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Experts see fresh energy in Florida's 2011 venture capital market

The pace of venture capital activity in Florida last year was pretty dismal.

For all of 2010, Florida ranked 15th among states in the amount of invested venture capital dollars. By the fourth quarter, Florida had dropped to 26th.

Only five Florida companies received venture capital in the last three months of 2010.

So says the MoneyTree quarterly venture capital update by the National Venture Capital Association and PricewaterhouseCoopers.

But this is not the time to dwell too long in the rearview mirror. Up ahead, the investing capital picture looks different. Venture capital experts and area companies on the hunt for funding say they see fresh energy in the 2011 venture capital market. The recent Florida Venture Forum, an annual gathering of venture capitalists and big companies looking for young, promising businesses to invest in, attracted more investors than any forum of the past 20 years.

"Things are starting to crank up," says Robin Kovaleski Lester, who heads the Florida Venture Forum. Held earlier this month in Hollywood, the forum drew venture capital firms like St. Petersburg's Ballast Point Ventures and Tampa's Stonehenge Capital, plus investors from as far away as Canada, Germany and Chile. Companies looking for promising technology to invest in included heavyweights Lockheed Martin, Merck, Pfizer, Microsoft, Intel and Sony.

Still, Kovaleski Lester cautions, there are limits to investing exuberance.

"We do not have an MIT or a Stanford in our back yard," she says. "Is the University of Florida terrific? Absolutely. Are the University of Central Florida and University of South Florida great? Sure. But we are not a Massachusetts or a California.

"But Florida can be the best it can possibly be," she says. "We still have some heavy lifting to do."

For the record, in 2010 California enjoyed nearly $11 billion in venture capital investing, while Massachusetts ranked second among the states with almost $2.4 billion.

Florida came in under $186 million.

One company attending the forum in search of $5 million in funding is St. Petersburg's Claro Scientific, a University of South Florida spinout started in 2006. The nine-employee company boasts cutting-edge medical diagnostic services that CEO Tom McLain says can often deliver results to health care professionals in minutes rather than hours or days.

"The mood at the forum was the most positive and upbeat than I have seen in a long time," says McLain, the former chairman of BioFlorida, a group of 200 businesses representing Florida's bioscience industry.

"Florida is not out of the woods yet," says McLain, describing the state as "off the beaten track" of major venture capital firms. Florida's widespread metro areas make it inefficient to find and monitor investments here. The state, he suggests, could help improve the venture capital experience by making it easier for investors to meet companies seeking funding.

Next Wednesday, it's BioFlorida day in Tallahassee where McLain hopes to swap such ideas with the new governor.

Adds McLain: "Combined with great technologies coming out of the universities, it bodes well for the short- and long-term in Florida."

After a bearish 2010, the bulls of 2011 are awakening.

Robert Trigaux can be reached at [email protected]

Experts see fresh energy in Florida's 2011 venture capital market 02/08/11 [Last modified: Wednesday, February 9, 2011 6:54am]
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