Investment Deals Slow For Ben Franklin Technology Partners In ‘Tightened’ Capital Market.

Investments by Ben Franklin Technology Partners of Southeastern Pennsylvania in fiscal year 2023 reflected a slow capital market, and CEO Scott Nissenbaum said more of the same could be coming.

Ben Franklin receives state funding, so it isn’t as pressured by external market conditions as a traditional venture capital firm, but it still saw fewer companies raising money as valuations sank in the past 12 months. The result was Ben Franklin Technology Partners investing $6.4 million in 31 companies in its fiscal year ending June 30, down from the $11 million invested across 48 deals in fiscal 2022.

The uncertain fundraising environment also meant Ben Franklin made more follow-on investments — 77% to be exact — as it placed its bets on more proven startups it already had relationships with.

As valuations tightened, investment activity slowed, Nissenbaum said. Startups that could weather the storm without fundraising at a lower-than-desired valuation would do so. Nissenbaum said that left the tech investor making far fewer than the roughly 45 investments it typically does each year.

“That’s a function of there’s a lot less companies raising capital and the ones that are raising capital, I don’t want to say they’re forced to but if they had their druthers they would wait this market out,” Nissenbaum said.

The major chunk of follow-on investments was also a function of the market, Nissenbaum said. The organization, like a traditional venture capital firm, looks to protect its existing investments in an uncertain capital environment. Based on the first nearly three months of fiscal 2024, Nissenbaum said Ben Franklin is tracking to be closer to the numbers from 2023 than years prior.

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