I finally got around to looking at Global Insight’s recently released study, ”Venture Impact: The Ecomonic Importance of Venture Capital Backed Companies to the U.S. Economy.” This one’s great emotional candy for anyone in the business. After all, venture-backed company employees represent 9% of all private sector employees, and employment at venture-backed companies grew at triple the rate of overall domestic growth in the period from 2003 to 2005. Hoo-rah!
I’m not surprised by the above, but what took me aback was data on venture-backed company jobs by state, which prominently figures Georgia and Tennessee amongst other eye-openers. Peek at the following table from the press release:
National Jobs at Venture-Backed Companies in 2005
Top 15 States
Rank Headquarter State U.S. Jobs Growth Rate
2003 - 2005
1 California 2,285,171 2.5%
2 Texas 1,089,123 7.1%
3 Pennsylvania 697,591 14.7%
4 Massachusetts 639,881 1.9%
5 Georgia 604,254 7.3%
6 Tennessee 540,793 1.7%
7 Washington 444,463 8.5%
8 New York 415,661 2.2%
9 Virginia 348,899 .05%
10 Minnesota 302,049 6.0%
11 Florida 301,900 1.6%
12 New Jersey 279,893 3.1%
13 Illinois 211,563 2.8%
14 Ohio 184,084 3.1%
15 Connecticut 173,395 1.3%
Georgia and Tennessee together represent 50% of the venture backed company employment of California! On face, I can think only that VC dollars in the southeast go disproportionately towards service companies which are human capital intensive. And what happened to North Carolina, the oft cited darling of the southeast? I’m dying to learn more. Please leave any thoughts in the comments.
While I’d have to check to confirm, these numbers may include companies that were venture backed some time ago in the service sector like Home Depot and FedEx (headquartered in Georgia and Tennessee, respectively) that account for a significant number of jobs today.
Interesting addition:
By factoring each state’s population into this data (data from July 2006; sourced from Wikipedia: http://en.wikipedia.org/wiki/List_of_US_states_by_population) and re-ranking VC backed jobs normalized by state population, Tennessee and Georgia rise up to 2nd and 4th place respectively. This rough ranking would be better served by using total jobs by state (rather than total population), but that data didn’t pop up on my first google search!
I’ve pasted the table below.
-Loren
Rank State Jobs Pop(M) Job/Pop New Rank
4 Massachusetts 639,881 6.44 9.9% 1
6 Tennessee 540,793 6.04 9.0% 2
7 Washington 444,463 6.40 6.9% 3
5 Georgia 604,254 9.36 6.5% 4
1 California 2,285,171 36.46 6.3% 5
10 Minnesota 302,049 5.17 5.8% 6
3 Pennsylvania 697,591 12.44 5.6% 7
15 Connecticut 173,395 3.50 4.9% 8
2 Texas 1,089,123 23.51 4.6% 9
9 Virginia 348,899 7.64 4.6% 10
12 New Jersey 279,893 8.72 3.2% 11
8 New York 415,661 19.31 2.2% 12
11 Florida 301,900 18.09 1.7% 13
13 Illinois 211,563 12.83 1.6% 14
14 Ohio 184,084 11.48 1.6% 15
Todd, I think you nailed it. Loren, great re-cut on the data. Thanks for fleshing this out, guys!
Best,
Matt