Skip directly to content

The Pittsburgh Venture Capital Report

on Thu, 04/11/2013 - 21:35

Over the course of the five-year period from 2008 to 2012, the Pittsburgh region saw 217 local start-up companies raise over $1.3 billion dollars in investment funds. Despite a national slowdown in seed financing in 2012, funding in the area actually increased from 2011 in regards to the number of startups that year. While different parts of the country are usually strong in one particular field, meanwhile, the Steel City’s entrepreneurial strengths are spread out over a wide variety of industries, including enterprise and consumer software, medical devices, heath care, biotechnology and energy. Pittsburgh startups are also finding “exit” success, with 28 companies being sold during 2008-2012 to the tune of over $2 billion.

The above statistics are the highlights of a report commissioned by Innovation Works—the largest seed investment company in Pittsburgh—and accounting firm Ernst & Young. Taken together, they paint a bright and promising picture of the region’s start-up community and point the way to an even more robust future. “If quality companies are created, someone will always fund them,” Kelly Szejko, president of the Pittsburgh Venture Capital Association, told the Pittsburgh Post-Gazette. “And I think the fact that we’re getting attention from (investors) from California, New York and Boston shows the word is getting out about the quality of Pittsburgh’s companies.”

The report on the Steel City’s venture capital activity comes on the heels of the 3 Rivers Venture Fair at PNC Park on April 10, 2013, a two-day event that features various panel discussions for early and later-stage investors as well as the opportunity for 39 local technological companies to pitch their wares in the hopes of finding funding. The 3 Rivers Venture Fair—which is sponsored by the Pittsburgh Venture Capital Association—has been an annual event in Pittsburgh since 2002 and has helped local startups raise in excess of $400 million over the course of its first ten years in existence.

During the event, each participating company is allotted nine minutes to make their presentation to a group of venture capitalists in order to convince them that their product is worthy of their money. Among this year’s applicants is Sharp Edge Labs Inc., a local biotech company hoping to raise $2 million, and Philadelphia-based Graphene Frontiers LLC, which is looking for $1.2 million in funding. “It starts with the idea,” Kelly Szejko explained to the Pittsburgh Tribune Review. “If you have a great idea and have a great person selling that idea, you have a leg up for getting investors.”

Although nine minutes may seem like a short period of time on which to hang one’s hopes, the potential for success greatly overshadows the risks. As the jointly commissioned report by Innovation Works and Ernst & Young makes clear, Pittsburgh is rapidly becoming the “place to be” for startups—a trend that will no doubt increase in the years to come.

Anthony Letizia (April 11, 2013)

Follow Geek Pittsburgh: Facebook - Twitter - RSS Feed