Venture capital activity drops in Washington state in 1st quarter

Apr 11, 2013

Washington state’s venture capital activity dropped a lot in the first quarter. But it may be too early to worry about the health of the startup community.

Washington usually ranks among the top five markets for venture capital funding – this time the state fell to number 10.

The usual suspects dominate – like California, New York and Massachusetts. But Georgia, Utah and Delaware also beat us in the amount of money startup companies raised.

Anand Sanwal is CEO of CB Insights, a New York-based company that compiled the data. He says Silicon Valley VCs have been opening offices elsewhere in the country and not as much here.

"Look at places like Los Angeles or New York, I’d say sentiment for their tech scene is very strong right now," Sanwal said. "Washington doesn’t have that same level of enthusiasm."

Greg Gottesman with Madrona Venture Group here in Seattle disagrees. He says Washington startups get a lot of attention from Silicon Valley for the big deals, and for earlier stage funding, there’s a healthy network of local investors.

"My sense is that good deals with great entrepreneurs and good technology – they’re getting funded here," Gottesman said.

Companies in Washington raised $100 million in the first quarter – down almost two-thirds from the end of last year. Nationally, venture capital activity edged up in the first quarter to $6.9 billion.