The Consistent 15%: Venture Investment in the Midwest, South & Texas

In January, we wrote about quarterly venture capital investment in Midwest, South and Texas-based companies — regions in which Chrysalis invests.  We discussed these regions often overlooked by institutional investors as  a hub for startups and innovation.  Recently, the MoneyTree Report updated their quarterly venture capital investment data, releasing 1Q 2013 numbers.  1Q data is consistent with the past few years — over 15% of the companies receiving venture investment in 1Q were based in the Midwest, South and Texas.


We caught up with Venture Partner Alan Ying to discuss the data:

Q:  Are you surprised the data for Q1 hasn’t budged much – in terms of the number of companies in these regions being funded and the amount of capital invested?

Alan Ying:  No, not at all.  We continue to see these geographies building lasting companies.  While the numbers don’t compare to investment in Silicon Valley nor Boston, these are consistently strong numbers — at least 15% of the companies receiving venture funding over the past few years are located in these geographies.  Venture investors like to see steady, long-term investment data — a strong source of innovation in this country.

Q:  What will it take to see a significant increase in the number of companies in this region to receive venture funding?

Alan Ying:  Well, there are so many variables VCs take into consideration when deciding to fund a company.  Venture capitalists will FIND innovation — it doesn’t need to be in their backyard.  More and more we’re seeing entrepreneurs build businesses in middle America.  As we discussed in this post, geography will become less and less of an issue to entrepreneurs, venture capitalists and, most importantly, customers.