February 14, 2014

Powered by strong growth in the Internet and Software sectors, U.S. venture capital activity grew by about 7.5 percent in 2013, according to new data from the National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC) Moneytree survey. Both venture dollars and deals ticked up last year, bouncing back to 2011 levels after a slow 2012. For the nation and most states, investment seems to have returned to its pre-crisis level.

Last year, almost $29.4 billion was invested in 3,995 deals, according to the NVCA/PWC data. These levels indicate a modest increase over a weak 2012, but about equal to 2011 activity.

Over the past five years the venture capital industry has been in a rebuilding mode. When the global economy collapsed in 2007-08, venture capitalists became cautious, leading to a severe drop in activity beginning in Q4 2008. Venture dollars shrunk by a third in 2009, making equity capital scarce for businesses at all stages of development. Investment rebounded, however, by about $2.9 billion in 2010 and about $6.1 billion in 2011. It now appears that activity has leveled off, with a small tick down in 2012 and a small tick up in 2013. Since 2011, total dollars have been near pre-crisis 2007-08 levels, though deals remain somewhat below pre-crisis levels.

Download the NVCA/PWC release…

SSTI has prepared tables of U.S. venture capital investment levels by state in terms of deals and dollars for the 2008-13 period.

California continues to lead as the country’s top target of both investment deals and dollars. Massachusetts continues to rank second in total dollars, but, for the first time, New York overtook Massachusetts in number of deals. In 2013, New York increased its deal flow by 15.8 percent over the previous year and by more than 50 percent over 2008.

Florida and Virginia both rejoined the top ten after having a slow 2012. In Florida, venture dollars dropped by 42 percent in 2012, but more than doubled last year, making it the 10th most active venture capital economy. Virginia investment dropped by 55 percent in 2012, but rebounded by 117 percent in 2013. Virginia’s recovery, however, appears to be dependent on a small number of high-dollar deals, since its dealflow decreased as total dollars grew.

SSTI will take a closer look at the NVCA/PWC data in the coming weeks, including state share of total U.S. venture capital, per capita investment, investment by industry and investment by stage.


Download the tables in Excel (xlsx) format...