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New York Ranks Third in Venture Capital Deals

Friday, January 20, 2012

25 Jan: UPDATE:  Mr. Mayor! It turns out you can say New York beat Boston when it comes to companies raising venture capital funds. 

But again, it’s not quite that simple. You kind of have to pick one set of numbers and ignore another.

The National Venture Capital Association has broken out the deals, companies and equity invested for 2011 for specific metro areas. It found that 321 NYC companies brought in $2.74 billion compared to 277 Boston companies that brought in $2.69 billion. 

But if you choose to use the Dow Jones VentureSource numbers, then Boston beat New York.

The new details from the NVCA do highlight the different types of industries getting funding in the cities. The top two industries in New York that received funding were media and entertainment ($591 million) and software ($578 million).  In Boston, the lion’s share went to biotechnology firms ($1.05 billion).

 

20 Jan: Memo to Mayor Michael Bloomberg: There’s good news and bad news when it comes to this "competition" between New York and Boston over which city is raising more venture capital money.

Let’s start with the good. 

Last year was a great one for New York City companies raising VC funds.  According to the Dow Jones VentureSource report released Friday morning, 367 deals in the metro area raised $3 billion for companies in 2011. That’s the largest amount since 2000. 

In another report also released this morning, the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association using data from Thomson Reuters, (that’s a mouthful), counted 289 deals bringing in $2.7 billion.  That’s an increase of 38 percent from 2010. 

Not bad.

But now the bad news. 

You can’t really say “We beat Boston” anymore.  The same reports indicate that firms in the Boston metro area raised $3.4 billion (Dow Jones VentureSource) or $3.2 billion (MoneyTree Report).  Whatever number you use, Boston did better than New York.

And don’t even ask about Silicon Valley. Add New York and Boston funds together in either report and you get about half of what tech companies in the Bay Area brought in last year.

Sure, in one report, New York firms did more deals than Boston last year, but not in the other.  Sot that's a draw at best.

What’s going on? Part of it is the inherent difference between start-ups here and Beantown. There are a lot of biotech and healthcare companies in the Boston area and they often need more money to get off the ground: think big labs and clinical trials and expensive chemicals. 

In NYC, think more artsy, more Brooklynites working in publishing and media and content development.  According to Dow Jones VentureSource, a lot of the money raised in the Big Apple goes to enterprise technologies and consumer web companies. 

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