Are these numbers about the source (where VCs are located) of capital or destination (where the funding goes)? Many SF startups get funding from Menlo Park but they are still used in SF. Is this counted as SF or Silicon Valley funding?
From the linked article: "Critically, the venture market at the time was tiny relative to today’s ecosystem"
This isn't quite true. At least for US VC investment in dollars. It peaked at $66 billion in 2000, and didn't surpass that amount until 2018, according to these charts:
And if you adjust for inflation, that year 2000 $66B is $103.86B in 2021 dollars, and the 2nd chart shows 2021 getting to $128B.
Now the two different data sources do have somewhat different numbers for each comparable year. I couldn't find a comparison that covered enough years to show the difference. But I think it's pretty clear that the dot com era was a spectacularly fast increase in VC funding. And the more recent years were slower growth, but did end up getting to slightly higher numbers, if you adjust for inflation.
Interesting tidbit: "The San Francisco Bay area continued to hold onto its lead as the top region, accounting for more than half of all VC activity in Q1. That share would have fallen to around 33% of the total without the two large mega deals, however."
SFBA is still the place to produce unicorns (or nowadays, decacorns)?
I've always imagined it was because the VCs bought the buildings they rent out to the startups, and probably the apartments as well. That makes the bay area a big money laundering machine where cash is guaranteed to flow from the investors through the VCs to the startups and back to the VCs again. Cha-ching!
I also wonder where these figures came from: "Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars, and 72 percent of the companies that got VC money over the past 15 or so years."
I see a lot of these types of statistics in articles about startup financing. As far as I know, there's no publicly available database of VC transactions.
Anyone know where these numbers could be coming from?
That number sounds absurd, either in magnitude or definition, so I wouldn't worry about finding it. You probably just misremembered.
In magnitude, total venture capital invested last year in the US was $84 Bn. Just the top two PE firms combined exceed this number[2]. It's not a 1:1 match but gives you order of magnitude. And that's just PE (since VC is a tiny subset of PE): in the broader financial world, even considering the US alone, these numbers are almost invisible. I have friends who started an investment firm about 10 years ago with an AUM almost as large as the sum of the VC funds (not merely amount invested) -- and I don't even know anybody at the huge players.
In definition? Above is simply investment, what about revenues or headcount? In revenues, merely the top 103 of the F500 add up to almost a trillion USD in revenues last year. By contrast Uber's revenue was 37B and AirBNB was only 2.6 (and neither really count as startups). 37B will get on you the F100, but not high. 2.6 does not.
In terms of headcount it's not even close.
It does look exciting from our perspective, since the giants of industry were each startups at one point in time. But they all took years to really move the needle, by which time they didn't look anything like startups.
Quite a lot - especially compared with total VC investment in the US per year: "The U.S. venture ecosystem ended 2020 with more than 10,800 companies across the country receiving venture funding and approximately 1,965 VC firms managing 3,680 venture funds with $548 billion in assets under management"
Raising VC funds outside of greater Bay Area is not only harder, but generally per equity traded, you get less in return. Generally, these cluster investors cluster around an asset-type, industry, jurisdiction, and proximity.
Bay Area startups raised roughly $46 billion in 2019, compared to Europe in sum raising $36 billion; if you’re raising more than $10 million, not attempting to raise funds in the Bay Area is likely poor choice.
Source for the first part: https://venturebeat.com/2018/01/08/vcs-invested-the-most-cap...
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