The number of venture capital deals in Kansas was more than halved but the dollar value ballooned in the third quarter of 2012, according to a new report by PricewaterhouseCoopers and the National Venture Capital Association.
The MoneyTree Report said there were four venture capital deals totaling $24.6 million in the three-month period that ended Sept. 30. That compares with nine deals totaling $1.6 million in the third quarter of 2011, the report said.
Trish Brasted, CEO of Wichita Technology Corp., and a member of the Midwest Venture Alliance, a regional angel investors group, said though the number of deals was down in the period, the value of the deals year-over-year reflects a venture capital environment that’s slowly improving in Kansas. She said she expects the fourth quarter of 2012 to be strong.
“Going into end of year, things look pretty good from a transaction standpoint – dollar wise and number of transactions,” she said.
Brasted said the higher dollar amount in the third quarter likely reflects startup companies that have reached certain milestones in their business plans and are nearing the point where they will begin earning revenue. Once startups begin reaching milestones in the venture capital funding cycle and get closer to bringing their product or service to market, it’s usually easier for them to obtain additional funding and in larger amounts, she said.
But Kansas has a ways to go to top 2011 deals and dollars. According to the report, there were 30 deals totaling $33.7 million in the first nine months of 2011. That compares with seven deals totaling $26.8 million in the same period this year.
The report said the four Kansas companies receiving venture capital in the third quarter were: Pollen Inc., a Mission Woods software company, which received $9.1 million; Yantra Services, a Topeka information technology services firm that received $8 million; LockPath Inc., an Overland Park-based software company that received $6 million; and NanoScale Corp. in Manhattan, which received $1.53 million.
Nationally, the number and value of deals were down in the third quarter: 890 deals totaling $6.5 billion in 2012 compared with 992 deals totaling $7.3 billion in 2011, the report said. Deals and dollars for the first nine months of the year nationally were also down by 293 and $2.1 billion, respectively, compared with the same period a year ago.