MTDC Aims to Help Fill Funding Gap in
Support of the Innovation Economy
MTDC Survey indicates there is a capital gap for first time entrepreneurs and for entrepreneurs raising between $50,000 and $3,000,000
The Massachusetts Development Corporation (MTDC) today released the results of a survey that provides a broad perspective on the state of the funding market for early stage technology companies in Massachusetts. Results from more than 300 Massachusetts entrepreneurs, investors and other members of the innovation economy strongly confirmed that there is a capital gap and it primarily exists between $50,000 and $3,000,000. As important as the size of the financing that is difficult to get, 60% of respondents indicated it is very difficult for first-time entrepreneurs to raise capital.
Key findings from the MTDC survey include:
- 86% of respondents indicate there is a capital gap
- 93% report the gap is between $0 and $3,000,000
- 60% said it is very difficult for first-time entrepreneurs to raise capital
- 75% indicate the MTDC's investments should be $500,000 or less but the number of MTDC investments should increase
- There is a shortage of capital for underserved industries and geographies in the State
According to the survey, the role of MTDC extends far beyond just capital. MTDC is a catalyst for additional funding resources and provides the mentorship and guidance to successfully launch and grow new ventures. However, 65% of respondents believe MTDC would not be as effective a catalyst in the Innovation Economy if it ceased providing funding. 88% of respondents say MTDC needs to invest in at least four companies annually to be relevant in the community.
"In the year to come, MTDC is working towards the goal of being self-funded while making investments to fill the capital gap. Let's make the climate in Massachusetts as conducive as possible for keeping the entrepreneurs and the companies they have created here, growing and fostering jobs and opportunities," said Jerry Bird, president of MTDC. "Given the challenges and opportunities the survey identified, MTDC intends to increase its number of investments through new initiatives, including the new Fast Track Program to fund two MassChallenge finalists. We will continue to be a vital piece of the innovation economy, working along side the venture capitalists and angel investors to spur the entrepreneurial spirit within our state."
For the MTDC Innovation Economy survey, the organization surveyed more than 300 Massachusetts entrepreneurs, investors, and other key segments. 50% of responses received were from entrepreneurs, both aspiring and seasoned, 20% were from the venture community and 30% were from service industries including government, trade and universities. More details and the full survey results can be found at http://www.mtdc.com/2011survey.pdf.
About Massachusetts Technology Development Corporation
Massachusetts Technology Development Corporation (MTDC) is a leading edge venture capital firm that addresses the "capital gap" for start-up and expansion of early-stage technology companies operating in the Commonwealth of Massachusetts. MTDC has invested in many of Massachusetts' most promising new technology-based companies. Learn more by visiting www.mtdc.com.