National Venture Capital Association Turns 35

Washington — The National Venture Capital Association, a treasure trove of information about the U.S. venture capital industry, turns 35 in 2008. And to mark the occasion the trade group has published a list of 35 facts about the V.C. industry that demonstrate its diversity as well as growth.

“For 35 years we have been communicating the value and unique economic efficiency of this still relatively young industry,” said NVCA President Mark Heesen, who recently visited the Research Triangle area to discuss the state of the V.C. trade. “This decades-long dialogue serves not just our members, but all stakeholders in the venture capital ecosystem including pension fund participants, foundations, job seekers, and frankly, every American.”

Heesen is a tireless advocate for the NVCA, which presents some 470 venture capital firms across the industry. He also led a fight in lobbying Congress to defeat a recent measure that he and the organization felt would unfairly tax venture firms and their partners.

“From the creation of the biotechnology industry to the backing of household names such as FedEx, Google, Intel, Genentech and Staples, venture financing has proven to be an unparalleled, highly valuable contributor to the national economy and to our daily lives,” he said in a 35th anniversary statement provided by the NVCA. “Venture investment represents a mere 0.2 percent of U.S. GDP but is responsible for 10.4 million American jobs and $2.3 trillion in sales. No other asset class can lay claim to these achievements. We have a distinct story to tell and we look forward to the next 35 years of discussion.”

The organization was founded in 1973 in Chicago and moved to the nation’s capital in 1977. Among its longest-term supporters is Intersouth Partners in Durham, one of the oldest and largest VC firms in the southeast.

The NVCA “Facts” list:

1. The top ten states for VC investment in 2007 were 1) California, 2) Massachusetts, 3) Texas, 4) Washington, 5) New York, 6) Pennsylvania, 7) Maryland, 8) Florida 9) New Jersey, 10) North Carolina.

2. In the last 35 years, venture capitalists invested more than $441 billion in over 57,000 companies in the United States.

3. Minnesota and Pennsylvania were ranked third and fourth respectively in venture capital investment in the medical device sector in 2007.

4. Washington and North Carolina were ranked fourth and fifth respectively in venture capital investment in the biotechnology sector in 2007.

5. Of the top 10 states for venture capital investment in 2007, Washington had the highest five year growth rate for investment dollars at 124.2 percent.

6. States where VC investment grew 100 percent or more in the last five years include: Washington, Oregon, Kentucky, District of Columbia, New Mexico, Indiana, Kansas, Mississippi, Vermont, and Iowa.

7. The San Diego metro region was the second largest metro region for life sciences investing in 2007.

8. The top five area codes for VC investing in 2007 were 650, 408, 858, 617, and 415.

9. More than 1400 seed and early stage companies received venture capital investment in 2007.

10. The average venture capital round in 2007 was $7.7 million.

11. The Clean Technology Sector, which includes alternative energy, pollution control and clean power supplies, has had the most venture capital investment growth in the last five years.

12. The Biotechnology Sector received the most venture capital seed money in 2007.

13. New York City had the second highest number of venture-backed acquisitions in 2007 after San Jose.

14. One U.S. job was created for every $25,000 of venture capital invested between 1970 and 2006.

15. Venture-backed companies we encounter everyday include FedEx, Starbucks, Home Depot, Staples, Outback Steakhouse, and Whole Foods.

16. Internet companies founded by venture capital include Google, eBay, AOL, Facebook, YouTube, Netscape, and Shutterfly.

17. Every one dollar of venture capital investment between 1970 and 2006 created $5.60 of U.S. revenues in 2006.

18. Venture-backed companies consistently grow faster than their non-venture-backed counterparts.

19. One out of every three American has been positively impacted by a venture-backed medical innovation.

20. Lifesaving medical innovations brought to market by venture capital include the pacemaker, MRI, ultrasound, angioplasty, and stent grafts.

21. Venture-backed medical innovations that improve quality of life include glucose self monitoring, Flumist, and spinal implants.

22. Venture capitalists invest in innovations that seek to eradicate leading causes of death in the United States including cancer, heart disease, stroke, diabetes, spinal injuries and respiratory disease.

23. One quarter of venture-backed companies that are now public were founded by a foreign born national.

24. Venture capital investment in a company is typically five to 10 years in length; often longer but rarely less.

25. Venture capital investment has consistently outperformed the S&P 500 and the NASDAQ for the 10 and 20 year time horizons for decades.

26. There are fewer than 800 venture capital firms in the United States.

27. Venture capital accounts for just 0.2 percent of U.S. GDP but is responsible for 10 percent of all U.S. jobs and 18 percent of U.S. revenues.

28. Since 1973, close to 3,000 venture-backed companies have gone public on the U.S. stock exchanges.

29. Since 1973, more than 4,000 venture-backed companies have been acquired for their innovations and business models.

30. In 2007, U.S. venture capitalists invested $1.4 billion in China and $1.0 billion in India.

31. The average number of company boards that venture capitalists sit on is 4.

32. One out of every five deals in 2007 had a corporate venture capital investor.

33. The NVCA has a membership of more than 4,000 venture capitalists and a staff of 12.

34. The majority of venture capitalists were once entrepreneurs, scientists or engineers themselves before they began investing.

35. Fifty-five new venture capital funds were raised in 2007.