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Startup & Early Stage Financing Trends: National and Vermont Analysis

Explore the latest trends in startup and early stage financing, including national VC trends and the rise of alternative funding methods. Learn about the positive VC trends in Vermont and the increase in VSBOE offerings. Discover how exits from entrepreneurial companies fuel private investment and the growing role of alternative finance.

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Startup & Early Stage Financing Trends: National and Vermont Analysis

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  1. Startup & Early Stage Financing Trends www.freshtrackscap.com @FreshTracksCap & @VT CairnCross @roadpitch cairn@freshtrackscap.com & www.linkedin.com/in/cairncross

  2. Agenda • National Trends • Vermont Trends

  3. National VC trends 2015 • Fundraising into venture firms is slowing in ‘15 compared to ’14. $22BN so far this year. • Continued concentration in hands of a few big firms (In Q2, 3 firms accounted for 45% of the money raised by the industry)

  4. Number of National VC Deals Annually

  5. What about the Angels? Q2 ACA Halo Report • Aggregate dollars for angels equal those for venture • Rule of thumb angels invest in 20X as many companies as venture firms. • Round size of “angel only” deals steadily increasing. • Angel money evenly distributed east/west and north/south

  6. Alternative Funding • Kickstarter (Rewards Crowdfunding) • In 2014 raised $529MM from 3.3MM people • Circle Up (Equity Crowdfunding) • $145MM raised by 126 companies in 19 states since 2011 • 1 Vermont company raised $600K

  7. National Trend Summary • Number of venture investments declined since 2000 • Dollars of VC firm fundraising declined since 2000 • Venture Dollars concentrated with a few large firms • Number of Angel investing deals ~20X venture deals • Dollars Angels deploy roughly equal to Dollars from venture • Angel investing more spread across the country than venture • Alternative financing methods increasing rapidly • SEC rules for crowdfunding final which should lead to further alternative financing increases

  8. Agenda • National Trends • Vermont Trends • Questions

  9. What About Vermont?

  10. Positive VT VC Trends - no blip in 2000-2001

  11. 2014 VT VC Funding vs. Region – No. of Deals * State Science & Technology Institute - http://www.ssti.org

  12. 2014 VT VC Funding vs. Region - $s Invested • $39MM in VT Venture Investment In 2014. ($22MM was Northern Power Systems Deal.) • $9.7MM in VT Venture Investment through Q3 2015 • Several more deals expected in Q4 pipeline * State Science & Technology Institute - http://www.ssti.org

  13. Other non venture VT Private Investments (Angel Deals) so far in 2015 2015 (through Oct) Vermont “non-venture” deals not included on previous venture slide: • 27 companies > $16.4MM total • From small deal at $25K, to • IPCreate raising $6.1MM • Of note: • 10 Tech • 5 Food &Beverage • 2 Skin Care • Several more deals in process before end of year

  14. VSBOE 2015 (VT Small Business Offering Exemption) • Modernization of law during past 2 legislative sessions. • 7 VSBOE offering registrations in 2015 so far • Offerings good for a year so no final filings available yet • Total VSBOE filings average 1 per year before recent rule change.

  15. “Exits” from Entrepreneurial Companies Help Fuel Private Investment • Three notable local private investment “syndicates” from founders, execs & managers: IDX, GMCR & Dealer • And, North Country Angels Group revitalized and more active in the local market

  16. VT Alternative Investors/Lenders • VT Seed Capital Fund (VCET) – 6 cos. so far in 2015 • 5 “Follow on” @ $546K, 1 “new” $100K • The 6 companies round sizes totaled ~$11MM • Flexible Capital Fund (VT Sustainable Jobs Fund) – 4 cos. so far in 2015 • 1 “Follow On” @ $150K, 3 new @ $685K • The 4 companies round sizes totaled ~$1.3MM

  17. The Best Funded VT Kickstarter Campaign Ever Wintersmiths based in Shelburne 1,961 backers pledged $241K

  18. Increase in “feeder events” for the ecosystem

  19. Vermont Trends Summary • Steady 15 year rise in No. of venture deals done annually • Top 10 nationally deals per capita • Dollars per VT deal smaller than national average • No. of VT angel deals lower than national average • Dollars per VT angel deal equal to or higher than nat’l avg. • Alternative finance playing an increasingly important role • VSBOE offerings up dramatically in 2015 due to regulatory overhaul but no final filings yet.

  20. www.freshtrackscap.com @FreshTracksCap & @VT CairnCross @roadpitch cairn@freshtrackscap.com & www.linkedin.com/in/cairncross

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