Florida start-up companies received $25 million in venture capital during the first quarter of the year, a slight increase from the fourth quarter of 2002 but only a fraction of what they garnered ayear ago, according to a national survey released Monday.
Ten companies statewide received financial backing in the quarter ended March 31, the same number as in the fourth quarter, when the state pulled in only $20.8 million, the worst quarterly capital injection since 1995.
During the first quarter last year, Florida raised $117.6 million as 17 companies found venture money.
The bad news is that two Florida companies hogged most of the venture cash. ScriptLogic Corp. of Pompano Beach and Authentec of Melbourne got $8 million and $12.1 million, respectively.
Florida-based venture capital firms weren’t much help, contributing only $1.6 million of the state’s total, with $960,000 coming from West Palm Beach-based CrossBow Ventures.
Across the United States, start-ups managed $3.8 billion in the January-through-March period, compared with $4.2 billion in the fourth quarter of 2002 and $4.5 billion in the year-ago quarter. The results are part of the MoneyTree Survey, taken quarterly throughout the country by auditor PricewaterhouseCoopers, research firm Venture Economics of Newark, N.J., and the National Venture Capital Association in Washington.
Among venture money totals for the states, Florida fell eight spots to 21st, from 13th for all of 2002. Meanwhile, Central Florida outdid South Florida in venture capital dollars in the first quarter, $16 million to $9 million.
“It’s never been this low,” said Marty Donsky, Florida marketing director for PricewaterhouseCoopers. “The venture industry in Florida is comatose. That’s the only conclusion you can draw.”
Some venture firms have folded, and the ones that haven’t are focused on keeping the start-ups in their portfolios afloat. For instance, CrossBow anted up $710,000 in additional financing for West Palm Beach-based ScriptRx, a company that installs computer systems in hospital emergency rooms. ScriptRx had gotten $2.1 million from CrossBow in 2001.
If there is good news, it’s that five Palm Beach and Martin county companies received at least some money – CyLex Systems, Boca Raton, $125,000; Universal Chemical Technologies, Stuart, $250,000; and ScriptRx, Cross Match Technologies in Palm Beach Gardens and 422 Inc. of Palm Beach received financing but did not disclose the amount.
“We have 27 active companies that we are focused on and we have to get them cash-flow positive. But we have a couple of deals in Florida where we are doing due diligence and we’ll complete a couple of more deals this year,” said CrossBow partner Ravi Ugale.
“There are companies in Florida that are investable and VCs are looking in Florida,” Ugale said. “But a lot of VCs are getting back to their focus whether it’s geographic or industry-based.”
Venture capital financing
Although emerging firms here received slightly more venture capital money during the first quarter, Florida lags well behind in overall financing.
Top venture capital states during first quarter
Ranking & state Amount
1. California $1.5 billion
2. Mass. $619 million
3. Texas $217 million
4. Colorado $152 million
5. Virginia $133 million
21. Florida $25 million
Source: MoneyTree Survey
