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Rd presentation

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  • Title Slide
  • Intro slide with table of the three top venture capital markets We’re in the middle of an exciting time right here in our home of Southern California Venture capital in the U.S. is most closely tied with technology start-ups and technology innovation And historically, venture capital has been tied with two major regions, Silicon Valley and Boston/New England Here, you can see how much of the funding is flowing into these regions. (So Cal just surpassed New York in 2009)
  • Here you can see the growth in Silicon Valley since 2000, and the plateau of venture dollars to Boston. But So Cal is seeing a much faster rate of growth here, in fact it is the fastest growth rate out of all regions in the U.S. Something exciting is happening here in Southern California. So, what is driving this growth? Can we expect the same pattern as Silicon Valley, or the plateau of New England? To answer this we look at some determinants of VC growth
  • Highlight the determinants Although overall growth is up in So Cal, is it’s nature/behavior the same as Silicon Valley, can we expect the same kind of growth here as Silicon Valley?
  • The overview of the data source
  • Why is the average deal size is larger in silicon valley
  • Distribution of venture deals is very different. There is a higher percentage of deals happening with earlier stage companies, and angel rounds of funding in So. Cal To make sure, let’s look at the distribution of venture dollars
  • Nearly 20% of Silicon Valley dollars went to a small percentage of companies. As opposed to So. Cal where you see the dollars are being spread around in early stage and expansion stage companies.
  • Transcript

    • 1. By: Bree Nguyen Faculty Mentor: Dr. Tayyeb Shabbir
    • 2. Source: Thomson Reuters/PricewaterhouseCoopers Region 2010 Silicon Valley $8,513,442,800 39.0% Boston/New England $2,537,238,000 11.6% Southern California $2,431,050,700 11.1% Total $21,823,380,100
    • 3. Source: Thomson Reuters/PricewaterhouseCoopers 2000 2010 % Change Silicon Valley 32.2% 39.0% 21.1% Boston/ New England 11.4% 11.6% 2.13% Southern California 8.6% 11.1% 29.9%
    • 4.
      • Mason, Colin (University of Strathclyde, Scotland). “Venture Capital: A Geographical Perspective.” Handbook of Research on Venture Capital . 2009.
      • Horvath, Michael (Dartmouth University). “Imitating Silicon Valley: Regional Comparisons of Innovation Activity Based on Venture Capital Flows.” Building High-Tech Clusters . 2004.
      • Supply-side
        • # of Venture Firms
        • Venture Flows ($)
      • Demand-side
        • University R&D
        • Entrepreneurs
        • Labor
        • Policy
    • 5.
      • Southern California is experiencing growth in Venture Capital flows similar to Silicon Valley, but the nature of this growth is different.
    • 6.
      • Source: socalTECH venture deal database
      • Includes:
        • Deal data across all stages of funding:
          • Early stage
          • Growth
          • Large Fund
    • 7.
      • Methodology:
        • 1 st round deals in a given year
        • Identified stages of funding
        • Normalized data by taking percentage of the total
        • Recognized growth rate given percentage gains
    • 8. Source: socalTECH Venture Database 2010 # Of Deals Average Deal Size Silicon Valley 1204 $6.93m Southern California 451 $4.87m
    • 9. Distribution of Venture Deals Source: socalTECH Venture Database Seed/Early $0-1.5m Expansion $1-10m $10-50m $50m+ Silicon Valley 40.2% 41.9% 16.4% 1.5% Southern California 43.0% 44.8% 11.8% 0.4%
    • 10. Distribution of Venture Dollars Source: socalTECH Venture Database
    • 11. Growth of Early Stage Funding Source: socalTECH Venture Database Early stage funding in Southern California of total funding
    • 12.
      • Similar patterns to Silicon Valley
      • Unique makeup in Southern California
        • Unique outlook using early stage/angel deal data that is typically hard to aggregate
      • Early stage venture capital is active in Southern California
      The New Silicon Valley?
    • 13.
      • Isolate Early-stage Venture Capital growth determinants
      • How does Early-stage growth affect future growth?
      • Demand-Side determinants
    • 14.
      • Download this presentation and follow ongoing research at: www.onetwobree.com/research