New England was a tough place to get funded in the first quarter of 2008. Venture capitalists in the region cut Q1 spending by 27% from a year ago. The retreat by the New Englander investors was much sharper than by their non-New England colleagues who cut their spending just 2%. As a result, New England’s share of venture capital funding declined from 13% of total US funding in Q1 2007 to 10% in the first quarter of this year.

Do the cutbacks anticipate a tougher economic slowdown in the Northeast? Have New England entrepreneurs suddenly become less clever? Or is it just a dose of Yankee conservatism? Whatever the reason, the tighter purse strings won’t help New England innovators catch their rivals elsewhere.

Prof. Ross Gittel has published an article on the subject called “Demographic Demise” in the New England Journal of Higher Education. The University of New Hampshire professor shows that the New England states held six of the bottom ten rankings in young adult population declines (population ages 25-34) over the years 1990 to 2004. Gittel notes that this young cohort shrank by more than one-fifth in each of the New England states. His data show that while more than 6% of US full-time students go to college in New England, a decade later only 4.5% of 25-34 year-olds live here. He cites a 2003 study by the Boston Chamber of Commerce and the Boston Consulting Group which determined that half of the area’s college graduates get their diplomas and then leave the area – believing the attractions and opportunities were greater elsewhere.

The shrinking New England share data become really painful when we look at two high profile examples of lost opportunities. In 1974 amid rising oil prices and the Vietnam War, Bill Gates left New England to start Microsoft. Thirty years later, in 2004, with the Internet struggling with its recession, Mark Zuckerberg left New England, got angel financing for Facebook in California and founded his company in Palo Alto. Today the web sites of these two New England collegians account for 4% of all time spent online in the US, with this share more than doubling in the last year and growing at rate of 7% per month. Now, Microsoft employs more than 47,000 people in the US and Facebook plans to double its number of employees to 700 this year.

Ouch!


Analyze more domains: + +

Done reading? subscribe: To get an automatic feed of all future posts subscribe here, or to receive them via email enter your email address in the box in the right column.

Link to This Post:     


Comments

RSS feed for comments on this post.
  1. Kango Ling

    You know, it is way easier to get hold of VC funding if you’re in the Bay Area. I’ve seen people who have virtually nothing except good relations in San Francisco, and they’re running web sites with no potential whatsoever, and yet a couple of million dollars is a breeze. What i’m trying to say is that when there’s another dotcom cash, you might want to be an entrepreneur or a VC fund who stayed in new england, beacuse maybe the lower funding level there reflects reality, as opposed to the dangerously optimistic levels of funding in Silicon Valley.

  2. Search Engine Optimization Journal

    Being from New England, we can understand why those who grow up here or go to school here — leave as the opportunites do seem greater elsewhere. Interesting to see the data to back it up.

  3. ARTI

    The University of New Hampshire professor shows that the New England states held six of the bottom ten rankings in young adult population declines (population ages 25-34) over the years 1990 to 2004. Gittel notes that this young cohort shrank by more than one-fifth in each of the New England states.

  4. sex shop

    What i’m trying to say is that when there’s another dotcom cash, you might want to be an entrepreneur or a VC fund who stayed in new england, beacuse maybe the lower funding level there reflects reality, as opposed to the dangerously optimistic levels of funding in Silicon Valley

  5. مركز تحميل

    thankx

  6. louis vuitton

    dangerously optimistic levels of funding in Silicon Valley

  7. louis vuitton

    in California and founded his company in Palo Alto. Today the web sites of these two New England collegians account for

  8. louis vuitton

    ten rankings in young adult population declines (population ages 25-34) over the years 1990 to 2004. Gittel notes that this young

  9. louis vuitton

    use maybe the lower funding level there reflects reality, as opposed to the dangerously optimistic leve

  10. louis vuitton

    -olds live here. He cites a 2003 study by the Boston Chamber of Commerce and the Boston Consulting Group which determined

  11. louis vuitton

    relations in San Francisco, and they’re running web sites with no potential whatsoever, and yet a couple of million dollars is a breeze. What i’m trying to say is that when there’s another dotcom cash, you might

  12. louis vuitton

    by more than one-fifth in each of the New England states. His data show that while more than 6% of US full-time students

  13. شات

    اكثر من رائع ياصديقي تستحق الامتياز


Have something to say? Leave a Comment

Get the comments RSS feed, instant notification of new comments

Latest Blog Posts:


Nov 6: Dicing into Facebook Ads
Nov 5: “Game Over” for Wii?
Nov 4: Want a Tip about Podcasting? Digital 180 Speaks with Tippingpoint Labs’ Chief Strategy Officer
Nov 3: More Castrol Traffic No Fantasy
Nov 2: Digital 180 Speaks with Espresso’s Managing Director Marta Kagan
Oct 30: Apple Having a Little Fun
Oct 29: HTC Poised to Grow as Smartphone Market Expands
Oct 28: Getting The Most Out Of Compete PRO : Keyword Destination Reports
Oct 27: Walmart and Amazon declare war : Online Retailers Fight for Book Sales
Oct 26: Clicking Their Way to Home Improvement: How Consumers are using the web in home improvement projects
Oct 23: Ads That Reject The Click
Oct 22: September Search Share: The Bing train keeps rolling but not at Google’s expense
Oct 21: The Economy Helps Boost the Prepaid Market
Oct 20: Browsers for Food
Oct 19: September search term biggest movers are here!
Oct 16: Can Microsoft’s Zune HD challenge the iPod?
Oct 15: The Dove Soap Bubble
Oct 14: Sept Data is Live: 2009 is BIG for Back to School
Oct 12: Sweetness! Compete PRO just got that much better!
Oct 9: Toyota Spending Big to Get Off the Sidelines