New Research Quantifies the Breadth, Growth, and Resilience of Jobs at VC-backed Companies

From coast to coast, the venture capital industry is fueling resilient American jobs, and we have new data to prove it. NVCA, Venture Forward, and the UNC Kenan-Flagler Institute of Private Enterprise embarked on a first-of-its-kind study to explore the employment dynamics of workers at VC-backed companies in the U.S. Using a list of over 67,000 companies that received venture financing as early as 1970 and administrative data on employment for U.S. establishments dating from 1990 to 2020, we successfully mapped the location of workers at VC-backed companies in 2020 by both state and congressional district. Our results, as detailed in this newly released report, were striking.

First, we found that workers at companies that received venture financing are distributed broadly across the U.S. Despite 73% of VC investment dollars going to California, Massachusetts, and New York in 2021, our analysis shows that 62.5% of employees at the companies in our national data set were located outside of those three states. The distribution of VC-backed jobs is geographically dispersed with workers at VC-backed companies located in all 50 states and all 435 congressional districts (as well as Washington, D.C. and Puerto Rico). These results add grist to the sentiment that venture capital is spreading through the country and benefiting labor markets and local economies that span the whole country.

The dynamics of these jobs at VC-backed companies over time were also eye-opening. We found that employment at VC-backed companies grows faster than employment at non-VC-backed companies. What we did not expect was how much faster employment at VC-backed companies grows. The annualized growth rate of employment at VC-backed companies in our dataset between 1990 and 2020 is 8.2%. In comparison, the growth rate of total private sector employment (as provided by the Bureau of Labor Statistics) between January 1990 and February 2020 is just 1.1%. This means that employment at our set of VC-backed companies grew at roughly eight times the pace of employment at non-VC-backed companies.

Finally, we were struck by the resilience of job growth at VC-backed companies and noted that growth rates of employment at VC-backed companies were strong and positive regardless of the stage of the business cycle. To provide one example of this resilience, consider employment dynamics following the most recent financial crisis of 2007-2008. Following the financial crisis and during the Great Recession, annual job growth at our set of VC-backed companies exceeded 4% for every year between 2009 and 2018. In contrast, total private sector employment shrank by 4.3% in 2009, contributing to a decrease of 7.4 million private sector jobs during the recession.

We believe the findings in our report concerning the breadth, growth, and resilience of VC-backed jobs provide motivation for further exploration of this subject, and hope that others will build on our research. In addition, we hope that our findings indicating that VC investment serves as a catalyst for job creation not merely in a select few metropolitan hubs will promote policies that encourage more VC activity in the U.S., helping to fuel broad-based prosperity across the entire nation.

Employment Dynamics at VC-Backed Companies in the United States: 1990 to 2020

New research from NVCA, Venture Forward, and the University of North Carolina Kenan Institute of Private Enterprise estimates and geographically maps employment at VC-backed companies headquartered in the United States at the state and congressional district levels, and analyzes the employment dynamics at VC-backed companies from 1990 to 2020.

Using company-level data for over 67,000 VC-backed companies that received venture financing dating back to 1970, we map the location of approximately 3.8 million jobs at VC-backed companies in 2020. Explore the interactive map for detailed employment figures by individual congressional district or state.

Key findings:

  • Employment at VC-backed companies grows at roughly 8x the pace of employment at non-VC-backed companies.
  • Employment growth at VC-backed companies is resilient with strong positive growth rates observed regardless of where the economy is in the business cycle.
    • Even after the 2007-2008 financial crisis and during the Great Recession, annual job growth at VC-backed firms exceeded 4.0%. Total private sector employment, by comparison, shrank by 4.3% in 2009, contributing to a decrease of 7.4 million private sector jobs.
  • VC-backed jobs are distributed broadly across the entire U.S. with 62.5% of VC-backed jobs outside the states of California, Massachusetts, and New York.
  • In contrast, 73% of VC investment was deployed to startups in those three states in 2020.

State of Black Venture

BLCK VC, in partnership with Silicon Valley Bank, is proud to share the inaugural State of Black Venture report. They surveyed our community and collated industry data to set a baseline against which they can measure future progress toward equitable representation.

Key Findings: 

  • The number of Black partners is increasing: 27% of Black partners launched new funds within the past two years.
  • Black fund managers face fundraising & investing obstacles raising funds that are 46% smaller than the industry average.
  • Black partners have an outsized positive impact with over 50% hiring and mentoring other Black venture investors.

State of the Market Report H1 2022

The State of the Markets highlights the latest trends for an innovation economy that reached new heights in 2021 with venture investment doubling to a record $333 billion. Here are three takeaways from the report:

  • Exceptional VC investment growth in 2021

    US VC investment doubled 2020’s record high fueled by both record levels of US VC fundraising and extensive participation from hybrid PE/VC investors.

  • Growth expected to level set in 2022

    With the drop in the US markets, it is questionable whether 2022 will see the same level of growth experienced in 2021, yet growth is expected to continue at a more sustainable rate.

  • Persistent headwinds continue

    Innovation companies continue to experience challenges including hiring talent, market inflation and supply chain delays resulting in increased costs.

2022 Trends in Entrepreneurship Report

The Trends in Entrepreneurship Report brings together expertise and data from academia, industry and policy to highlight relevant topics facing entrepreneurs and investors today.

For the 2022 annual report, the Kenan Institute of Private Enterprise invited researchers to submit trends based on their own emerging research. They welcomed submissions related to current topics in entrepreneurship, with a particular interest on trends related to funding; ecosystems; teams and talent; emerging technologies; and addressing diversity, equity and inclusion in entrepreneurship and small business. Each trend was reviewed for quality and relevance their editorial board.

The copyright for each trend rests solely with the submitting author and their co- authors.

SVB Healthcare Investments & Exits 2022

The SVB Healthcare Investments & Exits 2022 edition covers data for the entire year of 2021. Healthcare trends reveal venture fundraising almost doubled in 2021 over the previous year, with phenomenal growth across sectors: biopharma, healthtech, dx/tools, and device. Download the report for a deep dive into the current healthcare landscape and critical trends to watch.

Key Takeaways: 

  • 30% higher investment – Funding for healthcare companies exceeded $80 billion, beating 2020’s record by more than 30% in the US and Europe.

  • Record dx/tools exits – IPOs tripled and M&A doubled over 2021.

  • 157% more healthtech investment dollars – 42 healthtech unicorns emerged this year. This is more than 4x the activity of 2020.

Q4 2021 PitchBook-NVCA Venture Monitor

This report was updated on January 14, 2022 to account for an error in deal data. 

Fundraising tops $100 billion in a record year for venture capital 

The VC industry has closed another remarkable year for the record books, despite the ongoing pandemic and growing adversities such as economy-wide supply chain woes and labor shortages.

The Q4 2021 PitchBook-NVCA Venture Monitor, sponsored by Insperity, depicts how the frenetic pace of dealmaking, exits and fundraising in 2021 toppled previous records, even as the pandemic’s future trajectory remains unknown.

Highlights include:

  • US VC-backed companies raised nearly $330 billion in 2021–roughly double the previous record of $166.6 billion raised in 2020.
  • Nontraditional investors such as corporate VC funds, hedge funds, PE firms and sovereign wealth funds participated in nearly 77% of total annual deal value.
  • Exits were a huge part of the story of 2021, with more than $774 billion in annual exit value created by VC-backed companies that either went public or were acquired.
  • Early-stage VC deal activity in 2021 nearly doubled the prior record and eclipsed $80 billion for the first time ever.

How are Black & Latina Women Investors Breaking into VC?

See how 204 Black & Latina women broke barriers entering the industry

Breaking into venture capital is notoriously difficult, a foot in the door requires a precarious combination of experience, connections, and timing. But the odds are especially stacked against diverse women. Despite these odds, they’ve gone on to establish their own funds and create opportunities for others.

The 2021 Black & Latina Women in VC report analyzes the professional & educational backgrounds of 108 Black and 96 Latina women in the U.S. VC ecosystem in investment roles. We identify themes and patterns to learn how they’re breaking into and thriving in venture capital roles.

EVCA 2nd Annual Pre-partner Compensation Survey

EVCA released their 2021 compensation survey with 246 respondents from the EVCA community. This edition is the most accurate and comprehensive junior investor compensation report in the industry to date.

Alumni Networks in Entrepreneurial Financing

One in three deals in the early-stage financing market involves an investor and founder from the same alma mater. This research shows that founders’ connections to early-stage investors through shared education networks are more important than school academic quality or shared geography in facilitating access to funding. Early-stage investors tilt their portfolios toward startups from their alma mater and place larger bets on these firms. Connected investments outperform the same investors’ non-connected investments. Their results are stronger where information about founder abilities is likely less clear.