Useful Stats

Despite a small decrease in venture capital deals last year, the San Francisco-Oakland-Fremont metropolitan area remains the most active investment regions on a per capita basis, according to data from the PricewaterhouseCoopers (PwC)/National Venture Capital Association (NVCA) MoneyTree Report. San Francisco led all other MSAs in both total dollars and per capita activity, with its $21 billion in 2015 investment averaging about $4,500 per metro resident. NVCA notes that 133 metros were home to deals in 2015, an encouraging sign that opportunities are opening up in areas outside of the known hotspots.

San Francisco continues to be the U.S. VC metro by a large margin, but several other areas stand out from the pack. In San Jose- Sunnyvale-Santa Clara, the per capita average was around $3,200 per resident, and in third-ranked Boston, that figure was around $1,200. No other cities achieved per capita average over $1,000, though on a total dollars basis, New York and Los Angeles had similar levels of activity to San Jose and Boston.

Last year, the venture capital investment hit a 15-year high, with total dollars topping every year since 2000. A slow fourth quarter brought the remarkable trajectory of the year back down to earth, but with a total of $11.3 billion invested, 2015 became the second highest year on record since PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) began the Moneytree Report in 1995. Much of this growth was due to larger deals, and, in fact, the total number of deals was down from the previous year. California continues to dominate the market, with California firms receiving 57 percent of all investment. Washington surpassed Texas to join the top five states in terms of venture dollars, and Boston surpassed San Jose to join the top three metropolitan regions.

California-based companies performed about $81.7 billion in research and development (R&D) in 2012, according to the latest data available from the National Science Foundation (NSF). That figure represents about 27 percent of all private R&D funding in the U.S. Not all of that funding, however, derived from the companies themselves. The federal government provided about 9.3 percent of the funds for California-based company R&D in 2012. Companies in New Hampshire and Virginia received the highest percentage of total private R&D funds from the federal government, with 47 percent and 44 percent respectively.

Most U.S. R&D is performed and funded by private companies. The academic sector is the second largest performer of R&D, and the federal government is the second largest funder.

Economic conditions across the country continue to improve, according to the Bureau of Economic Analysis’ (BEA) latest release of gross state product (GSP) data. GSP is derived as the sum of the gross domestic product originating in all the industries in a state. The period between 2008 and 2009, where the U.S. GDP decreased by 2 percent, marked a transition for many states, where their gross state product either decreased from the year before or where their growth rate was subdued. Since then, however, every state has experienced at least a 10 percent increase in gross state product from 2009 to 2014. During this time, the U.S. GDP has increased by 20.8 percent, roughly 3.8 percent per year.

In FY 2013, the federal government obligated $25.9 billion for science and engineering research and development (S&E R&D) at colleges and universities, a decrease of $1.6 billion from FY 2012 (5.7 percent). Eight states (California, New York, Maryland, Pennsylvania, Massachusetts, Texas, North Carolina, and Illinois) each received more than $1 billion in funding during FY 2013, though each state also experienced a decrease from their FY 2012 total. In total, these eight states received $14.1 billion from the federal government for S&E R&D at their colleges and universities, representing 54 percent of the government’s total. This share has remained relatively constant since 2008.

Just 14 states experienced an increase in federal obligations for S&E R&D at universities and colleges from FY 2012 to FY 2013. Four states experienced increases larger than 10 percent over the course of the year: Vermont (19.7 percent), Alaska (13.9 percent), Maine (13.1 percent) and Nevada (11.59 percent). None of these states had a university or college, however, which was in the top 100 for total obligations.

California-based companies received about 56 percent of all U.S. venture capital dollars in 2014, the state's highest share of venture activity since the dot com boom of the early 2000s. Over the past 15 years, investment activity has steadily become more concentrated in California and a few other states. In 2009, about 67 percent of all deals and 74 percent of venture capital dollars flowed to the top five states. By 2014, those states' share of venture dollars grew to 80 percent, according to NVCA/Pricewaterhouse Coopers data. A recent Harvard Business Review article, however, suggests that startups are receiving first-round funding in more metropolitan areas than ever.

The NVCA/PwC data indicate that California's dominance over the U.S. venture capital industry appears to be holding steady, but its high percentage of national venture capital dollars is due to larger deals rather than larger number of funded companies.

Following the massive uptick in venture capital activity last year, California has solidified its place as the epicenter of investment activity, according to data from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA). Since the beginnings of the industry, Silicon Valley has dominated the venture capital landscape. Due to California's large overall population and economy, however, Massachusetts has outperformed the state in terms of per capita investment and venture dollars as a share of state GDP. In 2014, that situation changed, with the continued emergence of Los Angeles, San Diego and Northern California as investment hotspots.

U.S. venture capital investment hit $48.3 billion in 2014, its highest level since 2000, according to data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PwC). Investments jumped 61 percent over the previous year in terms of dollars. Deals were up as well, but by a more modest 4 percent to 4,356 deals in 2014, indicating the growth of deal size and the presence of a number of “megadeals.” NVCA also noted that investments were dispersed throughout the country, with 160 U.S. metros receiving some venture capital.

A few trends drove the large bump in investment dollars last year. In 2009, the venture capital industry hit its lowest point since the 1990s following the Great Recession, according to NVCA/PwC. Since that year, the industry has grown, though investment activity seemed to reach equilibrium in 2011, hovering around $29 million in 4,000 deals through 2013. In 2014, the industry broke out of that equilibrium, with a sharp uptick in investment in the Software and Internet-specific industries. Both industries reached their highest point since the dot com boom in 2000.

In fall 2013, 21 federally funded research and development centers (FFRDCs) in the U.S. employed 2,613 postdoctoral researchers in 2012, down 6.4 percent from the previous year, according to a recently released InfoBrief from the National Science Foundation. Postdocs, who help government agencies meet their research and analytic needs and in turn receive relevant training and experience, are more than 75 percent male and more than 50 percent international, according to the brief. Nearly all (95 percent) of the research performed by FFRDC postdocs is related to science and engineering. For FFRDCs with postdoc programs, most of their funding comes from the Department of Energy, while most of the funding for FFRDCs without postdoc programs comes from the Department of Defense.

A total of $30.8 billion for science and engineering (S&E) was given by federal agencies to 1,073 academic institutions across the United States in FY 2012, according to new research from the National Science Foundation. Although these obligations are 2 percent less than they were the year before, commitments to science and engineering increased more than 9 percent from 2007 to 2012. During that same time, per capita commitments to academic S&E decreased 7 percent. Generally, states clustered on the West Coast and in the Northeast received the most money per capita for S&E at colleges and universities. 

With the hopes of better understanding which policy environments encourage and support innovation, new research  from the C.D. Howe Institute, a Canadian public policy thinktank, examines which sectors and provinces drive Canadian patent intensity. Using a new database on patent applications in Canada, the authors find that inventors from Ontario and Alberta, in addition to inventors in the utilities, construction, and computers and electronics sectors produce a disproportionally large share of Canada’s patents, while inventors from Atlantic Canada or in the pharmaceuticals and medical equipment sectors are not producing a large share of patents. 

Federal funds for science and engineering at American universities grew steadily from 2001 to 2008, jumped in 2009 and 2010 due to the American Reinvestment and Recovery Act (ARRA), and more or less returned to its original trajectory in 2011, according to survey data from the National Science Foundation (NSF). Federal S&E funding in most states followed a similar pattern. A few states, including Minnesota and Delaware, managed to sustain their level of federal S&E support after the Recovery Act funds ceased. In fact, Delaware increased its funding at a higher rate than any other state during the 2001-11 period, becoming the only state to more than double its level of federal support.

NSF’s Federal Science and Engineering Support to Universities, Colleges and Nonprofit Institutions survey tracks more types of university support than other NSF surveys. The data includes federal R&D funding, but also federal support for fellowships, training grants, R&D plant and S&E instruction facilities. The latest release provides updates on FY10 and FY11, with breakdowns by state, funding agency, nature of support and institution.