KUHN CAPITAL Monday, March 19, 2018
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The VC Money Map


While overall VC spend may be hitting post-dotcom highs, the investing activity within specific regions of the country varies widely. That is, some regions defy the maxim that a rising tide lifts all boats.

Data from PricewaterhouseCooper’s quarterly “MoneyTree” survey shows that total VC investments for the first nine months of the last three years have grown at an annual compounded rate of about 11%.

Yet, over that time, the North Central region (MN, IA, WI, ND, SD and NE) saw the sharpest decline of any region, negative growth of 11%. Said another way, the North Central’s share of national VC spending declined from 3% of the total to 1.5%.

Other noteworthy declining neighborhoods were in New England (ME, NH, VT, MA, RI, and CT except for Fairfield County), NY, CO and Philly.

The growth winners were Silicon Valley (increasing its already large lead), DC (war on terror IT), LA/Orange Country (media), the Northwest (Microsofties, etc.), the Southwest (including TX) and the Midwest (with a respectable increase in marketshare from 3.3% of the total to 4.0%).

No single factor explains these differences in regional experience. But we suspect that high tax rates in MN, New England and NY may be part of the answer. We also suspect that the already-established IT and media industries in Silicon Valley, LA and Portland regularly sprout investment opportunities, while their weather doesn’t hurt either.

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