In our most recent quarterly venture capital report for Q3 2010, Texas overtook NY as the #3 spot for venture capital funding. We didn’t talk about this change in rankings in our report because Texas which has healthcare and green tech companies can jump in the funding league tables quite dramatically with a large deal or two while NY is largely a small deal, internet focused state (and is also largely concentrated in NYC). Their venture capital profiles are drastically different suffice it to say.
But for anyone who reviews the five pages (starts on page 54) we dedicate to Texas in our report, you will see that the Lone Star state is doing well in the venture capital deals and dollars landscape. It doesn’t get the attention of California, Massachusetts or New York, but here are some highlights as gleaned from our Q3 VC report.
Diverse Industry Coverage
The state has deals across a number of sector / industry categories and none consistently dominates. Things invariably ebb & flow in venture capital and this diversity and balance may serve Texas well when one sector heats up or slows down. The five quarter trend illustrates this.
Healthy Early Stage Investment
The deals by stage of investment show that the % of Series A deals has grown over the last 4 quarters. Seed venture deals which are all the rage have also grown significantly in the last two quarters. This early stage activity portends good things for Texas. The healthy levels of Series A deals also suggests that many of the seed VC deals which may need follow-on capital down the road may be able to find it close to home. (avoiding the orphan phenomena others have spoken of)