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Venture Capital

Description: 

Venture capitalists invest in firms that have a high potential for growth but are not ready to do an initial public offering of stock. The investments tend to be both high risk and high return. Venture capital activity can be used to measure the number of potentially high-growth firms being started. These typically are innovative high-technology firms, such as biotechnology enterprises.

Venture capital data are displayed in three ways on Arizona Indicators: the number of venture capital deals per 1 million residents, the inflation-adjusted value of the deals per 1,000 residents, and the value per $1 million of gross state product. The inflation-adjusted dollars are expressed in terms of the latest year of data available.

Data Source: 

PricewaterhouseCoopers/National Venture Capital Association MoneyTree(tm) Report: http://www.pwcmoneytree.com/. Click on “Regional Aggregate Data.” The annual data reported on Arizona Indicators is the sum of the four quarterly reports for the calendar year. The quarterly reports are available a few weeks after the end of a quarter.

Annual population estimates, expressed as of July 1, are produced by the U. S. Department of Commerce, Census Bureau. The national and state estimates are released in December. The time series of population estimates is most easily accessed from the BEA: http://www.bea.gov/regional/index.htm.

The GDP deflator is available from the U.S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/national/index.htm. Click on the “Interactive Tables: GDP and the National Income and Product Account (NIPA) Historical Tables” link; the GDP deflator is in Table 1.1.9 (Section 1: Domestic Product and Income).

Data Quality Comments: 

The venture capital data are based on publicly reported deals and may not be representative of total venture capital invested. For Arizona, considerable variability from year to year results from the small number of deals.

iconNumber of Venture Capital Deals Per 1 Million Residents

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Visualization Notes:

The per capita number of deals is cyclical, higher during economic expansions than during recessions. The numbers were extremely high during the “dot com” boom from 1999 through 2001. No trend exists over time. Arizona’s per capita number has been far below the national average, especially since 2008, when it has ranged from 66-to-76 percent below average. The 2014 figure was 66 percent less than the U.S. average.

iconVenture Capital Per Capita in Inflation-Adjusted (2013) Dollars

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Visualization Notes:

The per capita inflation-adjusted value of venture capital is cyclical, higher during economic expansions than during recessions. The values were extremely high during the “dot com” boom from 1999 through 2001. No trend exists over time. Arizona’s per capita value has been far below the national average. The 2014 figure was 75 percent less than the U.S. average.

iconVenture Capital Per $1 Million of Gross Domestic Product

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Visualization Notes:

The value of venture capital per $1 million of GDP is cyclical, higher during economic expansions than during recessions. The numbers were extremely high during the “dot com” boom from 1999 through 2001. No trend exists over time. Arizona’s value relative to GDP has been far below the national average, especially since 1999. The 2013 figure was 77 percent below the U.S. average, the third lowest since the series began in 1995.

Data Source

PricewaterhouseCoopers/National Venture Capital Association MoneyTree(tm) Report: http://www.pwcmoneytree.com/. Click on “Regional Aggregate Data.” The annual data reported on Arizona Indicators is the sum of the four quarterly reports for the calendar year. The quarterly reports are available a few weeks after the end of a quarter.

Annual population estimates, expressed as of July 1, are produced by the U. S. Department of Commerce, Census Bureau. The national and state estimates are released in December. The time series of population estimates is most easily accessed from the BEA: http://www.bea.gov/regional/index.htm.

The GDP deflator is available from the U.S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/national/index.htm. Click on the “Interactive Tables: GDP and the National Income and Product Account (NIPA) Historical Tables” link; the GDP deflator is in Table 1.1.9 (Section 1: Domestic Product and Income).