Rural states saw massive jumps in venture capital investment from 2020 to 2022
When the Covid-19 Pandemic came to America in March 2020, analysts had dire predictions for the investing landscape. Massive economic recession was predicted, and with it layoffs, startup bankruptcies, and an overall reduction in venture capital investment.
Instead, in just two years venture investments are larger than ever, and funding is flowing to states that haven’t traditionally been seen as startup hubs. Using data and analysis conducted by Pitchbook, let’s look at what states stand out as funding winners – and losers – in 2022.
New Regions Seeing Venture Funding
Almost every state saw a sizable increase in the number and value of venture deals during this time period, but several states stand out for drastically increasing from their baseline. In particular, West Virginia (+443% deal value), Vermont (+452%), and Idaho (+305%) saw incredible increases, though in some cases there were only several deals in 2020 to set a baseline.
However, the same regions are still king when it comes to funding overall, with California and New York still the biggest states in venture funding, though tax-advantaged locations such as Texas and North Carolina grew over 50% in deal value. Clearly, despite public figures decrying the end of California as an important business hub, it is still one of the most important centers of financial activity for startups.
Among our top states to watch are Montana and Nevada. A mix of young populations, influx of tech workers, and business-friendly policies mean these regions will likely be key funding spots over the next several years and startups form in a fully post-pandemic environment.
What Comes Next
As with many sectors of the economy, the pandemic largely accelerated existing trends, with few signs of slowing down now. As remote work is increasingly the standard for technology startups, we expect the trends of more venture deals occurring outside of traditional tech hubs to continue. A recent Brookings report showed that tech employment is growing fastest in “quality-of-life meccas and college towns” as well as large cities outside of traditional tech hubs.
As venture capital looks beyond Silicon Valley and the Big Apple, it’s more important than ever for entrepreneurs to pursue funding from investors across the country. EquityNet connects entrepreneurs and investors across industries, experience, and interest to secure funding quickly and equitably. Entrepreneurs can subscribe to promote their profile to investors, message potential partners, and share important documents to find the right funding sources.