VENTURE CAPITAL FINANCING
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Why is this important?
New venture capital investment is an indicator of innovation and dynamism within the economy. Venture capitalists generally seek to invest in new enterprises that have a potential for strong growth. Typically, only firms with potential for exceptionally high rates of growth over a 5- to 10- year period will attract venture capital. Thus, a high rate of venture capitalist investment suggests a changing and dynamic economy with relatively new enterprises entering the scene. A lower rate of venture capitalist investment suggests a less dynamic mix of economic enterprises in the regional economy.
How are we doing?
Since 2002, venture capitalist investment in Long Island firms has ranged between $18 million and $43 million. As a percentage of total venture capital investment in U.S. firms, there was a slight increase over the three years prior to 2007(from .08% to .17% of total U.S. investment). Between 1997 and 2006, Long Island has averaged about 6.25% of all venture capital investment in New York State.
The four industries receiving the largest investments are Telecommunications, Industrial/Energy, Media and Entertainment, Software.
In comparison to other regions, Long Island receives a relatively small portion of venture capital investment. Two top recipients were Silicon Valley (27% in 2006) and Boston (10.2% in 2006). Other regions received significantly less in 2006: Denver 2.4%, Philadelphia 2.3%, Minneapolis 1.2%, Pittsburgh 0.9%.