Tech Trends: NJ investors react to news that the state had an excellent year for venture funding

By now, most members of the New Jersey tech ecosystem have heard the phenomenal news that New Jersey ranked in the Top 10 in the nation for venture capital invested in 2021.

Innovation-focused companies in New Jersey secured $ 5.5 billion in 219 venture capital deals last year, up from $ 1.7 billion in 154 deals in 2020, according to the New Jersey Economic Development Authority and data on PitchBook. By contrast, in 2017, the state saw a total of only $ 818 million received in 143 venture capital deals.

While early-stage pre-seed and angel investments weren’t calculated separately, the state noted that, last year, the NJEDA approved a record-breaking 559 Angel Investor Tax Credit Program applications, a nearly 400% increase over 2020. These approved applications represented the injection of more than $ 100 million into 39 New Jersey businesses, the NJEDA said.

In brief, this means New Jersey startups, whether early-stage or growth-stage, are finally on the radar of the global venture capital community. It means that we are growing lots of quality, fundable companies that are thriving, scaling and making money for their investors. It means that we are employing a lot of people in the startup economy. It means that New Jersey’s efforts to create startup hubs throughout the state may be working.

Now, when the world thinks of where a lot of companies are getting funded, especially in health care, pharma and the life sciences, it will think of New Jersey once again. And it will also think of New Jersey’s ability to commercialize its technology in the areas of data, cybersecurity, agriculture, fintech, energy, materials science and other areas. Hopefully, the world will recognize that New Jersey’s government, universities, large companies, startups, venture capitalists, angel funders and industry organizations are now working together to create an even larger innovation economy here.

NJTechWeekly.com asked New Jersey VCs and angel investors to react to this news. Some were surprised, others not. Some saw continued momentum, while others worried about hitches in the future. Here’s what they had to say.

VCs

Jim Gunton
Founder and managing partner
Tech Council Ventures

Tech Council Ventures is delighted, but not surprised, to see New Jersey again ranked among the nation’s Top 10 venture recipients.

It just makes sense, given New Jersey’s level of innovation and research, senior commitment by Gov. Phil Murphy’s administration and NJEDA, historic venture dollars invested and today’s support by the venture, corporate and angel ecosystem.

Tech Council Ventures, based in Summit, invests in seed and Series A financing across all industries throughout the mid-Atlantic region.

Chris Sugden
Managing partner and chairman of the investment committee
Edison Partners

We are not surprised by the attraction of New Jersey for technology investment, and we are happy to see the momentum. The state has been a longstanding hub of entrepreneurial innovation; technology talent is deep; the state also has unique advantages in high-growth industries such as fintech, supply chain and pharma. Edison Partners’ success in New Jersey is a testament to the opportunity in our state. Two of our Top 5 all-time best returns are from companies founded, scaled and headquartered in New Jersey. The government’s focus on the entrepreneurial ecosystem and innovation is helpful and necessary. A big challenge is going to be keeping talent in New Jersey, as the cost of living in New Jersey is an ongoing challenge. We are seeing that talent is much more portable and, as many have observed, the impact of the pandemic makes remote work much more prevalent.

Edison Partners, based in Princeton, invests in and brings strong domain expertise to three areas: fintech, health care information technology and enterprise solutions. The firm invests $ 10- $ 30 million in high-growth, recurring-revenue technology companies in these industries. Its current portfolio is located outside Silicon Valley, across 18 states.

Thomas Wisniewski
Managing partner
Newark Venture Partners

The NJEDA has been a longtime partner of Newark Venture Partners, and its work alongside the governor to encourage the innovation economy is paying off. In Newark, we are excited to see the addition of new accelerators and incubators, which are helping to both enhance the talent network and engage new founders from within the state. As early-stage investors, we see a huge opportunity in this growing ecosystem, particularly in verticals like healthtech, fintech and supply chain, where our geography and corporate community can really benefit growing companies.

Newark Venture Partners identifies, invests in and supports best-in-class B2B software founders from all over the country as they build innovative solutions for some of today’s most complex business challenges. NVP leads or participates in seed rounds with investments of up to $ 2 million.

Angel investors

Stephen Dyer
Chairman
Jumpstart NJ Angel Network

I was both surprised and happy to see that news. While it will always be a challenge for startups to get funding from angel investors, startups need to then make significant progress with this capital to continue to receive follow-on growth funding. The increased interest from VCs will help with the search for follow-on capital. Additionally, the investment by a VC will have a multiplier effect on the New Jersey ecosystem as its capital fuels growth.

JumpStart NJ Angel Network, based in New Brunswick, is a member-led angel group of successful serial entrepreneurs, business executives and venture capitalists who actively invest in early-stage startup technology ventures in the mid-Atlantic region and beyond.

Mario Casabona
Founder and managing director; Angel investor
TechLaunch and Casabona Ventures;
JumpStart NJ Angel Network

To start off, we must recognize the impact that the state’s administration and the NJEDA has had on New Jersey’s ranking in the VC community. The passing of the New Jersey Economic Recovery Act of 2020 paved the way for the establishment of the New Jersey Evergreen Fund; enhanced the Angel Investor Tax Credit Program; and reconstituted the Commission on Science, Innovation and Technology. These (and other programs) have given our entrepreneurial ecosystem the clear message that New Jersey is open for business. And New Jersey’s administration is willing to continue its support.

I must point out that New Jersey’s ranking is not only due to the recent administration’s impressive efforts, but also reflects our long culture of entrepreneurship and innovation. As a rule, significant VC funding comes in at a later stage, and usually after investments by angel investors. We are now seeing the outcome of programs from innovation accelerators such as Newark Venture Partners, TechLaunch, (New Jersey Innovation Institute), NJEDA’s angel tax credits and many other seed-stage efforts that feed our deal pipeline. New Jersey’s recent PitchBook ranking has its basis in the state’s ability to both foster innovation and stimulate its commercialization potential.

I would say that this progress has been long in coming and will require sustained efforts from New Jersey’s administration, NJEDA, private capital (angels and VCs), university research and a vibrant entrepreneurial community. Bottom line: The positive news about this ranking points to even more fertile ground in doing business in the Garden State.

The TechLaunch business accelerator program, based in West Orange, is designed around a rolling application process in which early-stage startups receive mentoring that guides them toward investors and a successful due-diligence process. Casabona Ventures invests in post-seed stage companies in the mid-Atlantic region.

Lyneir Richardson
Executive director; Founder
Center for Urban Entrepreneurship & Economic Development, Rutgers Business School;
Black and Latino Angel Investment Fund of New Jersey

Gov. Murphy and the NJEDA made commitments to inclusive innovation. The news of more private investment in the state is a clear record of the effectiveness of the programs and policies.

CUEED launched and now operates the Black and Latino Angel Investment Fund, which is a group of investors providing seed-stage capital to high-growth, next-economy startups owned by people of color. The Black and Latino Angel Investment Fund brings diverse experiences as New Jersey-based entrepreneurs and successful small business owners, academic leaders, corporate representatives and venture corporation founders.

Harvey Homan
Chapter president
Keiretsu Forum North Jersey

The intention of Gov. Murphy, NJEDA and NJCSIT has been to foster innovation and economic development in the Garden State. Since 2018, the volume of capital and interest in early-stage venture investing has grown to meet the exponential growth of entrepreneurial activity. I anticipate continued growth of the ecosystem; it is the primary reason we established the Keiretsu Forum North Jersey Chapter. Early-stage startups in New Jersey had a phenomenal showing in 2021; we are positioned to make 2022 look even better, especially in the areas of seed and early-stage.

According to the Keiretsu Forum Mid-Atlantic website, Keiretsu Forum is a conglomeration of serious investors, business leaders, venture capitalists, corporate / institutional investors and serial entrepreneurs bound by two overlapping and codependent goals:

  • To work together for each other’s mutual benefit, forming strategic partnerships, enhancing each other’s knowledge and building an angel network of diverse skills;
  • To access promising angel investment opportunities around the world.

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ROI-NJ has teamed up with Esther Surden, creator of njtechweekly.com, to bring you insight into the tech world.

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