollars for the quarter.  Investment in Internet companies also held steady, with $1.5 billion being invested in 252 deals.
Locally, the only company to receive an investment in the third quarter of 2013 is:
·                     Neurotech USA, of Cumberland, received a follow-on investment of $499,000 from Versant Ventures Inc., after receiving a $7,000,000 investment in the second quarter.  Neurotech is developing sight saving therapies for chronic retinal disease.
 

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