Wednesday, October 10, 2012

Funded Deals for 2nd Quarter in Texas are Up

The Texas Entrepreneur Networks Startup Funding Report represents private investments made into Texas startup and early stage companies for the third quarter of 2012.  It includes registered investments as well as the business entity filings for the state.  There is also a report from Gust, ( that highlights dealflow in the Texas-based angel networks.  Trends are noted as well as a forecast for early stage investments.  Also, the Texas Entrepreneur Network Startup Index which measures the health of startup businesses is shown.

TEN Startup Index
For Q3, 2012, the TEN Startup Index rose to 43 over the previous quarter of 40 and over the year ago quarter of 42.  The Index measures the health of the startup business community by looking at the number of new business entities filed, the number of funded companies, and the average raise.

Trends in Sectors
Overall the leading category for funding sector was Healthcare at $159M with 34 deals, followed by Biotechnology at $128M comprised of 15 deals and Information Technology at $73M with 18 deals. 

Trends in Regions
The North Texas region came in first with 60 deals worth $249M in funding, followed by the Gulf Coast region with 22 deals worth $131M.  Following that is the Central region with 50 deals worth $73M, the South region with 8 deals worth $51M.

TxEN Funded Companies
Startups seeking funding who participated in the TxEN program raised over $7M in the 3rd quarter of 2012.

Texas Startup Investment Trends
Crowdfunding skyrockets in attention and traction with the passage of the JOBS Act of 2012 in April.  While the laws are still under review, there is an explosion in the number of crowdfunding sites coming online. According to Massolution, there are over 520 crowdfunding websites today.   Equity-based sites are growing the fastest at 30%.

Business Filings
Business filings of new entities in the state of Texas in the 3rd quarter added 24,922 new entities which is a 4.7% decrease over the number of new entities filed in Q2, 2012.

In the third quarter of 2012, there were 1229 funding applications forwarded to investor groups in Texas. Texas remained in fourth place in the top 10 list of deal-making US states. Even though Texas did not move in rank, there still was a 7% increase in the amount of deals in Texas from Q2 2012 to Q3 2012.