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Venture Capital Deals as a Percentage of High Science, Engineering, and Technology Employment Establishments (Percent)

State Indicator S-59

This indicator represents the extent to which companies with high science, engineering, and technology (SET) employment in a state receive venture capital investments. The value of the indicator is calculated by dividing the number of venture capital deals by the number of companies operating in industries with high SET employment in that state. High values indicate that companies with high SET employment in a state are frequently using venture capital to facilitate their growth and development. In most cases, a company will not receive more than one infusion of venture capital in a given year. Venture capital investment can help to grow a company with high SET employment.

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.

The U.S. Census Bureau tracks information on establishments, which it defines as single locations at which business is conducted or where services or industrial operations are performed. An establishment is not necessarily identical with a company or enterprise, which may consist of one establishment or more.

Data on business establishments operating in industries with high SET employment for the years 2003–08 are based on the establishments’ classification according to the 2002 edition of the North American Industry Classification System (NAICS). The data for the years 2009–12 are based on classification according to the 2007 edition of NAICS, and subsequent years use 2012 NAICS codes. See the State Indicators data tool technical notes for a description of how industries are defined as high technology. Data for years prior to 2003 are not directly comparable.

Access to venture capital financing varies greatly across the nation, and venture capital investment is concentrated in relatively few states. California and Massachusetts consistently rank highest on this indicator by a large margin. 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.

Data sources: PitchBook, Venture capital and private equity database; U.S. Census Bureau, special tabulations of the Business Information Tracking Series.

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NA = not available.

NOTES: The national total for venture capital for the United States includes U.S. territories; The national total for establishments in high-technology industries for the United States does not include U.S. territories.

SOURCE: PitchBook, Venture capital and private equity database, data as of October 2017; U.S. Census Bureau, special tabulations of the Business Information Tracking Series (various years), data as of April 2017.