The growth of innovation ecosystems across the U.S. can be influenced by a range of factors – the presence of research institutions, incubators and accelerators, local investment communities, existing businesses and corporations, cost-of-living, public policy, population density, and infrastructure. State and regional venture capital trade associations play the critical role of navigating the bevy of resources and challenges for innovators, and help spur innovation through programming, advocacy and research.
Using venture capital investment in high-growth companies as a key metric of success, NVCA data bears out the work being accomplished at the state level to grow innovation ecosystems. Last year, new companies in 48 states received venture capital investment, an increase from 45 states in 2009. Accelerating this trend is the fact that venture capital investors continue to put more dollars to work in companies outside of their home states. In 2013, California venture firms, which raise the majority of venture capital in the U.S., invested in companies located in 38 states.
Last week, Janice Mawson, NVCA’s VP of Membership, led the charge to convene the leaders of regional and state-based venture capital associations in Washington, DC to explore how we can collectively drive additional growth and entrepreneurship to regions across the country. This year, we were joined by the New England Venture Capital Association (NEVCA), VentureOhio, the Mid-Atlantic Venture Association (MAVA), the Upstate Venture Association of New York (UVANY), the New York Venture Capital Association (NYVCA), the Illinois Venture Capital Association (IVCA), and the Michigan Venture Capital Association (MVCA). We hope to see many more states and regions represented at our next meeting.
Whether it’s advocating for policies that grow regional innovation ecosystems, building research programs or creating new events, regional and state-based venture capital associations are succeeding in helping to grow entrepreneurial ecosystems by leveraging and building local resources.
As we learned over the course of our day-long discussion, many regional venture capital associations are actively engaged in advancing public policies that help strengthen their local ecosystems. Maura O’Hara of the Illinois Venture Capital Association summed up the point clearly when she said, “public policy matters.” The government can facilitate the rise of opportunity; or it can be a hindrance and prevent the dedication of talent and funds toward new companies. C.A. Webb, the Executive Director of the New England Venture Capital Association, leapt into public policy advocacy this year to urge the Massachusetts legislature to expand opportunity by removing the state’s non-compete laws that are currently keeping strong talent from the startup workforce.
In Illinois, the IVCA’s storytelling campaign highlighted for state legislators the ways in which venture capital provides Illinois’ entrepreneurs, job-seekers, and students with new opportunity. Under the direction of Emily Heintz, the Michigan Venture Capital Association leads a massive state-focused annual research report to bring to light the strength of the Michigan ecosystem. This report gives the MVCA the data they need to educate policymakers about the impact venture capital has on growth, jobs and innovation in the state. VentureOhio, founded in 2013, under the leadership of Frank Samuel has taken on the challenge of building a strong research program.
Regional venture capital associations also expand opportunities for connection within innovation ecosystems through events for entrepreneurs and investors across industries, stage and type. Sam Ticknor, Executive Director of UVANY, works to strengthen the innovation networks in upstate New York. An event UVANY held last year at Ithaca College drew together student entrepreneurs, service providers, venture capital investors, limited partners and serial entrepreneurs.
The Mid-Atlantic Venture Association focuses on community engagement and drives immense value to mid-Atlantic entrepreneurs through its TechBUZZ pitch events held three times annually for early- and seed-stage companies. MAVA’s Executive Director Julia Spicer has built TechBUZZ to serve and develop entrepreneurs through deep feedback from a variety of investors, rather than using a competition format. At the NYVCA, based in New York City, Robert Johnson works to connect investors and entrepreneurs through a variety of events, including their annual Ingenuity conference.
By bringing together the people who are leading the charge to facilitate and spur innovation in regions across the country, we each learned about the unique solutions being created to answer the particular needs of each ecosystem. Even more, by sharing best practices, goals and challenges we learned we can all do more together.