Are Top Venture Firms Making More Bets Outside of California?

In March we examined the venture capital power law to understand the distribution of exits in VC across the 100 largest exits in tech.  We also identified the VC investors who had invested in the greatest # of these 100 companies.  They can be seen below.

Of these top investors, we wanted to see where they were investing from a geography perspective.  Specifically, we wanted to look at their investments in the three major US venture hubs (California, NY and Massachusetts) versus other regions.  While California was unsurprisingly the overwhelming leader, some of the investors, especially some of the more later-stage or growth equity firms, have looked outside the main venture hubs.  Others such as Sequoia Capital and Benchmark Capital are sticking to California.

VCs Focused On California & Major Markets

Just under half of the investors (7 of 15) do over 75% or more of their deals in California. While other investors on the list have substantial figures for other markets outside of NY, MA, and CA, Sequoia Capital, Andreessen Horowitz, and DAG Ventures are incredibly focused on the major markets, which account for 91%, 90%, and 89% of their investments respectively.

New York

When looking at investments in New York, Battery Ventures, Accel Partners, Bessemer Venture Partners, and Institutional Venture Partners led the pack with between 15-16% of their investments taking place in the Big Apple.

The Bay State

Massachusetts-based investments did not account for more than 17% of any of the Power Law investor’s portfolios. Technology Crossover Ventures led the way with the aforementioned 17%, with Bessemer Venture Partners (11%) and Battery Ventures (9%) placing 2^nd and 3^rd for investment in the state.

Technology Crossover Ventures Diversifies Geographically

The funds least-heavily invested in California were Technology Crossover Ventures, Battery Ventures, and Insight Venture Partners, all with under half of their investments being sourced out of the Golden State. While TCV was the most-heavily invested in Massachusetts, they also invested in other regions outside of CA, MA, and NY more than any other investor on the list, with almost half of their deals coming from outside of the major tech markets in the US. The most recent non-major market deal was last week’s $42M Series E deal for Act-On Software, an Oregon-based marketing automation software company, while previous years saw investments in TOA Technologies, based in Ohio, as well as Alarm.com (Virginia), and iPipeline (Pennsylvania).