CED's Mid-Year Update to its Innovators Report Shows NC Startups Attracting Investment From Across the Globe with Several High-Profile Investment Deals, IPOs and Acquisitions Signaling Strength of Entrepreneurial Sector

DURHAM, N.C., Sept. 16, 2014 /PRNewswire-USNewswire/ -- The Council for Entrepreneurial Development (CED), the largest and oldest entrepreneurial support organization in the country, today released a mid-year update to its annual Innovators Report.

It showed that in the first half of 2014, North Carolina startups in the technology, life science, advanced manufacturing and cleantech sectors drew more global investment from a variety of sources. Significant investment in technology companies and a number of IPOs and acquisitions involving life sciences companies highlighted the continued strength of the state's entrepreneurial economy.  

"North Carolina companies continue to attract global investments from a multitude of sources," said Joan Siefert Rose, president of CED. "In just the first six months of this year, we've seen some high-dollar investment deals, significant IPOs and big acquisitions. In all this activity we've seen different areas of strength in different sectors. Tech experienced a big increase in funding while life science companies had a number of exit events. These trends have been cyclical and tell us that North Carolina's entrepreneurial economy isn't dependent on one industry."

Today's update details investments in North Carolina entrepreneurial companies during the first six months of 2014. The last full-year report covering all of 2013 was released in June.

According to the mid-year update, in the first six months of this year, 127 North Carolina companies in the technology, life science, advanced manufacturing and cleantech sectors collectively raised more than $266 million through equity investments, grants and awards. Of the 127 companies that received funding, 75 companies raised equity funding through 78 equity deals.

A group of 48 unique institutional funders invested in North Carolina companies in the first half of the year, with 17 coming from North Carolina, 10 from the Northeast, 8 from the mid-Atlantic, 8 from California, and 3 from the Midwest. Two funders were from Europe – one from Belgium and one from Germany.

Undisclosed investors have continued to step up their involvement in the state's entrepreneurial companies. These investors, which can include angels, high net-worth individuals, family offices, and many other accredited investors, participated in 66 percent of the total equity deals. 

"The interest in our companies from non-traditional investors is important to note if you're an entrepreneur looking for funding," said Jay Bigelow, CED's director of entrepreneurship. "Entrepreneurs need to be aware of an increasing probability that any interaction has the potential to lead to funding, and they must be prepared and properly organized in order to take advantage."

Marianne Hudson, executive director of the Angel Capital Association, the North American trade association of accredited investors that invest in high-growth early-stage ventures, confirmed that North Carolina is experiencing an increase in angel and other accredited individuals investing in startups and growth-stage companies, which is part of a national trend.

"American angels increased their total dollar investments in 2013 by an estimated eight percent over 2012," said Hudson. "The combination of an improving economy, supportive programs leading to more high quality entrepreneurs to invest in, more public recognition of angel investing, and sharing of education and good practices has helped angel investment grow. As more accredited individuals learn about the benefits of angel investing, they join the asset class."

The first two quarters of 2014 also saw a number of investment deals of significant magnitude. Five North Carolina companies attracted more than $10 million each in funding – with Cary-based Dude Solutions topping the list by attracting $100 million in investment.

There were also a number of significant exit events in the first half of 2014, including four IPOs for: Square 1 Financial, Inc. (SQBK), SCYNEXIS, Inc. (SCYX), NephroGenex, Inc. (NRX) and Argos Therapeutics Inc. (ARGS).

Among the noteworthy mergers and acquisition transactions:

• Furiex Pharmaceuticals was acquired by Forest Laboratories for $1.5 billion;
• Aerial BioPharma was acquired by Irish-based Jazz Pharmaceuticals for up to $400 million;
• Digitalsmiths was acquired by TiVO for $135 million;
• Chelsea Therapeutics was acquired by Lundbeck for over $650 million; and,
• Strikeiron was acquired by Informatica.

Among the report's other key findings:

• Investments in technology companies outpaced life science companies, both in total numbers of deals and in dollar amount. For every $1 raised by life science companies, technology companies raised nearly $6;
• The emerging sectors of advanced manufacturing and cleantech continued to draw investor attention with over $27 million raised; and,
• The first half of 2014 continued strong momentum from 2013 with 4 IPOs and over 10 M&A events.

About CED:
CED is the network that helps Triangle entrepreneurs build successful companies.

CED Innovators Report:
www.cednc.org/innovatorsreport

CED Website:
http://www.cednc.org

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SOURCE Council for Entrepreneurial Development