Venture capital investment in
"The bottom line is that there are simply more companies that have needs for money than there is venture money out there," said
Last year, venture capitalists invested in 83 deals in
But venture capital investment in the state in each of the past two years was more than
Facing growing demand for dwindling capital, investors are now more likely to focus their resources on well-established, high-growth companies rather than start-ups or those in need of early-stage capital, Ivers said.
"As the venture world has imploded, only the strongest companies are going to get the funding," he said. "We're looking for home runs; companies that can expand very quickly."
In Dayton, at least two dozen companies that received venture funding through the coalition's
"We're working with our portfolio companies to help them obtain financing," he said. "But, again, it's a competitive world. Any company has always had to prove what value they've been able to produce in order to get funding."
The difference today is that traditional bank financing has become harder to obtain at the same time venture investors have tightened their purse strings, said
"What we've seen since the great recession is that the banking industry has tightened its credit standards, and we consistently hear that access to operating capital is a challenge for companies," Budd said. "There is definitely a need in the region for those kinds of dollars, but these funds are not easy to establish.
"We can do two or three deals a year, but that's not going to fulfill the whole need," he said. "In a perfect world, we'd have have half a dozen funds in the region that could make some kind of equity like capital investment of funds that normally you couldn't get from a traditional bank."
The development coalition is working on raising money for a new venture fund known as Accelerant Fund I that would provide money for seed-stage investments in the
"We're hoping to close on our Accelerant Fund I sometime at the end of next month," Ivers said. "We're hoping that we will have a
About 70 percent of the fund will come from local investors, and the coalition has applied for matching funds from Ohio Third Frontier, part of
"We'll hear about the matching funds sometime in June," Ivers said. "That's not guaranteed at this point...but there could be a new infusion of money that there hasn't been for start-ups here."
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