Why is this important?
Tracking VC investment represents trends in cash flows into the region for potentially high-value business opportunities. In addition to capital, these flows represent access to talent and other forms of support.

How are we doing?
VC investment in Long Island increased nearly threefold from 2009 to 2010 to $21.4 million, surpassing investment levels of the preceding three years.  But first half 2011 figures were 80 percent below those of 2010 at $4.5 million.  As of July 2011, Long Island has attracted $5 million in VC funding in the first half of 2011 which lags the $21 million garnered in the first two quarters of 2010. 

The year 2000 marked the peak of the information technology-driven economic bubble and also the peak of national VC investment.  In most places, VC investment has not recovered to those levels in the overheated economic context and therefore comparisons are not very useful. 

Over time, the distribution of investment shifts across industries as technology advances and regional strengths change.  The software industry continues to comprise a large portion of venture capital investments on Long Island, accounting for 46 percent of total investment in the most recent period.  Media and Entertainment followed with 27 percent after a dearth of investment between 2003 and 2008.  Biotechnology remains a vital sector attracting 13 percent of investment.  Financial Services accounted for 12 percent of the region’s VC, a jump from earlier periods.

Over the past decade VC investment has fluctuated nationwide.  The year 2000 marked a boom in investment followed by a drastic bust.  While investment is not likely to return to boom-time levels, regions are eager to see signs of progress in the attraction of VC dollars.  From 2005 to 2010, nationwide investment fell eight percent while some regions enjoyed gains.  The San Francisco region witnessed growth of 23 percent while New York State and Research Triangle witnessed growth of 13 and 16 percent respectively.  VC investments fell 87 percent from 2000 to 2005 in Long Island and dropped 54 percent between 2005 and 2010.