Venture capital vanishes in Florida

Venture capital investments in Florida during the fourth quarter and for all of 2002 plummeted to their lowest levels in seven years amid a sharp decline nationwide, according to a survey released Monday.

Florida, the nation's fourth-largest state economy, saw its share of such investments fall to 13th among all states last year, its lowest rank since the survey began tracking venture capital deals in 1995.

The MoneyTree survey, which is produced quarterly by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association, showed that venture capital investments in Florida companies plunged to $20.8-million in the fourth quarter, down 88 percent from $170.7-million a year earlier. That's the state's smallest total in a single quarter since the fourth quarter of 1995.

Ten venture-capital deals in Florida were reported in the fourth quarter. Two of the investments were made in Tampa Bay area companies. Pilgrim Software of Tampa snared a $2.15-million investment, while Gold Coast Restaurants of Tampa pulled in a $1-million investment. Two Florida venture funds -- CrossBow Ventures of West Palm Beach and Stonehenge Capital of Tampa -- accounted for nearly 15 percent of the total capital invested in Florida companies during the quarter.

For 2002, Florida's take of venture investments totaled $356.75-million, down 62 percent from $936.4-million in 2001, again the lowest amount since 1995. Venture investments nationwide fell 49 percent to $21.2-million in 2002 from $41.7-million in 2001. Florida's share of nationwide venture capital investments in 2002 came in at only 1.7 percent, down from 2.2 percent in 2001.

Marty Donsky, southeast regional marketing manager for PWC in Washington, said there were two contradictory trends at work in venture capital investments nationwide.

Given their recent losses, venture capital funds are under enormous pressure from their limited partners to take a hard look at their investments, Donsky said.

At the same time, he noted, some large established funds are being very aggressive in looking for deals to take advantage of lower valuations. "But," he said, "they're not doing these deals in Florida."

-- Times staff writer Kris Hundley contributed to this report.

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