Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Adapted from Pitchbook; Chart: Axios Visuals

Venture capital investment is seeping out from Silicon Valley to the rest of the country, but the West Coast still dominates the market by a wide margin.

Why it matters: Venture capital investment can play a crucial role in building fast-growing, tech-based economies like those of the Bay Area, Seattle, Austin, New York and Boston. But VC investors don't typically stray outside those markets to look for the next big thing.

By the numbers: Last year, the Bay Area's proportion of overall U.S. venture capital investment fell to the lowest point since 2013, according to year-end data from Pitchbook and the National Venture Capital Association.

  • The proportion of West Coast deal value also slipped to around 50% of the country's total, down from 62.3% in 2018.
  • Meanwhile, deal counts and values crept up or stayed steady in every other region between 2018 and 2019.
  • Philadelphia, Chicago, New York City and Washington, D.C. saw incremental upticks in the number of deals in 2019. Higher year-over-year growth was seen in Seattle (10.6%) and San Diego (8.4%).

The big picture: The majority of U.S. venture capital funding goes to California, New York and Massachusetts — and 2019 was no different.

  • "[O]ne of my predictions last year — that we’d see an increase of VC going to 'rising' states — proved to be wrong," AOL co-founder and Revolution CEO Steve Case wrote in a recent Medium post.
  • The amount of VC investment going to just three states (California, New York and Massachusetts) actually increased from 75% in 2018 to 78% in 2019.
  • Case says he's sticking with his prediction for the coming year, based on the rising cost of Silicon Valley (as well as the start of the backlash against against it) and the multi-billion-dollar exits in "rising cities."

What's happening: Investors with Silicon Valley roots are branching out and raising funds in places they see as having untapped potential.

  • Last week, J.D. Vance launched a new VC firm called Narya Capital and raised $93 million for its debut fund, which is targeting a total of $125 million, and will be headquartered in Cincinnati. Big Silicon Valley names are limited partners — including Peter Thiel, Marc Andreessen and Eric Schmidt.
  • The mission is similar to Case's Rise of the Rest Seed Fund, where Vance was previously managing partner. The new fund's strategy is to invest in Series A rounds for startups in mid-sized cities like Salt Lake City, Raleigh and Atlanta.

When Mark Kvamme moved to Ohio from Silicon Valley to start Drive Capital eight years ago, "people literally thought I was crazy," he said. "One investor even told me, Ohio is where venture capitalists go to die."

  • Drive now has $1.2 billion under management has invested in more than 40 companies, including Root Car Insurance and Beam Dental.
  • Ohio's venture capital investments have more than doubled since 2013.

Still, there's a reason the Bay Area remains dominant: Its high concentration of talent, entrepreneurs and customers, along with the lion's share of capital thanks to blockbuster IPOs creating new wealth to reinvest.

  • Investors agree that, even though there are some shoots of progress in other regions like the Midwest, it will take four or five successful exits and more local institutional investors to kickstart the investment engines.
  • "We have to have multiple billion dollar exits, and those will beget new companies," Kvamme said. "It takes time."

The bottom line: "The days of VC's hiding in a bunker in Silicon Valley are coming to an end," said Roy Bahat, head of Bloomberg Beta, a venture fund backed by Bloomberg LP. "If we want to realize the full potential of technology, we need people everywhere making it."

Go deeper:

Go deeper

1 hour ago - World

Israeli intel agencies believe Vienna talks will lead to U.S. return to Iran nuclear deal

Photo: DEBBIE HILL/AFP via Getty Images

Israeli military intelligence and senior officials in the Mossad briefed a meeting of the nation's security cabinet that talks in Vienna between Iran and other world powers will lead to the U.S. returning to the 2015 nuclear deal, two officials who attended the meeting told me.

Why it matters: The Israeli government is very concerned about a U.S. return to the nuclear deal and is trying to convince the Biden administration not to take the pressure off the Iranian regime.

Latino community of 13-year-old killed by police in Chicago reels after shooting

A small memorial of flowers and candles to Adam Toledo in Chicago. Photo: Kamil Krzaczynski/Getty Images

Residents of Little Village, a well-known and predominantly Latino neighborhood in Chicago, are grieving the death of Adam Toledo, a 13-year-old Mexican American boy from the neighborhood who was shot and killed by a police officer on March 29, NBC News reports.

Why it matters: Adam Toledo's killing shines a spotlight on police shootings of Latinos, who are killed by law enforcement at the second-highest rate after Black Americans, according to data from the Washington Post.

Super typhoon Surigae explodes to Cat. 5 intensity

Super Typhoon Surigae seen on satellite imagery Saturday morning east of the Philippines. (CIRA/RAMMB)

Super Typhoon Surigae surged in intensity from a Category 1 storm on Friday to a beastly Category 5 monster on Saturday, with maximum sustained winds estimated at 190 mph with higher gusts.

Why it matters: This storm — known as Typhoon Bising in the Philippines — is just the latest of many tropical cyclones to undergo a process known as rapid intensification, a feat that studies show is becoming more common due to climate change. It weakened slightly, to the equivalent of a strong Category 4 storm, on Sunday.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!