With Facebook’s impending IPO and the resulting number of employee millionaires it will mint, there is every reason to believe that this is just the beginning of a lot more venture funding to Facebook alumni.  As happened with Google, VCs will be keen to to build relationships and fund Facebook staff (especially engineers) if said engineers decide to scratch their entrepreneurial itch and found a startup.

Of course, some VCs haven’t waited to build those relationships.  The investors that have been most active funding Facebook Mafia companies to-date are also given below with the number of companies they’ve funded.  Interestingly, the group of Facebook Mafia financiers has been quite diverse as CB Insights data identified 67 different investors who’ve invested in at least one Facebook Mafia company.  Only the 6 venture capital firms who have invested in 2 or more Facebook alumni companies are given below.

Please note that this data is part of an upcoming report that will look at the financing data, results and impact of the Paypal, Google and Facebook Mafias. You can sign up below to receive the free report.

Most active venture capital investors in Facebook Mafia companies so far:

• Greylock – 3 companies
• Benchmark Capital – 2 companies
• First Round Capital – 2 companies
• Index Ventures – 2 companies
• Redpoint Ventures – 2 companies
• SV Angel – 2 companies

The report was done by our Green Tech Insights‘ team, a new offering we’ll be launching soon focused specifically on all things green tech.  You can sign up for early access to Green Tech Insights here.

To get the MIT Clean Energy Prize report, just login to CB Insights here (or set up a free account here) and visit the Research tab where you can download it for free.  To search for MIT Clean Energy Prize participating companies, just go to advanced search and search for the MIT Clean Energy Prize label.  (two screenshots below to illustrate)

A couple of the diagrams Shai put together are embedded below but go check out his post here for his complete thoughts and rationale for conducting this analysis.

Although this represents a 22% decline in funding from Q4 2012, we do not think that a single quarter dip in funding is in any way symptomatic of any sort of correction or any sort of bubble bursting.  Deal activity which we view as a better gauge of investor sentiment remains strong.  The funding dip is primarily the result of fewer VC mega deals in the quarter which as the quarter illustrates can and do move numbers significantly up when present and down wildly when absent.

VCs Continue to Plant Their Seeds

Seed investing hit a historical high with almost 1 of every 5 VC deals being an early stage seed VC investment.  These “call options” as we’ve referred to them in the past allow venture investors to invest minimal amounts in companies (primarily tech) and get first access to invest in these companies should they show signs of going from seed to something more substantial.

On the flipside, if the seed investment doesn’t work out, the firm has put little capital at risk.  Increased capital efficiency in tech has made these types of seed investments increasingly popular and Q1 2012 starkly demonstrated this with 19% of deals being of the seed variety.

The “Instagram Effect”?

For the first time, we’ve broken out mobile & telecom investment trends in this report – what we’re calling our own little “Instagram Effect”.  While mobile deal volume remained strong, funding dipped in Q1’12.  Like most tech investment sectors, VCs are favoring small seed investments in the mobile sector.  And since the Instagram acquisition by Facebook was announced when Q1’12 was already in the books, we expect that the coming quarters will be interesting for the mobile sector as companies and investors try even more aggressively to ride the mobile wave.

Green Tech Sputters

With no mega deals and continued uncertain sentiment green tech saw its lowest level of deals and funding in the last five quarters.  Will something help Green Tech shake its malaise in the coming quarters?

Internet Deals Climb on Back of Seed Deals

While internet funding fell 17%, deal volume grew 16% with a five quarter high for seed VC deals.

Healthcare’s Flu Like Symptoms Continue

After a strong Q4’11, VC funding to healthcare hit a five quarter low while deals stayed within their recent range.  The sentiment and chatter around healthcare continues to be mixed and so the sector will remain range-bound unless some catalyst, i.e., massive exit, regulatory change, etc. can spur it to move.

NY Hits Five Quarter Funding Low.  Uh Oh?

New York funding dipped but the state’s deal activity stayed strong so we don’t think the decline is a problem (yet).  NY remains a hub for early stage investment with 30% of deals in the seed stage and another 30%+ in the Series A stage.

Massachusetts Sees Five Quarter Low on Deals & Dollars

Unlike NY, Mass fell on both deals and dollars.  The gap vs. NY on the tech front also seems to worsen for Mass although the state continues to have a more balanced attack with healthcare and green tech.  If, however, there is a coming wave of internet & mobile opportunities, is Mass not positioned to capitalize on these opportunities?

Washington  Bucks National Trend – Funding Climbs

While national VC funding fell 22%, Washington actually climbed 41% making it the only major VC recipient to register an increase in funding.

California Leads but Sees Big Funding Dip.

Cali funding dips 26% vs. Q4’11, but still leads the pack.

 

Q1 2012 Venture Capital Report –

The histogram below shows the valuation distribution of these firms followed by the data table should you want to dig into the distribution of data on your own.

Some quick stats:

• 20% of these companies have a $1B+ valuation.
• There are another 85 companies that we estimate based on financing received (and sentiment – coming soon) that are above the $100M valuation range in tech which suggests 150 companies in the $100M+ category.
• Of tech deals over this period from Jan 2011 to Feb 2012, these 150 companies are representative of about 4.5% of tech companies that were funded.

To view the video, click here or the image below.

]]> http://www.cbinsights.com/blog/cb-insights-updates/introducing-cb-insights-super-simple-crm-basic-efficient-like-honda-civic/feed 0 http://www.cbinsights.com/blog/venture-capital/new-york-california-venture-capital-tech http://www.cbinsights.com/blog/venture-capital/new-york-california-venture-capital-tech#comments Wed, 07 Mar 2012 22:29:39 +0000 CB Insights http://www.cbinsights.com/blog/?p=1942 It’s well established that New York’s tech venture capital scene has trumped Massachusetts, but with all of the data highlighting NY’s VC prominence, we are sometimes asked whether NYC is poised to take over the VC title from reigning champion California.  To satisfy your curiosity with some good hard data, we put this chart together to highlight where each of the state’s stack up against one another.  As they say, a picture is worth a thousand words.

Although New York is the new Tech VC king of the East, California is still several orders of magnitude ahead of NY.  In the most recently concluded quarter, Q4 2011, California had 3.4x the number of tech deals to New York and pulled in 4.8x the amount of venture funding.

Interestingly, in Q4’09, California’s deal count was 6.1x NY and it’s funding was 9.8x the Empire State.  So although NY still is several orders of magnitude behind California, it’s relatively newfound venture capital prominence has allowed it to make up significant ground in the last two years.  Nevertheless, it’s safe to say that for the foreseeable future, California’s reign atop VC land will continue.

The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights today announced findings from the first Halo Report, a collaborative effort to raise awareness of early stage investment activities by angel investment groups.  The research series highlights angel investment activity and trends in North America and provides much sought after data that has not been previously available to entrepreneurs or early stage investors.

Note: infographic is first followed by press release and then followed by the HALO report

Halo Report Highlights:

• Angel groups are active throughout the U.S. in 2011
  • California leads in deals and dollars among individual states
  • 79% of angel group investments were in companies outside of California
  • 70% of total funding was invested outside of California
  • Median angel group rounds size grew to $700,000, an increase of 40% over 2010
  • 58% of angel group investments were in healthcare and internet companies
    • 60% of healthcare investments were in medical device and equipment companies
    • The most active angel groups were Tech Coast Angels, Band of Angels, Golden Seeds, Central Texas Angel Network and Launchpad Venture Group

Angel investors, those who invest their own funds and expertise directly into startup companies, appear to be taking on an increasingly important role in driving entrepreneurship throughout the United States.  Their investments are in startups and young companies, which have been cited by the Kauffman Foundation as the key source of net new jobs in the country.  Nationwide, these angel group investments have  opened up new opportunities for centers of innovation and entrepreneurship.  The Halo Report found that many deals are syndicated among investors.  As a result, companies needing larger investments have access to the additional capital they need to grow their businesses.

“The Halo Report is the first of its kind to systematically track investment and company formation at the earliest stage, providing a window into the future of innovation,” according to Allan May, Chairman of ARI. “Startup companies fuel economic growth and job creation and are the drivers of future U.S. competitiveness. This research is an important step in the promotion of startup investing, providing accurate data to help entrepreneurs, policy makers, and the public at large understand who angel investors are, how they operate, what their results are, and how angel investment impacts the economy.”

According to Greg Becker, President and CEO of Silicon Valley Bank, “Entrepreneurs and the investors who take a chance on them are fundamental to the innovation economy. By shedding more light on angel investment activity we’re helping young companies identify sources of capital and mentorship, ultimately leading to the development of innovative products and the next generation of exciting new companies.”

CB Insights CEO and Co-founder, Anand Sanwal, said, “In partnership with ARI and SVB,  we are happy to be part of an effort that highlights and brings a data-driven perspective to what is a very important, but historically opaque, part of our innovation economy.  We’re looking forward to seeing how investors and corporations use this data to understand emerging early-stage trends and to identify investment and M&A opportunities.”   CB Insights specializes in providing data on high growth private companies and their investors and acquirers.

The Halo Report includes aggregate analysis of investment activity by angels and angel groups and highlights trends in round sizes, location and industry preferences. The data is collected via survey and aggregation of public data using CB Insights innovative data analyses. The 2011 Halo Report data is based on 573 deals totaling $873.3 million dollars invested.   The transaction details are available in the CB Insights subscription database for users to review and analyze themselves.  Academics may also access some of the data through ARI.

As the graph below shows pretty clearly, not only is NY winning on the tech venture capital front, but the trend actually appears to have gained steam since we last ran the numbers in Q4’10.  While Massachusetts’ tech scene has gone sideways over the last 9 quarters, NY has shown growth.  And this occurred against a backdrop of a record year for venture capital investing in 2011 suggesting that a rising tide in this case did not lift all ships.  Of course, it is important to note that when considering aggregate venture capital deals and dollars which would include life sciences and energy/green tech in addition to tech, Massachusetts continues to be the winner.

For those in Beantown, is ceding this much tech VC ground to NYC a cause for concern or just part of the mostly good-natured but heated rivalry between NY and Boston? Given Mike Bloomberg tweeted about our stats the first time we issued them, it seems to be something NYC takes pride in at the highest levels.

RT @NYCMayorsOffice: NYC has surpassed Boston in #venturecapital volume for Internet tech #startups. http://bit.ly/9E1bpP

— Mike Bloomberg (@MikeBloomberg) October 15, 2010

San Francisco suffered a similar fate at the hands of the Giants this football post-season as well. But the west coast needn’t worry quite yet. NY’s dominance of their left coast brethren will have to be limited to football and not venture investing for the foreseeable future.