Richard Florida has a new piece over at City Lab analyzing recent data on venture capital from Pitchbook. The conclusion is that venture capital funding is hyper-concentrated, and getting even more so:
The Bay Area—that is, San Francisco and Silicon Valley—currently accounts for nearly 45 percent of total venture capital investment in the entire United States. And the Acela Corridor, spanning Boston, New York, and Washington, comprises another third. Together, these two geographic regions attract nearly three-quarters of America’s venture capital investment. And, just the five leading metros account for more than 80 percent of total venture capital investment and 85 percent of its growth over the past decade. That’s spatial inequality on steroids.
|Metro||VC Investment 2017 (millions)||Share of U.S. Total 2017|
It looks like the big four: the Bay Area, New York, Boston, and LA, completely dominate the charts. This confirms some previous analysis Florida had posted.
The increase in venture capital in America over the previous decade was also extremely concentrated in these cities. SF accounted for 40.1% of the national growth and New York 20.1%. The biggest market outside of the big four is Chicago, which only accounted for 2.8% of national growth.
Click through to read the whole thing.