Capital Chaos

So the National Venture Capital Association released a report which looked at the fastest growing regions for venture capital outside of Silicon Valley and the results were interesting to say the least.

While the Valley and New England remain the country’s leading regions for investments, they are not the fastest growing according to the report which was also conducted by The MoneyTree Report by PricewaterhouseCoopers. 

The report disclosed that in the last ten years, smaller pockets have achieved some pretty startling success such as New Mexico and Pittsburgh. 

The analysis focused on the ten-year growth rates for regions across the country and ranked the fastest growing areas based on number of companies funded, excluding areas that had under $100 million in investment in 2007.

In New Mexico for example, the study showed the following:
Top industries: Clean Technology, Life Sciences, Semiconductors
Most Active Investors: Verge, Flywheel Ventures, EPIC Ventures
Stage of Investment: 52 percent of the companies were Seed/Early stage
Largest Investments: Advent Solar, MIOX Corporation, Aspen Avionics

Pittsburgh:
Top industries: Life Sciences, Software, Clean Technology
Most Active Investors: Innovation Works, Draper Triangle, Pittsburgh Life Sciences Greenhouse,
Novitas Capital
Stage of Investment: 66 percent of the companies are Seed/Early stage
Largest Investments: Millennium Pharmacy, Logical Therapeutics, BPL Global

Seattle:
Top industries: Software, Life Sciences, Media and Entertainment
Most Active Investors: Ignition Partners, Madrona Venture Capital, OVP
Stage of Investment: 42 percent of the companies were Seed/Early stage
Largest Investments: Imperium Renewables, Telecom Transport, Dexterra

Los Angeles:
Top industries: Media and Entertainment, Software, Clean Technology
Most Active Investors: Clearstone Venture Partners, US Venture Partners, Draper Fisher
Jurvetson, Redpoint Ventures
Stage of Investment: 41 percent of the companies are Seed/Early stage
Largest Investments: Amp’d Mobile, Ceres, Vantage Media

Washington DC Metroplex:
Top industries: Software, Life Sciences, Telecom
Most Active Investors: Novak Biddle Venture Partners, Columbia Capital, Grotech, New
Enterprise Associates, Valhalla Partners
Stage of Investment: 37 percent of the companies were Seed/Early stage
Largest Investments: Bravo Health, BillMeLater, Gridpoint

What is a bit confusing about the results of the report are that with the exception of LA and Washington, the reason that we tend to see so much invested in the Valley and New England is because of the schools in those areas.  They are breeding grounds for smart, well-educated and often times have a higher concentration of enviornments that are conducive to group thinking because of the proximity of the companies around them.  As well, you dont go to Stanford to just “get by” or MIT and it is that competitive nature which typically results in graduates with a greater passion for making things happen.  It’s not to say the same cant be true in New Mexico or Pittsburgh but the University systems there dont seem to promote the same ideals that a Standford or MIT do. 

It is good to see that the country is becomming more diversified in both the products being created outside the traditional areas of the Valley and NE and it’s equally as exciting to see that investors are supporting them.  With a fully networked country as we are becomming, great ideas are written on a napkin in any of the States and the support of those ideas is encouraging.