By Nancy Dahlberg / ndahlberg@miamiherald.com
Consider this: Last quarter's single $1.2 billion venture round in San Francisco-based ride-sharing company Uber is larger than most venture funds and is bigger than some initial public offerings. And in 2014, Uber attracted two of those.
“It’s staggering money,” said John S. Taylor, head of research for the National Venture Capital Association, speaking at the Florida Venture Capital Conference in Hollywood on Friday. “But when you strip back some of the hype and look at what is going on in the rest of the country and even what’s going on in some of the concentration areas, it’s really for the most part business as usual. There are trends out there but also good opportunities in the marketplace.”
Venture capitalists from Ballast Point Ventures, Harbert Venture Partners, Fulcrum Equity Partners, Edison Ventures, River Cities Capital Funds and Stonehenge Growth Equity Partners – all firms that have funded Florida companies – joined Taylor in a panel discussion on the state of the industry (pictured above). The session capped off the 24th annual conference, presented by Florida Venture Forum, that attracted about 500 investors, entrepreneurs, lawyers and advisers to the Diplomat Resort & Spa Thursday and Friday.
Beyond the mega-deals, the number of first-time financings and the total number of deals changed little between 2013 and 2014, Taylor said. What's changed? He said because of the proliferation of accelerators, incubators and other programs, companies are now often further along in their development, receiving bigger checks. And there is another reason for the bigger deals: “We are seeing new sources of money: Mutual funds are coming in big, more hedge fund activity, a lot of private equity players that aren’t traditionally in venture rounds,” Taylor said.
In Florida, venture capital dollars doubled over 2013, thanks in large part to a $542 million mega-deal in Dania Beach-based Magic Leap, a secretive company developing augmented reality technology. Coming off such a phenomenal year, is the market overheated?
Consensus of the panel: frothy at the least. “Not every SaaS (software as a service) company is worth 10 times revenue. There are valuations out there that are outragous at times,” said Ed McCarthy, managing director of River Cities Capital Fund.
Still, all of the panelists were optimistic about opportunities in 2015. “All the trends are pointing in the right direction for the entrepreneur raising money,” said Lenard Marcus, partner in Edison Ventures. Marcus’s advice for the entrepreneurs in the audience hoping to entice a VC: Choose wisely. “It’s much easier to divorce your spouse than a VC.”
In addition to keynote speakers and panel discussions, 23 early-stage or later-stage Florida-based companies, were selected to present at the conference; 12 were from South Florida. The CEOs, who gave six-minute presentations on stage and urged the suits in the crowd to visit their booths, represented companies including Fresh Meal Plan of Boca Raton (pictured above), ALTPay of Hollywood, ParkJockey of Miami, PowerPHASE of Jupiter, Senzari of Miami and Skypatrol of Doral.
Steve Calle, CEO of Snow Lizard of Miami, which offers products to optimize and outdoor-proof your devices, invited investors to his booth to give his products a try. Few were willing to drop their own smartphones in the tank, preferring to take his word that the Snow Lizard cases are waterproof.
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