As venture investing turned more cautious this year, many of the industry’s major hubs saw big drops in capital deployed.
Less trodden regions, however, survived quite well, with more money going to startups. At the top of the list is the Midwest, where dollars going to young companies were up 6 percent through the third quarter.
Also strong this year are Texas, the Southeast and Pennsylvania, according to data from the MoneyTree Report prepared by PricewaterhouseCoopers and based on data from Thomson Reuters.
Overall, venture capital has flowed less abundantly this year. Capital deployed in the first nine months of 2016 was down nearly 19 percent nationally from the 15-year record total of 2015, the MoneyTree Report shows.
In Silicon Valley, the nation’s largest region for investment, dollars deployed were down 22.8 percent. Money going to startups in New York fell 20 percent while the Northwest tumbled 38 percent. The Los Angeles region was off 23 percent, with Massachusetts slipping a less unsettling 10.7 percent.
Across the Midwest, however, the trend points in the opposite direction. Investing in Texas also was up 3.6 percent, followed closely by the 3 percent rise across the Southeast. Spending advanced 2.5 percent in Pennsylvania.
In some of the industry’s major investment hubs, partners are thinking twice about the rich valuations of the past two years. GPs in the less active regions aren’t likely facing the same considerations.
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