This indicator represents the average size of the venture capital investments being made in a state. The indicator is expressed as the total dollars of venture capital invested in millions divided by the number of companies receiving venture capital. This indicator provides some measure of the magnitude of investment that developing companies in a state have attracted from venture capital sources, though it does not necessarily reflect the level of overall venture investment or deals in a state. The availability of venture capital may vary widely based on stage of investment, type of company, and numerous other factors.

Venture capital data include financing at seed, early, and later stages of venture investment. Seed financing supports proof-of-concept development and initial product development and marketing. Early stage financing supports product development and marketing, the initiation of commercial manufacturing, and sales; it also supports company expansion and provides financing to prepare for an initial public offering. Later-stage financing includes acquisition financing and management and leveraged buyouts.

Some states have relatively few venture capital deals taking place in a given year; thus, the value of this indicator may show large fluctuations on a year-to-year basis. In states that report only several venture capital deals per year, a single large or small investment can substantially affect the value of this indicator.

Data source: PitchBook, venture capital and private equity database.