Market Share

The National Venture Capital Association (NVCA) and PricewaterhouseCoopers (PWC) Moneytree put out some data at the beginning of the 2014. It looked at venture dollars and deals by year by state.

numbers

With some simple division I was able to figure out that between 2008 and 2013 New York went from 5 percent of total venture capital deployed in the US to nearly 10%. That is a 5-year CAGR of 13.5 percent and a net dollar increase of 89 percent.

As I look around at New York, I’m not surprised at these growth numbers. Certainly the development of the NY ecosystem bears that out. And by the way, I’ve seen numbers that are a little higher in other studies, but not much, so I believe this in general.

All at once I’m disappointed and enthused. I’m disappointed that with all the work, development, press and hoopla, when the rubber meets the road NY is only 10%. Maybe I’m deluded, but it just feels like it should be more. After all NY is growing twice as fast as the rest of the country in terms of both deals and dollars deployed. I’m enthused because, hey, NY is only 10%. With all the cool things that are going on here in terms of talent development, capital access, municipal support, it would not surprise me if NY went from 10% to 20% of US VC dollars deployed (a double) in the next 8 or 10 years. How great would that be?

Now, I realize that venture is cyclical and we have been enjoying a pretty nice little run, for the last couple years. The tide will inevitably go out. As I have mentioned, in other posts – NY is much better equipped to handle that then in past down cycles. And whereas many other up and coming ‘innovation centers’ might not be as well prepared (or have the critical mass to endure), the market leaders would take the opportunity to gain market share.