TLDR:
- Over the past three decades, the number of venture capital funds has quadrupled and employment in VC-backed businesses has grown 24 times faster than the overall economy.
- Tennessee and Georgia continue to lag behind most other states in equity investments in startup companies.
A recent report by the National Venture Capital Association has shown that over the past thirty years, the number of venture capital funds has increased significantly, with employment in businesses backed by VC funds growing at a rate 24 times faster than the overall economy. However, Tennessee and Georgia are shown to be falling behind most other states in terms of equity investments in startup companies.
Despite five years of steady growth, a new report indicates that venture capital and “seed” funding in startup businesses dropped in the second half of 2022. This shift is attributed in part to unexpected disruptions such as Russia’s invasion of Ukraine and the resulting geopolitical instability, leading to a retrenchment in the venture capital sector.
Bobby Franklin, the president and CEO of the National Venture Capital Association, highlighted the adaptability of the VC sector in response to such disruptions. However, the report indicates a significant impact on funding for startup businesses as a result of external events beyond the control of the industry.