While we talk about national economies all the time, it is typically your local city/metro/region economic health that matters most to your business, housing values, etc. Today, via Potomac Tech Wire, I received news that VC in my metro (the DC metro) is down quite a bit… From the newsletter,
DC-area companies raised $193.6 million in venture capital during the fourth quarter, the lowest total in seven quarters, according to new figures from Dow Jones VentureSource. The largest chunk of that funding, about $83.6 million, went to companies in the information technology sector, including McLean-based Trust Digital ($14.5 million) and Reston-based LucidMedia ($8.8 million). Bethesda-based medical software firm CodeRyte had the largest round of any local company in the quarter, closing $47.2 million in October. The lower overall numbers mirrored a national trend, which saw U.S. companies raise $5.5 billion during the quarter, 30% less than the fourth quarter of the prior year. “The data confirms what we’ve being hearing anecdotally for some time that many venture capital firms are circling the wagons to weather the downturn and are focusing more on the health and vitality of current portfolio companies rather than new investments,” said Jessica Canning, the director of global research for Dow Jones VentureSource.
While my venture has not gone out for funding, we often look to our local peers for feedback etc. Another way in which a local economy can influence the growth of a new venture. That said, in recent weeks, I have used the GMU network to put feelers out related to angel funding.
As a consumer related gaming company we are very out of step with many of the new ventures in our neighborhood. Fortunately, we are close to New York and hook up with many firms through trade groups.