Yet More on the State of VC Funding ...

I hate to keep harping on VC funding, yet its still the lubricant the Valley relies on to help turn ideas into substantial businesses. The market is crying out for alternatives but for now its still the main game in town.

Because my focus is on Silicon Valley itself - more broadly, technology in the greater San Francisco Bay Area (so, yes, including San Francisco's South of Market start-ups, Emeryville and so on) - I'm always interested to see how the money flows to the Valley compared to other geographies. Here's Q2 2009 VC funding of start-ups by region, courtesy of Silicon Alley Insider (as are the other charts in this post)

The Valley continues to be the main recipient of VC funding, with one third of the total. Frankly, I'd expected it to be more. You can certainly see how the rest of the market is very fragmented, geographically.

In Q2 the industry segments that did best were biotech and medical devices, whereas clean tech has collapsed from a funding perspective (the Industrial/Energy vertical below). No real surprise as energy prices are way below those of a year ago and its still a tough space to figure out winners and one that requires substantial capital resources for success.



In a recent post I talked about VC's main concerns around lack of exits, or ability to eventually find a liquidity event that actually realizes their investment. Here's a very graphic representation of the (lack of) IPO opportunities for liquidity. The chart doesn't include Q2 2009 in which I think there were 3 tech IPO's including OpenTable, but its still a collapse compared to the couple of prior years. It won't continue this way for ever and in my next post I'll suggest some reasons why ...