Map Your Chance of Venture Capital Success

The National Venture Capital Association released a report today touting both the influence venture capital had on the nation’s employment last year — 11 percent of all jobs — as well as the money generated by VC-backed companies, which totaled roughly $2.9 trillion. It also released a map showing where venture money has flowed over the last 28 years. Basically Silicon Valley has raised three times more capital — $150.2 billion — than the geographic area that’s raised the second-largest amount, New England, at $55.2 billion.

vcmapdealsThat map is based on investment in more than 27,000 companies, but before decamping for the Valley, ask yourself if your business really needs venture capital. Both the move West and giving up equity to a VC firm are expensive propositions.  Sure, there are a ton of great resources in Silicon Valley, but all the capital that’s been invested in companies there has also contributed to the region’s insanely high cost of living. Of course to be fair, the success of those investments has played a huge role as well.

While in the last 10 years or so, venture firms have cast wider nets — investing more in places like Colorado, Texas and the Southeast — that may change as the overall dollars going into venture capital shrink. I’m wondering if there will be a retrenchment back to the Valley. I know that in Austin, as the local VC firms falter and the major player turns more toward private equity deals, I’ve already seen the amount of VC dollars going to local companies decline.

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