Aug. 29, 2012
-- Nate Redmond, managing partner of Rustic Canyon Partners, writes in Forbes that for the past three decades, Silicon Valley has had a lock on the creation of dominant technology companies, from silicon to search to social. Ask the same group to name the next Silicon Valley and you are likely to hear a variety of answers. Some will offer up New York. Others stick with Boston and New England. But if we project forward based on trends in the data and structural advantages, it is Los Angeles that is emerging as the next Silicon Valley. What answer you will get at Venture Capital Happy Hour, on Tuesday September 4, 6:00pm?
For the better part of the last two decades, Southern California and New England have traded roles as runner up to Silicon Valley. In 1995, before the Internet bubble was in full swing, Southern California attracted $1.3 billion of venture capital investment, second only to Silicon Valley with $1.8 billion. New England was a distant third with $0.8 billion. In this era, Southern California was a clear number 2. By 1999, the promise of the Internet attracted a new crop of entrepreneurs to Silicon Valley and investment in the region skyrocketed nearly 10-fold. During the same period, New England grew quickly and edged out Southern California as the next most attractive area for venture capitalists to invest and for the following five years, New England laid undisputed claim to the runner up title.
The baton is once again changing hands. Over the last five years Southern California closed the gap with New England and in 2012, entrepreneurs in Southern California once again attracted more investment than any other region outside of Silicon Valley. More than New England and nearly twice as much as New York. We shouldn’t be surprised that the LA-led Southern California region is once again emerging as the next Silicon Valley.
Some wrote off Silicon Alley with the bursting of the bubble as investment into the region
collapsed in the years that immediately followed. But New York has enjoyed a resurgence of activity over the past five years and the migration of VCs from Boston to New York indicates where they see the relative opportunities. The press has written extensively on this shift and if total mentions was the primary indicator of success, New York would be the clear odds-on-favorite to become the next Silicon Valley. But many whisper about the continuing challenges of finding enough great technical talent and competing with the cash compensation offered by the banks (underlining the defining culture).
Venture Capital Happy Hour, featured in The New York Times, is produced by Golden Networking, the premier networking community for business executives, entrepreneurs and investors. Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info at goldennetworking dot net