Florida Falls in Venture Capital Investment for First Time in 3 Years: $203 Million Compared to California's $15 Billion - Even Ohio Beat Us

by Rosa Eckstein Schechter
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For those involved in the Florida commercial real estate market, what's happening in Florida business and what's predicted to happen in Florida business is important. It's more than monitoring development deals or land use: the future success of Florida's commercial real estate development is intertwined with the health of Florida's business development.

Florida Venture Capital Investment in 2012: the Money Tree Report is Out

Which brings to what has been happening with investors around the country and their decisions regarding investing - specifically, investing venture capital here in Florida. What's venture capital really? Venture capital, according to Investopedia, involves:

Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.

And according to year-end money analysts' take on things, Florida didn't fare too well on enticing venture capital to the Sunshine State last year. The National Venture Capital Association reports, in an analysis published as the "MoneyTree Report," together with Pricewaterhouse Coopers and using information and numbers from Thomson Reuters, that Florida had 34 venture deals last year.

Those 34 venture capital deals in Florida during 2012 brought $202.9 million to Florida business. The MoneyTree Report compares this to the previous year's total of $346.3 million from 55 venture capital deals.

Florida Venture Capital Funding Fell in 2012 (As Did the Nation as a Whole)

Florida took a hit in venture capital investment last year. In fact, Florida ranked at one of its lowest points on the national venture capital investment scale, in comparison to other states, in 2012, according to the MoneyTree Report. Florida was ranked no. 20 in 2012, down from a rank of no. 18 in 2011 - and having been in the top 10 venture capital states in past years - after venture investment dollars tumbled 35% for Florida in the past year.

That's the news from this report. (Click on the image of a Blue Florida to read the report online.) Of course, the entire country faced a similar situation. The United States as a whole saw a drop of 10% in venture capital investment dollars in 2012.

Where does Florida go from here? And what part of Florida fared best in 2012 Venture Capital?

The bigger news here: this is the first time that venture capital investment has dropped in the United States in three years. What is happening to Florida is happening to the country as a whole. Already, many pundits are warning for no one to listen to any voices crying out that the "sky in falling," as various reasons for the dip in venture capital investment is explained. Some are pointing to Facebook's limp debut in the stock market last year; others are pointing to things like the ongoing budget fights in Congress.

Meanwhile, within the State of Florida, it is interesting to note that Central Florida appears to have been the focus of much of the venture capital interest last year, a region that includes the Orlando / Lake Nona metroplex.

Which states are most popular with venture capitalists, based upon 2012 numbers? California is a strong number one ($15 billion in 2012); followed by Massachusetts; New York; Washington State; and Texas.

 

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Rosa Eckstein Schechter
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