Follow the Money: Where to Find VC Dollars (Map)
The close of each quarter signals a nationwide scramble for funding data on private companies as people across the United States anticipate the reveal of market insights from the end of the quarter to direct their future investments. Information based on the three preceding months is used to determine the performance of investors in the U.S. to offer the most up-to-date overview of the technology investment landscape. This abundance of statistics is especially useful to businesses in search of venture capital. Given that fewer VC-backed tech startups are going public, it is important to find venture capitalists that have a history of investing in companies whose missions align with yours. Whether your end goal is to exit, to be acquired, or to have enough financial support to launch, you should know where to find the VC dollars you need.
State of Venture Capital
While VC activity has slowed in the U.S., this does not mean that 2015 will be a slow year for capital investments. Pitchbook, the data and technology provider for the global private equity and venture capital markets, reported that $36.8 billion has already been invested in U.S. startups in 2015, nearly as much as all of 2012 ($38.2 billion). At this rate, investment in 2015 could surpass the $65.2 billion invested last year.
VC investment was big during the second quarter of 2015. Angel or seed investments, along with early-stage investing, experienced post-2000 records when it came to value — $7.1 billion for early-stage investing alone. To put that number into perspective, early-stage investing hit a high of $5.4 billion during the second quarter of 2014. An influx of late-stage capital in the first half of 2015, however, has led to a decrease in VC-backed tech startups ringing the bell at NASDAQ.
“The number of VC-backed tech startups going public has been on the decline since 2Q 2014, dropping from 83 that quarter to 38 in 2Q 2015,” wrote George Gaprindashvilli of Pitchbook. “A big factor driving this trend is the rise of late-stage financings, which have accounted for a larger portion of the total VC deal flow in 2Q (nearly 17%) than any quarter since 4Q 2012.”
Gaprindashvilli noted that IPO delays are likely a result of “private IPOs,” which he defined as major rounds for companies that would have historically led them to go public.
“But at some point, this private value creation will have to be substantiated with strong exits,” he wrote. “That is something these late-stage investors (and their LPs) are banking on.”
Acquiring the Investment You Need
Now that you understand the state of VC today, you are probably trying to determine the best way to locate the top U.S. investors to talk to about your own up-and-coming business. MBA@UNC has made your search easier with the map below. MBA@UNC used CrunchBase’s Investor Leaderboard data to create a visualization of current VC hot spots in the United States.
Explore the map to find out which cities are home to the venture capitalists investing the most dollars. You may discover that the VC you need is right around the corner.
*All map data was last updated on August 7, 2015. Click on each briefcase icon to learn more about the venture capitalists featured across the United States.