Under-Ventured But Still Growing

Earlier this month the MoneyTree Report, detailing annual 2012 venture capital investment, was released showing VCs invested $26.5 billion in 3,698 deals last year, a decrease of 10 percent in dollars and a 6 percent decline in deals over the prior year.

Here at Chrysalis we invest in a very large geography – a geography under-ventured by other institutional investors…the Midwest, South and Texas.  This region is often overlooked as a hub of startups, overshadowed by Silicon Valley on one coast and New York City and Boston on the other.  As venture investors in middle America for nearly 20 years, we continue to see the vibrant innovation ecosystem between the coasts.  It certainly doesn’t rival Silicon Valley, New York, nor Boston for the number of startups nor venture capital funding, but it is growing and continues to be a strong source of innovation for our country.

In looking at the growing innovation ecosystem, we focus on the number of companies attracting the attention of investors, as opposed to the amount of capital invested.  As geography plays a less-significant role when building a company, due to technology, companies are growing here and staying here.

The final column in the chart below shows venture-backed companies in middle america make up about 18 percent of national startups receiving venture investment.  As venture investors who partner with companies that provide long term, consistent growth, this geography is a good place to be.

VC Investment in the Midwest, South & Texas

Next post: We’ll take a look at some data to determine if venture capitalists located in the Midwest, South and Texas can support these startups.  Check back!