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Useful Stats: VC investments nearly triple in past six years; 31 states outperformed 5-year average for dollars invested in 2018

January 24, 2019
By: Robert Ksiazkiewicz

Over the six-year period from 2013 to 2018, as total venture capital investments nearly tripled, growing from $47.5 billion in 2013 to nearly $131 billion in 2014, the number of deals increased by just 13.5 percent according to new data from the NVCA-PitchBook Venture Capital Monitor. The $131 billion in total VC investments in 2018 is the largest amount since PitchBook began tracking the data in 2006 and the first year since the height of the dot-com boom that annual capital investment eclipsed $100 billion. Last week, SSTI wrote how the VC industry was shaped by concentration including both geographic concentration and increases in mega-rounds/funds in 2018.

Based on the PitchBook data, SSTI has prepared information on VC investment by state and changes over time. That data, along with state-by-state totals for 2013-2018 are available in Excel format below. In addition to deals and dollars for each state, SSTI also includes:

  • Comparisons of 2018 data with 5-year averages for both dollars and deals;
  • Six-year percent change (2013-2018) for both dollars and deals;
  • Three year percent change for the last three years (2016-2018) for both dollars and deals; and,
  • Three year percent change (2013-2015) for both dollars and deals.

California had, by far, the most venture capital activity in 2018 (3,957 deals totaling $42.8 billion), followed by New York (1,411 deals totaling $13.5 billion) and Massachusetts (869 deals totaling $11.7 billion dollars). Ten other states recorded more than $1 billion in VC investment in 2018: Washington ($3.0 billion); Texas ($2.8 billion); North Carolina ($2.5 billion); Illinois  ($1.9 billion); Florida  ($1.7 billion); Colorado ($1.6 billion); Pennsylvania ($1.6 billion); Maryland ($1.4 billion); Georgia  ($1.1 billion); and, Utah ($1.1 billion). Alaska, Hawaii, Mississippi, North Dakota, South Dakota, and West Virginia were the only states to have fewer than 10 VC deals in 2018.

Comparing 2018 VC activity to 5-year averages

To help address the spikiness of annual VC data, SSTI calculated averages for dollars and deals from 2013 to 2017, and then compared those averages to 2018 dollars and deals. While no states saw an increase in both dollars and deals in 2018, Minnesota, North Carolina, North Dakota, and Washington saw increases in the amount of dollars invested in 2018; while also matching their 5-year average in number of deals made. In comparison, in 2018 12 states failed to match their five-year average for both dollars and deals including: Alabama, Alaska, Hawaii, Louisiana, Maine, Montana, Nebraska, Nevada, New Jersey, Tennessee, West Virginia, and Wyoming.

Of the remaining 34 states, six states were able to match or surpass their 5-year average for deals without seeing an increase in the number of dollars invested including: Arkansas, Delaware, Idaho, New Hampshire, Rhode Island, and Vermont. On the other hand, 28 states mirrored national trends with a decline in the number of deals, but an increase in the number of dollars invested. They included: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, and Wisconsin.

In the two charts below, SSTI performed an analysis that compared deals and dollars in 2018 to the 5-year average (2013-2017). For both deals and dollars, the data was normalized so that 1.0 indicates that the 2018 total was approximately equal to the 5-year average. Any number below 1.0 indicates that the 2018 total underperformed the 5-year average. Conversely, any number above 1.0 indicates that the 2018 total outperformed that state’s 5-year average.

 

Notes

The PitchBook data presented for 2018 should be considered preliminary data due to the nature of the data collection. PitchBook makes multiple updates to their database as information about new deals become available. Due to the nature of disclosure, especially for early stage deals, there can be a lag in access to that information. The data presented should be guidelines for understanding the investment ecosystem in each state and highlights trends, but is not a complete representation of all deals and dollars.

Last week, SSTI highlighted research from PricewaterhouseCoopers (PWC) and CB Insights' 2018 MoneyTree Report. Due to methodological differences between the two reports, topline numbers differ but the overall trends are largely the same.

To explore this information further, additional data on state-by-state VC activity can be downloaded below.

 

venture capitalFile Useful Stats 012419.xlsx