Northern California is the Big Player When it Comes to VC
Although States like to put the marketing spin on their Biotech Jobs activity, there is still one major hub when it comes to Biotechnology - Northern California.
San Francisco, Mountain View, Palo Alto, Santa Clara and other cities are home to many young Biotech firms that are raking in the angel and venture capital investments. In 2006, according to a CONNECT and San Diego Institute for Policy Research study, Northern California pulled in 36% of the Nation’s VC in 2006 and 2007 ($9.6 billion and $11 billion, respectively). In the first 6 months of 2008, “Nor Cal” took 41% of the venture capital raised ($5.6 billion) in the US.
It is interesting to note that, despite massive amounts of venture capital, the ratio of life science start ups in Northern California is much smaller than San Diego/Southern California. When it comes to start ups, San Francisco sees a whopping 90% of its new tech firm activity in communications, software and computers/electronics.
So, where is all this VC going if not to biotech start ups? The answer is found in investing strategy. The vast majority of US venture capital, in fact 78%, went to companies in expansion stage or later. It seems, although considered a sexy investment, seed round and early stage companies garner much less attention and money from the investment community.
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