California Again Leads in Venture Capital Investments (by a country mile)

In 2011, California scooped up more than half of the entire nation’s venture-backed invest­ment—for the fourth consecutive year.  National venture capital investment exceeded $28 billion in 2011, up 22 percent from 2010—the third highest amount in the past 10 years, according to the latest report by PricewaterhouseCoopers LLP and the National Venture Capital Association.   California ventures received $14.5 billion, a 24 percent jump from 2010.  The Silicon Valley received the lion’s share, $11.6 billion, rising 27 percent from 2010.

Given the nature of investment patterns in 2011, it is easy to understand why California was the far-and-away leader.  Investment growth was lead by software and biotechnology.  Investment in software companies, the largest single sector, reached $6.7 billion in 2011, a 38% increase from 2010.  The next largest investment sector was biotechnology which increased 22% in 2011, totaling $4.7 billion.

There was also strong growth in two other California specialties, Clean Technology and ‘Internet-specific.’  The latter includes companies in various industry categories that are essentially dependent on the Internet. Venture capital investment in these enterprises totaled nearly $7 billion in 2011.  Not only was this the greatest level of internet investment in the past 10 years, but was a 68 percent surge from the $4 billion invested in 2010.

Clean Technology venture capital investments in 2011 were the largest on record.   These ventures include alternative energy, pollution and recycling, power supplies and conservation ventures.  Clean Technology investments grew 12% from 2010, reaching $4.3 billion.

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