Report: Area venture-capital funding at lowest level since ’96

When it comes to venture capital, the Philadelphia region is no Silicon Valley.

But according to new data from PricewaterhouseCoopers and the National Venture Capital Association, 2012 is shaping up to be especially slow.

The last year that venture capital investment in the greater Philadelphia area was under $400 million was 1996.

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Data:  PricewaterhouseCoopers and the National Venture Capital Association. * Projected

 

This year is on pace to break that streak. Through the first two quarters, only $193.24 million has been invested.

“It is not surprising,” said Dean Miller, managing partner at Wayne, Pa.-based Novitas Partners and CEO of the Greater Philadelphia Alliance for Capital and Technologies.

The poor showing post-recession reflects a “flight to safety” by big-time investors, Miller says. They’re skipping over Philly for more established tech markets. The poor showing in the greater Philadelphia area bucks the national trend of healthy venture capital activity.

Miller says this year’s paltry numbers locally could hamper the development of bright ideas into viable companies.

“Philadelphia, once upon a time, was in the top five in the country in venture capital investment,” Miller said. “In the latest report [it ranked] 14th.”

Miller says it’s tough to raise capital these days, even for seasoned entrepreneurs. 

Charles Robins of the investment firm Fairmount Partners agrees.

Still, he says the latest data is part of a bigger problem.

“I’m aware of a good number of entrepreneurial startups,” Robins said. “But I would say this region had always suffered historically from a lack of focus and a lack of money to fund early and development-stage companies.”

Robins says there are rumors of some new venture fund formation going on in the region.

If that happens, he says, local startups could see more action.