2013 MA Innovation Economy Survey Results
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The 2013 innovation economy survey gathered insights from nearly 300 participants about the funding landscape for early-stage technology companies in Massachusetts, highlighting remaining capital gaps mainly between $0-$3 million. Funding challenges persist for first-time entrepreneurs and underserved markets, though many respondents feel the state's innovation economy is performing better than average. Concerns over an exodus of entrepreneurs are noted, with California and New York being primary destinations, although 54% believe the issue is overstated.
2013 MA Innovation Economy Survey Results
- 1. 2013 INNOVATION ECONOMY SURVEY
- 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. 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. MassVentures con7nues to bring addi7onal capital, credibility and resources to its entrepreneurs 70 percent 60 50 40 30 20 10 0 196 respondents
- 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. 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. 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. 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. ..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. 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. 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. 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. Where is it easiest to raise money? 6% 7% 2% California 10% New York MA 75% Other Texas
- 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. 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. Funding for Healthcare IT con7nues to thrive, Mobile has improved but Consumer is s7ll lacking 25% 20% 15% 10% 5% 0% Improving Lacking
- 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. 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.