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Venture Capitalists Discuss Investments and Trends in Florida

The Tech Executive Roundtable (TER) hosted a panel discussion on technology, the state of venture capital in Florida, and the state of venture capital in general, last week. The private event took place inside downtown Orlando coworking space Canvs. TER brings executives and community members together to discuss prominent issues and business topics.

The panel was comprised of Frank Dalton of Fulcrum Equity Partners, Marc Lederman of NewSpring Capital, Russ Wilson of TriVest and moderated by Thomas Armstrong of Silicon Valley Bank. TriNet, BDO, Morris, Manning & Martin, LLP, and Silicon Valley Bank sponsored the event. The three panelists began the conversation by describing the nature of venture capital firms, and why not every firm is tailored to every company. Businesses looking for venture capital ought to carefully weigh their options and find the VC firm that fits their profile. According to Dalton, “there is a partner for you somewhere,” you just have to find them. “You can find a fund that meet your needs,” Wilson added, advising that companies must first determine what their needs are.

Another major talking point was the amount of venture capital. According to Lederman, and the National Venture Capital Association (NVCA), 61% of companies receiving venture capital fell into three states: California, 42%, Massachusetts, 9%, and New York, 10%. Furthermore, those three states received 75% of the total $49.3 billion dollars worth of venture capital in 2014.

Florida, ranking seventh on the NVCA list, receiving 1% of the total venture capital in 2014, and was home to only 2% of the companies invested in.

Why is this? The panel discussed several factors that could potentially be affecting Florida’s venture woes. Among the factors was spacing. Both Dalton and Lederman agreed that Florida’s size, and the distance between urban hotspots like Miami, Orlando, and Tampa, make it a very hard state to manage. As Dalton put it, “there are a lot of pockets of entrepreneurship, but not a lot of pockets of management.”

The panel also seemed to agree that the amount of readily available C-level management in Florida was holding it back. Replacing talent in Florida did not strike the members of the panel as problematic, however replacing upper level management did, as executives aren’t as readily available as they are up North or out West.

The panel pointed out that because the level of investment in Florida is so low, it often results in better deals for VC firms, simply because there is not as much money floating around.

The panel wrapped up with questions from the audience and some light networking.

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