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2013 MA Innovation Economy Survey Results


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MassVentures has conducted research with the goal to gain a broad perspective on the state of the funding market for early stage technology companies in Massachusetts – what’s working well, what are the gaps, and how has it changed since we last conducted this research in 2011.

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2013 MA Innovation Economy Survey Results

  2. 2. Situa7on  Summary   •  Nearly  300  entrepreneurs,  venture  capitalists,  service  providers,  angel  investors   and  other  members  of  the  innova7on  economy  par7cipated  in  the  survey  in  May   of  2013   –  Goal  was  to  gain  a  broad  perspec7ve  on  the  state  of  the  funding  market  for   early  stage  technology  companies  in  MA  –  what’s  working  well,  what  are  the   gaps,  and  how  has  it  changed  since  2011?   •  The  following  slides  and  charts  summarize  the  results  and  highlight  key  themes   and  opinions  
  3. 3. Survey  respondents  by  profession  (298)   Experienced  entrepreneur   (95)   7%   Service  provider  (31)   12%   46%   8%   12%   15%   Aspiring  entrepreneur  (26)   Venture  capitalist  (16)   Angel  investor  (15)   Other  (26)   Other  =  trade,  government,  universi7es  
  4. 4. MassVentures  con7nues  to  bring  addi7onal  capital,   credibility  and  resources  to  its  entrepreneurs   70   percent   60   50   40   30   20   10   0   196  respondents  
  5. 5. 70   The  Gap  Remains  Primarily  $1-­‐$3M…     But  the  Series  A  Round  is  Becoming  More   Challenging   60   50   40   %   2011   30   2013   20   10   0   $0-­‐$500K   $500k-­‐$1M   $1M  -­‐  $3M   $3M  to  $5M   $5M  to  $10M   Respondents  could  select  more  than  one  category  
  6. 6. Other  gaps  do  exist  for  early  stage  companies   80   Percent   2011   2013   40   0   Yes  -­‐  Funding  for   1st  7me   entrepreneurs   Yes  -­‐  Funding  for   underserved   industries   Yes  -­‐  Funding  for   underserved  MA   regions   Other   No  
  7. 7. Most  agree  that  the  State  should  play  a  role  in   iden7fying  in-­‐state  opps,  developing  a  talent  pool   and  par7cipa7ng  in  VC  financings   100%   80%   Not   Appropriate   60%   Appropriate   40%   Very   Appropriate   20%   0%   Inden7fying   Help  source   VC  financings   Underserved   Underserved   Angel   in-­‐state   or  develop  a   industries   regions   financings   revenue  opps   talent  pool   University   spin-­‐outs  
  8. 8. 67%  raised  follow-­‐on  funding     in  <12  months   7%   24%   3-­‐6  months   27%   6-­‐12  months   12-­‐24  months   2+  years   43%   151  responses    
  9. 9. ..and  most  found  the  process  efficient   although  many  are  s7ll  looking  for  a  beher   understanding  and  a  consistent  process  for   naviga7ng  it.     •  •  •  •  •  •  •  A  beher  understanding  of  the  universe  of  MA  angels/VCs,  their  market  or  stage  focus  and   capacity  to  invest     More  opportuni7es  to  bring  investors  and  emerging  companies  together,  more  frequent  venture   fairs,  Seed  capital  for  early  stage  companies  from  angel  groups  is  a  inherently  inefficient  due  to   the  consensus  nature  of  the  decision  making  process.     Standardized  terms.  For  most,  dealing  with  terms  is  not  their  forte.     Access  to  Angel  investors,  and  the  process  to  get  in  their  agenda.     There  is  no  one  consistent  vehicle  that  can  allow  investors  to  get  in  front  of  the  investors,  every   investor  has  their  "own"  criteria  and  not  adver7sed  or  shared.     A  single  point  contact  within  the  State  that  could  direct  companies  to  funding  sources  would  help.   When  do  we  go  to  Mass  Ventures,  Mass  Life  Science  Center,  MA  Angels,  etc?     Angel  Groups  are  too  slow.  VC's  do  their  own  thing...and  most  companies  are  not  VC  appropriate.    
  10. 10. On  a  scale  from  1-­‐4,  4  being  very  well,  people  ranked  how   well  the  Innova7on  Economy  is  doing  in  MA  as  a  2.8  and   success  should  be  measured  by  the  following..   35.0   30.0   Percent   25.0   20.0   15.0   10.0   5.0   0.0   #  of  MA  jobs   #  of  co.'s   Investment   Major  tech   Visiility  on   #  of   #  of  IPOs   created   started  in   returns   co.'s   the  na7onal  acquisi7ons   MA   hdqrtrd  in   level   MA  
  11. 11. Is  it  true  that  entrepreneurs  are  leaving  MA  for   more  welcoming  environments?     35.0   30.0   Percent   25.0   20.0   15.0   10.0   5.0   0.0   No,  not  at  all   A  small  amount   At  an  expected   Yes,  more  than   but  blown  out  of   level   should  be     propor7on   Yes,  they're   leaving  in   droves!  
  12. 12. 46%  of  respondents  think  entrepreneurs  are   leaving  the  state  more  than  they  should  be.  Why?   100%   90%   80%   70%   60%   50%   40%   30%   20%   10%   0%   Most  likely  reason   Possible  reasons   Not  likely  
  13. 13. Where  is  it  easiest  to  raise  money?   6%   7%   2%   California   10%   New  York   MA   75%   Other   Texas  
  14. 14. Most  found  their  mentorship  to  be  very  helpful  with   the  most  effec7ve  mentorship  coming  from  their  own   networks  and  colleagues   percent   30.0   25.0   20.0   15.0   10.0   5.0   0.0   Poor   Not  very   helpful   Helpful   Very  helpful   Extremely   helpful  
  15. 15. How  do  you  see  the  investment  climate     changing  in  the  State?   45.0   40.0   Percent   35.0   30.0   25.0   20.0   15.0   10.0   5.0   0.0   Gesng  worse   Same  but   Roughly  the   shiting  priori7es   same   Beher   Much  beher  
  16. 16. Funding  for  Healthcare  IT  con7nues  to  thrive,   Mobile  has  improved  but  Consumer  is  s7ll  lacking   25%   20%   15%   10%   5%   0%   Improving   Lacking  
  17. 17. Compared  to  2  years  ago,  less  jobs  are  going   overseas  but  more  are  leaving  MA  for  other  states   30.0   Percent     25.0   20.0   15.0   10.0   5.0   0.0   More  jobs   Less  jobs   going   overseas  -­‐   overseas   more   staying   No  shit   More  jobs   Less  jobs   leaving  MA   leaving  MA   for  other   for  other   states   states   No  shit   Dispersed  equally  between   China  and  India  and  a  smaller  %   to  Eastern  Europe  
  18. 18. Summary   •  MassVentures  is  s7ll  servicing  the  capital  gap  of   $0-­‐$3M   •  Funding  for  1st  7me  entrepreneurs  and   underserved  markets  is  s7ll  a  challenge   •  Most  believe  the  State’s  innova7on  economy  is   doing  beher  than  average     •  54%  of  respondents  believe  the  exodus  of   entrepreneurs  is  overstated.    For  those  that  are   leaving,  they  are  primarily  headed  to  California   and  New  York  for  access  to  capital.