Could coronavirus bring a booming decade of venture capital investment to a halt?
The top executive at the National Venture Capital Association is taking an optimistic approach to the question, even while acknowledging that no one yet knows how Covid-19 will impact young companies and their investors.
“As we turn the page on a new decade, uncertainty looms around the public and economic health of the country, including how COVID-19 will impact the startup ecosystem,” Bobby Franklin, president and CEO of the NVCA, said in a news release. “History shows us the resilience of the industry through market downturns, when some of the most successful startups were founded.”
The NVCA has just released its 2020 Yearbook, created with data provided by Pitchbook. It takes a wide ranging look at activities related to venture capital over the past decade, including insights on venture investing in Florida.
One noted local deal — Thoma Bravo’s purchase of ConnectWise in February 2019 — is highlighted in the report. While terms of the ConnectWise deal were never officially disclosed, the yearbook pegged the deal at $1.5 billion, and said it was the fifth largest venture capital-based deal in 2019.
There were 269 deals closed for 255 Florida companies in 2019, with $2.9 billion in capital invested. That was up from $1.7 billion invested in 212 companies in 2018.
Only five other states had a larger total capital investment in 2019, according to the NVCA: California ($65.6 billion), New York ($20.9 billion), Massachusetts ($10.8 billion), Washington ($3.9 billion) and Texas ($3.7 billion).
Florida pulled ahead of other tech hot spots including Pennsylvania, with $2.6 billion in total capital investment in 2019, and Colorado ($2.5 billion). Florida deals made up 2.4 percent of the total deals nationwide, and the capital invested in Florida was 2.2 percent of the national total.
Venture capital funds in Florida raised $35 million in 2019, the lowest amount raised since 2013, and assets under management at Florida firms took a plunge last year, after a pretty steady rise.
On a national level, more than 10,400 firms received venture funding in 2019, and U.S. venture-backed startups represented approximately 2.27 million employees.
“The venture ecosystem has seen incredible growth over the last decade, which has enabled U.S. entrepreneurs to build the next big thing across industries that have transformed the way we live and work, and made life changing healthcare technologies a reality,” Franklin said.
In a time of challenges, startups are poised to offer solutions, he said.
“Venture investors with ample dry powder are well positioned to fund promising startups; however, it remains a critical time for U.S. public policy to encourage new company formation and factor in the needs of high-growth startups,” Franklin said.
See the full NVCA Yearbook here.