Georgia vs. Florida – The Game of VC Financing

The Georgia vs. Florida football game is a traditional rivalry for football dominance in the Southeast. In honor of the upcoming game, let’s explore how these two states compare in creating an environment for entrepreneurs to raise venture capital.

1. Florida is one of the most populous states in the U.S. (fourth in the nation) but is lagging in venture capital investment. Q2 2014 saw 13 deals with investments around $112.9 million (a drop from Q2 2013 which saw 17 deals and $167.7 million in investments).

2. By contrast, investment dollars in Georgia rose 11% from $132.8 million in Q2 2013 to $147.3 million in Q2 2014.

3. Florida venture investing is scattered throughout the state, with key pockets of investment in cities geographically distributed from Tampa to Jacksonville to Orlando to Miami to Ft. Lauderdale.

4. The vast majority of venture investing in Georgia is centered on its capital city, Atlanta. In contrast to Florida, there is little venture investing outside the capital city, with the exception of a few companies located in Atlanta’s suburbs.

5. Atlanta’s huge advantage is infrastructure – the world’s busiest airport, major highway connections, and the center of state government. These are key factors in attracting venture capitalists and making it easier for them to work in a concentrated market.

6. By contrast, Florida has a more widely dispersed population and less concentration – resulting in less traffic congestion in its major cities but greater challenges in finding direct flights for venture capitalists, many of whom are located in Boston, New York and Silicon Valley.

7. Venture capitalists like to travel to locations that allow multiple meetings with existing and prospective portfolio companies. Atlanta affords this opportunity – Florida is more challenging and often requires travel between cities.

8. Florida does have a slight lead in one area – geographically dispersed venture funds. Although neither state has a large number of venture investment funds, Florida has several located in different parts of the state.

9. Georgia’s leading VC funds are all located in Atlanta – key players in Georgia’s entrepreneurial success.

In terms of entrepreneurial financing, Georgia is ahead of the game when compared to Florida. However, Florida has an opportunity to renew its commitment to attracting venture capital and encouraging investment in start-ups — particularly in the areas of biotechnology, logistics and software technology.

In part two of this series, we’ll explore some of the key ways that both Florida and Georgia can expand their venture investing.

Many thanks to my Morris, Manning & Martin co-authors Amie Singer, a partner in our Corporate Technology practice.