Tuesday, November 21, 2017
Business

Will stronger startups draw venture capitalists to Tampa Bay?

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This year alone, Ricardo Lasa and his team have twice persuaded venture capitalists to invest in his Lutz business, SiteWit Corp.

The $3 million has helped propel the startup through its vulnerable early days, he said.

The company caters to small businesses seeking more efficient ways to market themselves online. Now that it has partnered with such search engine giants as Google and Bing, SiteWit has a more muscular story to tell potential investor groups.

"We are gaining traction in a space with the potential of a lot of customers," says Lasa. "We are in a large space — online marketing — that everyone understands well."

And while SiteWit keeps close ties with Silicon Valley, Lasa says a Tampa Bay headquarters is a big business advantage. Competition for top engineering talent in Silicon Valley is expensive and fluid, he says. The team behind 3-year-old SiteWit here has been working together for a decade.

So far in 2013, four Tampa Bay area startups have attracted close to $30 million. That's out of $277 million committed to 34 deals across the state. The bulk of that money — $65 million — landed at a Miami firm called FoxyP2 that operates an online language school serving Spanish-speaking students around the globe.

Still, the latest numbers pale when compared to the peak of the "dot-com" boom that started in the late 1990s. In the first three quarters of 2000, Florida attracted a record $2.3 billion in venture capital. In the third quarter of 2000 alone, shortly before the technology bust, Florida attracted $927 million in venture capital, according to data collected by PricewaterhouseCoopers and the National Venture Capital Association.

The state has struggled to regain much venture capital momentum since then.

Consider that Florida attracted just $104 million for 12 deals in the third quarter this year. Nationwide in that same three-month period, venture capitalists invested $7.8 billion in 1,005 deals.

That means Florida — soon to be the nation's third-largest state by population — attracted just 1.2 percent of the nation's venture capital deals in the quarter, and won 1.3 percent of the funding.

That's like trying to water a thirsty garden with an eyedropper.

But it's not impossible. SiteWit's Lasa, who is a board member of the FirstWaVE business accelerator in downtown Tampa, agrees it's tough for early startups to gain traction. But a business that starts to show a track record of sales will find increasing sources of potential funding in Tampa Bay and Florida.

Lasa says the quality of area startups will improve as larger groups of successful technology entrepreneurs commit to mentor companies.

"That will be a first step in helping spawn other companies that will do well," he says.

The missing piece to this funding puzzle? Convincing both local and distant venture capital folks that the ground swell of Tampa Bay startups is worth more of their time — and money.

Robert Trigaux can be reached at [email protected]

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