Worcester Business Journal

2011-Q1 $ 164,376,900 17 $94,350,000 8 $719,355,800 96 $148,603,400 24 2011-Q2 $ 426,002,100 28 $142,191,000 15 $866,119,300 98 $134,443,400 23 2011-Q3 $ 185,077,100 25 $48,462,200 6 $705,252,000 88 $109,149,900 27 2011-Q4 $ 398,552,600 30 $31,515,900 7 $576,163,300 85 $186,430,100 29 TOTAL $1,174,008,700 100 $316,519,100 36 $2,866,890,400 367 $578,626,800 103 2012-Q1 $268,935,600 33 $82,324,800 10 $719,024,800 82 $105,617,000 23 2012-Q2 $137,452,200 21 $152,132,200 5 $675,701,600 90 $187,336,200 33 2012-Q3 $285,288,400 27 $24,135,000 5 $495,282,200 75 $214,498,400 30 2012-Q4 $411,894,300 29 $24,406,100 6 $621,295,100 83 $242,558,200 36 TOTAL $1,103,570,500 110 $282,998,100 26 $2,511,303,700 330 $750,009,800 122 2013-Q1 $172,459,900 16 $3,892,100 4 $576,152,500 77 $222,308,900 30 2013-Q2 $182,595,600 20 $45,857,000 7 $558,295,800 88 $151,519,200 21 2013-Q3 $281,346,300 28 $14,860,000 4 $571,181,400 76 $152,830,700 31 2013-Q4 $ 383,838,600 29 $123,321,100 14 $477,836,000 104 $142,257,600 29 TOTAL $1,020,240,400 93 $187,930,200 29 $2,183,465,700 345 $668,916,400 111 2014-Q1 $250,752,600 22 $3,467,000 4 $624,806,300 70 $277,197,800 35 2014-Q2 $495,113,100 27 $54,302,900 5 $712,880,900 77 $238,194,300 37 2014-Q3 $183,804,500 13 $16,075,300 6 $651,546,000 86 $237,268,100 37 2014-Q4 $ 970,280,700 28 $54,587,100 6 $745,452,000 90 $378,640,300 44 TOTAL $1,899,950,900 90 $128,432,300 21 $2,734,685,200 323 $1,131,300,500 153 2015-Q1 $587,918,300 31 $38,572,800 6 $482,691,900 76 $259,460,300 40 2015-Q2 $495,734,700 27 $47,079,100 10 $841,726,500 83 $480,367,300 38 2015-Q3 $676,863,200 27 $28,102,800 4 $855,627,700 84 $507,307,300 39 2015-Q4 $371,291,900 19 $60,998,000 6 $651,280,700 84 $376,604,800 26 TOTAL $2,131,808,100 104 $174,752,700 26 $2,831,326,800 327 $1,623,739,700 143 2016-Q1 $852,980,800 34 $11,180,100 6 $521,039,300 58 $450,083,500 40 2016-Q2 $495,451,300 21 $4,719,000 2 $538,803,000 61 $199,673,500 23 www.wbjournal.com Worcester Business Journal • 2016 Central Mass By The Numbers 21 Banking & Finance Software Venture capital investment in Mass. increased steadily from 2011 Investment Number Year & Qtr. amount of deals Investment Number amount of deals Investment Number amount of deals Investment Number amount of deals Biotechnology Industrial/Energy Medical Devices and Equipment Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report; Note: Includes revised data F or years, venture capital firms have been giving Massachusetts life sciences companies a strong boost. In 2015, VCs invested $2.1 billion in 104 biotechnology firms in the state, plus another $2.8 billion in 327 medical device firms. And in just the first half of 2016, they provided another $2.4 billion between the two industries. Investment in biotech in particular has been on the rise in recent years. The total investment in that sector for the first half of 2016 alone was more than the figure for all of 2011. While Cambridge remains the go-to city for the life sciences, Kevin O'Sullivan, president and CEO of Worcester-based Massachusetts Biomedical Initiatives (MBI), said plenty of the growing support is flowing into Central Massachusetts. With office and laboratory space often prohibitively expensive in the Boston area, he said, many companies are looking west. "There's a golden opportunity that is along this burgeoning biotech corridor," O'Sullivan said. O'Sullivan said a particular focus for Central Massachusetts communities is biomanufacturing and other activities that demand significant square footage. "We're seeing a real big uptick in start- ups in the life sciences looking for lab space out this way," he said. A center of software activity Another industry that's seen increas- ing venture investment in recent years is software. In 2011, venture firms invested just $579 million in Massachusetts software firms. But the number rose steadily upward through 2015, hitting $1.6 billion. Joe Vignaly, chair of the Venture Forum in Worcester, said the I-495 cor- ridor is a center of software activity. There seems to be a lot of interest in these companies as profitable invest- ments. At one Massachusetts confer- ence, Vignaly said, there were 65 or 70 companies testing the waters with large investment houses. "There's a lot of activity," he said. Vignaly said it can be hard to say why one industry gets more attention from VCs in any given year. Often, he said, it has to do with the specifics of the com- panies and the funds involved. "It's kind of like dating," he said. "It's finding the right situation, the right investor, the right company." Depending on what's already in its portfolio, one fund may be looking spe- cifically for an investment that will pay off in 3 to 5 years, or for a way to buy in to a specific market, Vignaly said. "All these factors pay into the psychol- ogy of the VC, not just, 'Is a company worthy of my investment?'" he said. Trickle-down valuations Vignaly said another factor is the state of publicly traded biotechnology stocks, which have been in a bit of a slump for more than a year. He said he's heard anecdotally that concerns about publicly held companies may be trickling down, reducing the valuations of earlier stage firms. For those companies that don't find venture capital abundant, O'Sullivan said there are a number of other options. Some find that foreign investors from China, India or elsewhere have an inter- est in buying into American technology companies. Other times, local startups may find merging with, or being acquired by, another company makes sense. That was the case with Blue Sky Bioservices, which got its start in MBI's incubator before being acquired by California-based LakePharma Inc. in March. Another option for investment-hun- gry startups is angel investors, generally wealthy individuals who choose to invest their own money in a promising firm. O'Sullivan said local groups like Boynton Angels can be a good bet for firms that don't need a huge influx of money and want to maintain more independence. "Once you take investment from ven- ture capitals, they're going to own you," he said. "Chances are they're going to own a greater percentage of the compa- ny. People are saying, 'Unless I need it, I'm not sure I want to do that.'" But for venture capitalists who would like to find good opportunities in Central Massachusetts, Vignaly said there are likely to be strong prospects in the years to come. With GE's new corpo- rate headquarters in Boston and its Healthcare Life Sciences division now operating out of Marlborough, he said, there will be more going on in the region's technology sectors. "Over the next couple of years we're going to see a lot more activity," he said. "That ripple effect is going to happen." Central Mass. firms cashing in on VC confidence BY LIVIA GERSHON Special to the Worcester Business Journal W

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