August 6, 2013
San Francisco Tops Silicon Valley In VC Investment
Two great maps (click to enlarge) and top ten lists from the Atlantic Cities (Why San Francisco May Be the New Silicon Valley) with respect to where the venture dollars are flowing and the deals are getting done across the Bay Area.
The city of San Francisco is the leader with $4.39 billion in venture capital investment, roughly a third of the Bay Area total. This is by far the largest amount of venture investment of any jurisdiction in the region, and a whopping 16 percent of total venture investment nationally. Palo Alto is a distant second with $1.29 billion (4.8 percent of the national total), followed by Redwood City ($1.06 billion), Mountain View ($918 million), Sunnyvale ($800 million), Santa Clara ($733 million), and San Jose ($688 million).
Investment has also begun to spread up and down the Peninsula, filling in the cities that stretch between San Jose and San Francisco proper. And, within the Bay Area broadly, according to these zip code level data, the San Francisco metro attracted nearly 70 percent more venture capital ($8.5 billion) than the Silicon Valley region ($5 billion).
The top ten zip codes into which the venture dollars flowed in 2011, with San Francisco's 94107 (Potrero Hill, South Beach, South Park) atop the list:
1. 94107 (Potrero Hill, South Beach, South Park) San Francisco - $1,885.8M
2. 94105 (Rincon Hill, Embarcadero South) San Francisco - $693M
3. 94043 (Suburban Mountain View, including Google headquarters) Mountain View - $660.5M
4. 94063 (Centennial, Stambaugh Heller, Redwood Village, Friendly Acres) Redwood City -$575.2M
5. 94103 (South of Market) San Francisco - $554.6M
6. 95054 (Suburban Santa Clara, north) Santa Clara - $548.3M
7. 94065 (Redwood Shores) Redwood City - $433.5M
8. 94301 (Crescent Park, University South, Old Palo Alto) Palo Alto - $412.7M
9. 94085 (North-central Sunnyvale) Sunnyvale - $389.7M
10. 94089 (North Sunnyvale, including Lakewood, Lockheed Martin HQ) Sunnyvale - $378.2M
The Bay Area attracted $13.5 billion in venture investment in 2011, "more than four times that of greater Boston or greater New York, the nation's second and third largest centers for venture capital investment." Have we mentioned that the number of employed in San Francisco has grown by 47,800 since the beginning of 2010 and is closing in on a December 2000 dot-com peak?
∙ Why San Francisco May Be the New Silicon Valley [theatlanticcities.com]
∙ SF Employment Slips In June To 10,000 Workers Below Peak [SocketSite]
First Published: August 6, 2013 12:45 PM
Comments from "Plugged In" Readers
"San Francisco Tops Silicon Valley In VC Investment"
Yeah, saw this yesterday, and it's clearly not true. You simply take the totals of the "juristictions" typically considered to comprise Silicon Valley (Palo Alto, Redwood City, Mountain View, Sunnyvale, and Santa Clara) and you've got $4.80B to SF's $4.39B.
SF VC may be increasing, but it does not (yet) top SV.
Posted by: Scott at August 6, 2013 1:26 PM
Regardless whether SF or SV is tops, it's great news for the bay area!
Posted by: lyqwyd at August 6, 2013 1:48 PM
And somewhere Tipster is rolling over in an unmarked grave.
Posted by: Anowned at August 6, 2013 1:51 PM
people that work for VCs and VC backed companies believe in market forces and accountability.
has anyone informed the stupidvisors of this? bad things are coming for SF...
Posted by: 700clubfan at August 6, 2013 1:53 PM
Redwood City is not "typically considered Silicon Valley", at least not to anyone that I know. "Typical Silicon Valley" ends at Menlo Park and becomes the peninsula after that. On the other side of the Bay it ends at Fremont.
Posted by: anon at August 6, 2013 2:46 PM
I doubt too many in the tech sector differentiate too much as evidence by the gridlock on 101 & 280 in both directions. sigh...
Posted by: ZapBrannigan at August 6, 2013 3:17 PM
Breaking out these data by round, along with a count of deals, would be more interesting. You could see the mix of early stage companies being funded in SF vs SV, and compare it to the mix of late stage companies being funded.
Posted by: noodle at August 6, 2013 3:22 PM
Locating your company in one zip code or another here won't make a bit of difference to fundraising. Might as well live someplace that works for you.
Posted by: Jimmy (No Longer Bitter) at August 6, 2013 3:24 PM
@Jimmy, if you have read the article series, it is saying exactly the opposite of what you said.
Posted by: Wai Yip Tung at August 6, 2013 3:42 PM
Are there numbers available from comparison in the past...say, 2004, 2008 etc..?
Posted by: REpornaddict at August 6, 2013 3:44 PM
@Wai: Just living in one zip code or another will not magically improve your business plan or prospects for raising money. You're 100% wrong on that.
[Editor's Note: See the pirate's comment below, or the article above.]
Posted by: Jimmy (No Longer Bitter) at August 6, 2013 3:48 PM
funding is a commodity, people are the precious resource. the zip code most certainly will influence the talent you attract. 'the kids these days' are increasingly realizing that life in the valley is effing boring. and the older kids are starting to realize they don't want to move to the burbs to raise kids.
Posted by: arrrrrgh-matey at August 6, 2013 4:07 PM
@Jimmy, that's not what the data says. Every chart shows otherwise. For example, if you are located to the North or East of Berkeley, the chance of getting funding is close to 0.
From the author from the first article:
The world, as I have written, is spiky, with its most intensive economic activity concentrated in a relative handful of places. Global tech is no exception — and it is taking a decidedly urban turn.
Why would one area has more economic activities than the other? It is not magic. There are plenty of reason why this is. And those are some of the things this series explore.
Posted by: Wai Yip Tung at August 6, 2013 4:32 PM
Uh, Socketsite, nice SF boosterism, but I beg to differ. The real story isn't that SF tops the Valley, its that the Valley is finally taking over SF. The growth in all those new jobs touted are tech workers, like those that come from the Valley. All those buses lining the streets are for tech workers who work in the Valley but now live in SF. A bit simplified, but nerds north, prices up, creative class and working class out. Yeah, SF will always remain higher density, but economically, culturally and socially over time the "Valleyization" of SF will be a more significant trend than the "urbanization" of VC.
Posted by: Burbed at August 6, 2013 4:33 PM
Whatever. You're missing my point. Causation vs. correlation? Just delete all my comments. Thanks, ed.
Posted by: Jimmy (No Longer Bitter) at August 6, 2013 4:43 PM
The VC money is flowing like it is 1999. Seemingly every annoying millenial has their own startup or is working at one. But I think I remember how this story ends...
Posted by: anon at August 6, 2013 4:55 PM
1. 94107 (Portero Hill, South Beach, South Park) San Francisco - $1,885.8M
Why is Potrero so often mis-spelled? Portero? Portrero? Is it really that hard?
(sorry this is one of my pet peeves..)
[Editor's Note: Apologies, the table was copied directly from The Atlantic's report. Since corrected above.]
Posted by: kic at August 6, 2013 5:11 PM
have you noticed the biotech IPO market. hottest its been since 2000, and the valuations of companies at $800M with nothing in the clinical pipeline is amazing. One sad not for the bay area. In the past 3-4 years, Boston has clearly taken over the top spot from the bay area in Biotech venture funding and in new jobs created, despite most VCs being located here. The local politicians suck
Posted by: i eat bicyclists at August 6, 2013 5:32 PM
The Pirate. I love it.
The other trend here in SF is the rise in talent of various eateries. Probably 2 dozen noteworthy recent openings here in SF and they are all packed nightly.
Posted by: eddy at August 6, 2013 7:43 PM
eddy, I assume coqueta is on your list, but what else do you really like?
redwood city population - 78K
palo alto population - 65K
mountain view population - 74K
Posted by: steve at August 6, 2013 8:26 PM
Steve, what you seem to be implying by your population figures is that these cities still get a lot more VC per capita than SF. That may be true, but the fact is that SF used to get approximately none. That's all changed, and the City has changed as a result. We used to service tech with law firms and financial firms. Now we are tech.
Posted by: curmudgeon at August 7, 2013 9:25 AM
^Also, since those cities are massive employment importers, it would only make sense to compare to neighborhoods of SF that are also importers (SOMA, etc). If you're going to exclude the bedroom community of Silicon Valley (San Jose), you need to exclude similar portions of SF.
Posted by: anon at August 7, 2013 9:37 AM
It is interesting that the movement has been towards SF rather than towards San Jose. Good for us. But San Jose has worked for 30 years on being more "urban", but seemingly has little to show for it. The real city won?
Also interesting that there is so little spillover to the East Bay, and Oakland in particular. Oakland seems particularly ripe right now for transformative change.
Posted by: curmudgeon at August 7, 2013 9:45 AM
San Jose is stuck with the legacy of having been built mostly in the 1950s/60s. Wide 6 to 8 lane expressways cutting parts of the city off from others, sprawl, and no real business district to speak of (although downtown is trying). San Jose is still 95% Irvine and 5% SF. It's really one of the most boring places on the west coast. At least Irvine has a beach nearby.
Posted by: rabbits at August 7, 2013 9:50 AM
Oakland's problem is crime. I lived in Berkeley 10 years ago and had many friends who lived in Oakland. About half of them had either been within a block of a shooting, had a gun pointed at them, been assaulted/ robbed, or had their home broken into. And this was back when crime was relatively mild compared to how it is today.
There's lots of great things about Oakland, but many companies will think twice about locating in an area with as much of a crime problem as Oakland.
Posted by: lyqwyd at August 8, 2013 12:58 PM
Oakland's problem is very definitely is crime. However crime is very highly concentrated in West Oakland and East Oakland, and downtown and north Oakland have been booming in many respects, and seem to get better with each passing year. So not to disagree at all, but I think both the reality and the perception may begin to shift, despite the recent problems.
Occupy and the follow on activities of the black block folk anarchist types haven't helped, but hopefully that's mostly behind us.
Posted by: curmudgeon at August 8, 2013 5:39 PM
It's certainly true it's concentrated those areas, but it spills out into many other parts of Oakland, especially since the economy went bad.
Oakland's leadership isn't helping the problem, most notably with their inability to find a police chief and the numerous other problems in the police department.
Posted by: lyqwyd at August 8, 2013 6:01 PM
We have got a (statistically) major increase in spillover crime (burglaries and even several armed break-ins) in the last year and a half in Piedmont -- even with our own police department. Hence the current installation of Tiburon-style license-plate readers at all points of ingress/egress.
n=1 but our house in Piedmont was broken into last year when we weren't home. They took very little (and luckily did not even enter the home office and see/take laptops) but it was disturbing for the kids. One of the few things they took was my 6 year-old's inherited-from-me very old iphone 3, which presumably has a resale value of maybe $30.
Posted by: shza at August 8, 2013 6:12 PM
Too many good restaurants to list. Haakasan, roka, azziza moving downtown, $300 a sitting fancy places in soma, etc....
Perhaps Oakland is SFs Brooklyn.
Posted by: Eddy at August 9, 2013 4:34 AM
North Oakland is pretty hoody, too.
Posted by: Anowned at August 9, 2013 9:13 AM
This is great economically, of course, but bad I think for other reasons, cultural, social etc given many of these companies huge complicitness and cooperation in the NSA surveillance.
SF is going to be one of the Big Brother epicenters it seems, oh well.,...
Posted by: REpornaddict at August 9, 2013 10:39 AM