Just yesterday, I heard from a Seattle entrepreneur who said he was moving his startup company to San Francisco. It’s not a surprise that the San Francisco Bay Area has an allure for startups, especially given the latest findings from PitchBook.
The San Francisco Bay Area increased its share of venture capital financings during the third quarter — accounting for 32 percent of all deals and 43 percent of all dollars. That’s up from 30 percent and 42 percent, respectively in the second quarter.
In total, PitchBook found that VCs invested $7.3 billion in 854 deals during the third quarter — the same amount of money as the third quarter of last year but a decline in deals from 1,016.
Of course, it takes more than money to get a company off the ground (smart people, strong infrastructure and a culture attuned to entrepreneurship also help). But a little (or a lot of) cash can provide the rocket fuel to get companies to the next level. And, for the most part, VCs tend to stick close to their own neighborhoods when doing new investments, as the recent numbers from PitchBook indicate.
That’s why it’s so important for Seattle’s venture capital community — which has seen the disappearance of firms such as OVP and Frazier Technology Ventures — to thrive.
Seattle’s share of the VC pie came in at 1.8 percent of capital invested and 3.6 percent of deals. New York was second behind the San Francisco Bay Area, with 11.1 percent of deals. They were followed by L.A. (5.5 percent) and Boston (4.8 percent).
While the Bay Area increased its share of venture financings over the last few quarters, four other startup hotspots—Seattle, New York, Los Angeles and Austin—have seen their share of VC deals remain fairly steady. Granted, they all had fluctuations from quarter to quarter, but Seattle, for instance, has never comprised less than 2.9% or more than 3.7% of VC deals in the last two years. For New York, it was 9.2% and 11.5%.
Here’s a closer look at what’s going on in Seattle courtesy of PitchBook, which happens to be based in the Emerald City.
