Kansas venture investment dollars, deals lackluster in second quarter, report says

07/22/2014 7:11 AM

07/22/2014 7:12 AM

A national report on second quarter 2014 venture capital investment activity said it was up sharply in the U.S., but down in Kansas compared with a year ago.

The MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association said there were two deals in Kansas, one of them totaling $1.3 million, in the period ending June 30. That compares with three deals totaling $4.67 million in the same quarter last year.

An NVCA spokeswoman said in an e-mail to The Eagle that the investment amount of one of the two Kansas deals in the second quarter of 2014 was not reported. Thomson Reuters provides the national and state-level data for the report.

Even with a lackluster quarter, the number of deals and dollars invested in Kansas were higher in the first half of 2014 than in the first half of 2013, according to the report. There were five deals totaling $16.34 million in the first six months of 2014, compared with four deals totaling $7.79 million in the same period last year, the report said.

Trish Brasted, managing member of Midwest Venture Alliance, a network of angel investors in early stage companies, said she thinks deal activity in Kansas “is a little better” than what the MoneyTree second-quarter figures show.

“I think those of us in that world are seeing some deals that are getting done,” said Brasted, who also is CEO of Wichita Technology Corp., a public-private organization that provides assistance to start-up technology and bioscience firms.

Todd Gentry said he just finished a round of early stage financing for his Winfield-based startup, HyperBorean, which aims to use waste heat to power refrigeration and air-conditioning units. He said he didn’t find the process that difficult – though “it was all people I knew.”

He said he expects to start a second round of financing from angel investors in the fall, seeking to raise $900,000.

“I kind of get the impression there’s a lot of money on the sidelines,” he said. “That’s just what I hear. I think there’s just a light hint of caution out there.”

While deal activity and amounts slowed in Kansas in the second quarter of 2014, it was on the rise nationally. The MoneyTree Report said there were 1,114 deals totaling $13 billion in the U.S. in the second quarter of 2014. Those figures represented a 12 percent increase in deals and an 82 percent increase in dollars invested compared with the same quarter last year, according to the report.

“ … it’s important to keep in mind that a lot of this activity was driven by a handful of eye-popping investment rounds, including a record-setting funding round of $1.2 billion,” Bobby Franklin, NVCA’s president and CEO, said in a news release. “Additionally, we hear anecdotally from members about the emergence of new investors in the innovation economy, including the rise of hedge funds, mutual funds and other non-traditional investors making direct investments into presumably pre-IPO companies.”

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