New York’s venture capital scene, compared to California or Massachusetts, is tremendously lopsided in favor of tech, and this trend continued in Q3 2011’s venture capital numbers. In fact, Q3 2011 saw 78% of financing dollars and 85% of deals in NY go to tech-focused industries. To see how different NY’s orientation towards tech is, you need to just compare it to to Massachusetts where 21% of financing dollars and 47% of deals went to tech in Q3 2011. As will be obvious from the numbers, Massachusetts venture capital scene has greater exposure to other areas like energy and healthcare.
The data comparing Massachusetts to New York on its venture capital totals in Q3 2011 is provided below.
While we know of some noteworthy efforts to diversify NY’s early stage ecosystem presumably because its reliance on a single sector is viewed as a negative, we wonder if there are folks out there who think NY “going all in” on tech is actually a good thing? If you believe Marc Andreessen’s hypothesis that “software is eating the world”, has NY through luck, wisdom and/or by factors out of its control, chosen/been chosen to ride the biggest and fastest wave in VC land for the foreseeable future which means good things? And if that is the case, does diversifying still make sense?
We hope you will leave your comments and perspectives on NY’s need (or not) to diversify it’s venture capital investment sectors in the comments.