For Baltimore, Q1’s VC numbers mark a return to normalcy

The pandemic brought a lot of change and upheaval to the US workforce. But it came with one silver lining: Venture capital investment soared in its initial two years.

Now, the boom in the VC market is slowing, but it’s still higher than pre-pandemic levels. This much is evident in the Baltimore area and beyond, according to today’s new data from PitchBook and the National Venture Capital Association‘s latest Venture Monitor.

The report, which is prepared in association with Silicon Valley Bank and Affinity, notes that VC activity across the country has slowed from last year’s highs. Patrick McQuown, the executive director of entrepreneurship at Towson University, believes we’ll start seeing fewer “overall dollars going to seed rounds and A rounds” while Series B and further rounds “should keep pace.”

For the Baltimore metro, $153.75 million flowed to 23 companies in the first quarter of 2022. That’s one fewer deal than 2021’s Q1, which boasted $192.1 million for 24 companies.

In Maryland at large, venture funding tallied about $346.9 million and represented 53 companies. That’s almost half the money of the historic first quarter of 2021, which the report said saw $651.09 million go to 61 companies.

The Baltimore metropolitan statistical area’s top three deals from 2022’s Q1 were the $100 million dollar Series C for Facet Wealth, Whitebox‘s $20 million raise and the $14.4 million continuation of Apkudo‘s Series B. The top 10 also included Novel Microdevice, which raised $2 million, and EpiWatch‘s $1 million raise in the fifth and 10th slots, respectively.

In exit activity, the report noted the acquisitions of cancer genomics company Personal Genome Diagnostics and Gaithersburg-based biopharmaceutical company Arcellx.

For Baltimore to stay resilient as VCs tighten their purse strings, McQuown suggests a network of angel investors (akin to the Shenandoah Valley Angel Investors) in which angels show up, hear a pitch, meet founders and choose if they want to write a check.

“We need to coordinate and collaborate and take advantage of the new tax incentives, which allow area investors to write off their angel [and] seed investments on area ventures,” McQuown told Technical.ly. “We all know that angel rounds are the hardest to come by while simultaneously being the most impactful.”

“Angel rounds are easiest done by founders who come from wealthy families and have a network of wealthy individuals,” he added. “Heck, investors in public have said, ‘We expect the next Mark Z to look like Mark Z,’  and the whole, ‘I can get fooled by anyone who looks like Mark Z’ [thing]. That is implicit bias. Our area isn’t full of a bunch of Mark Zs.”