Venture capitalists and angel investors are not the only ones engaged in investing in early-stage companies. To spur entrepreneurship, CB Insights also track state-run innovation grant programs which are ‘investing’ in early-stage, scalable companies. The investment from these state-run programs comes in the form of grants primarily since the goals for these state-driven programs is job creation and local economic development versus equity investment returns.
Over the last five quarters, the following five states have done the most investments in early-stage, scalable innovative companies:
Interestingly, with the exception of Texas (for which Austin is a venture capital hub), four of these states are not amongst the usual suspects when discussing venture capital or angel investment funding statistics. Pennsylvania exhibits venture capital strength on occasion but for the most part, Pennsylvania along with Maine, Ohio and Michigan have not figured prominently (or at all) in the venture capital league tables. Given the dearth of angel and venture funding in these markets, one interesting question is whether the companies funded by these state-driven programs remain in the state if and when the time comes for them to attract follow-on financing.
For venture capitalists and angel investors, these state driven funding programs and the companies represent a source for promising entrepreneurs and companies. Login to CB Insights to learn about these state-driven entrepreneur investment programs.