Venture activity still focused on nation’s top investment hubs

The venture hubs of California, New York and Massachusetts have continued to attract the lion’s share of the nation’s venture capital activity this year, despite efforts to diversify capital deployment across the country.

The three regions accounted for three-quarters of the venture capital invested in the second quarter, a share that is unchanged from the same quarter a year ago, according to data from Dow Jones VentureSource. For the first six months of 2019, the percentage of capital targeting these hubs is even higher, at 79 percent.

The same dynamics hold true for deal flow. This year’s second quarter saw 63.6 percent of deals completed in the three states, according to VentureSource. This was up just a hair from 62 percent in Q2 a year-ago.

And it’s not just that capital remains focused on these venture hubs, in part because of escalating round size, but that investors continue to be comfortable with the opportunities offered and the high prices.

Still, several outside regions showed good growth in this year’s second quarter. While California saw capital grow 7 percent from a year ago, investments in Florida were up 175 percent. Illinois saw 67 percent increase, Ohio was up 54 percent, Pennsylvania up 67 percent, Utah up 20 percent and Colorado saw 13 percent gain.

Meanwhile, Revolution has set out to raise a $150 million second Rise of the Rest seed fund, according to a recent regulatory filing. The fund’s goal is to invest in companies beyond Silicon Valley, Boston and New York where venture capital is less available.