Wednesday, January 25, 2012

Entrepreneurship Creates Jobs, Capital and Economic Stability in North Carolina

DURHAM, NC, January 25, 2012--CED, the Southeast’s largest entrepreneurial support organization, today released a 20-year retrospective report, “Starting Something: The State of the Entrepreneurial Economy of North Carolina, 1992-2011.” The report aggregates data from 1,823 high-growth companies founded in North Carolina since 1992 and shows these companies created 40,560 jobs.  Of these firms, 397 have attracted $7.7 billion in private capital, raised from more than 600 funds, since 1997.

The report is the first to provide a comprehensive look at the role these privately held companies contribute to the overall economy.  The study shows that the North Carolina entrepreneurial sector creates jobs that stay in the state.  The sector attracts large amounts of diversified capital investment and exhibits unusually stable growth patterns, even during major economic swings.

“North Carolina has a surprisingly stable and vibrant entrepreneurial sector,” said Joan Siefert Rose, CED president.  “While many people are familiar with North Carolina’s established technology-based entrepreneurial companies, such as SAS, Quintiles, and Cree, our report focused on a set of companies that formed in the past 20 years.  Their names may not be as well known, but they are growing quickly and creating significant opportunities for our citizens,” Rose said.

Among the findings presented at CED’s annual meeting, held at the Research Triangle Foundation:
  • Investors represent an increasingly wide geographic range.  The most active venture capital funds investing in North Carolina companies are located in the Southeast.  In addition, international funds, and funds located in Boston, New York, and California, have made significant investments in North Carolina firms in the past 15 years.
  • More than 200 separate corporations have acquired North Carolina entrepreneurial companies since 1992, many with the goal of establishing a regional research & development center in the state.  These acquisitions often bring additional investment and jobs to North Carolina, especially in the Research Triangle.
  • Entrepreneurs in North Carolina are closely connected to the large technology and life science companies.  Many work for a large firm prior to launching a startup, then return following an acquisition or prior to launching a new venture.  This arrangement both attracts and retains valuable high-tech talent in the state.
As part of an ongoing collaboration between Maryann Feldman, Heninger Distinguished Professor in the Department of Public Policy, and Nichola Lowe, associate professor in the Department of City & Regional Planning, UNC-Chapel Hill researchers compiled the initial database of companies to study entrepreneurship in the Research Triangle.  CED and First Flight Venture Center contributed additional company names and histories.

“We have gained knowledge through partnering with these institutions,” Lowe said.  “Our goal is to make this information widely available for anyone interested in learning more about how companies start and grow, and to encourage discussion on public policy,” she added.  UNC-CH will continue to host the combined database with support from the Renaissance Computing Institute (RENCI) and the Odum Institute for Research in Social Science at UNC-CH.

Sources include the National Venture Capital Association, PricewaterhouseCoopers, the National Establishment Time Series (NETS) database, LinkedIn, news reports, tenant rosters of First Flight Venture Center, and CED’s membership database, including graduates of the FastTrac TechVenture program and presenting companies at the Life Science and TechVenture conferences.