Useful Stats: Share of U.S. venture capital activity and per capita investment by state, 2010-2016
Once again, more than three-quarters of U.S. venture capital (VC) dollars went to companies in California, New York and Massachusetts in 2016, according to data from the PricewaterhouseCoopers (PwC)/CB Insights’ Moneytree Report Explorer. Approximately 53.3 percent of all VC capital went to California companies, down nearly 4.4 percent from the states peak in 2014 (57.7) and down 3.9 percent from 2016. While California’s share declined, both Massachusetts and New York saw increases in their share of VC dollars invested:
- Massachusetts increased from 9.7 percent in 2015 to 10.3 percent in 2016; and,
- New York increased from 10.6 percent in 2015 to 12.7 percent in 2016.
SSTI has prepared data on venture capital investment by state per capita and by share of the national total based on the PwC/CB Insight’s data. That data, along with state-by-state totals for 2010-2016 are available in Excel format. The spreadsheet also includes a break of deals and total dollars raised by quarter for each state in 2016.
California remained the number one state for share of total number of deals with 41.9 percent in 2016 (up from 40.5 percent in 2015). While Massachusetts continues to lead the nation in deals per capita, with about 5.8 deals per 100,000 residents.
The findings of the study continue to show that the Great Recession did little to reduce California’s primacy in U.S. venture capital with Massachusetts and New York also showing strong resilient VC markets for the last six years. From 2010 to 2015, these three markets have been driven by large deals, rather than steady increases in the number of deals.
However, 2016 may mark a shift from these large deals (especially the practice of unicorn hunting) with all three states seeing increases in the number of deals. As investors exhibit more caution in 2017, will the market show more centralization in the number of deals in these three markets?
Outside the three leading VC markets, only Texas and Washington had a share of more than 2 percent of total U.S. VC dollars and only eight states captured at least a 1 percent share of the total U.S. VC dollars. In comparison, four states (Colorado, Illinois, Texas, and Washington) captured at least 2 percent of all VC deals with seven more states capturing at least 1 percent of all VC deals.
The 2016 Money Tree Report marks the first report from PwC/CB Insights’ new partnership announced in 2016. In previous years, PwC had partnered with the National Venture Capital Association - NVCA and Thomson Reuters on the Money Tree Report. With the new partnership, there were slight modifications to the methodology of data collection including a focus on excluding grant funding from public and nonprofit investors. However, CB Insights has indicated that equity deals by those groups are still included in the findings.venture capital VC by State 2016 Edition.xlsx