Capital in the Capitol

As we kick off the summer of 2024, we thought it important to take a hard look at the status and trends in the emerging company (EC) and venture capital (VC) markets in the District of Columbia (D.C.) as it compares with other large U.S. EC/VC ecosystems.

With the expansion of private capital markets, established venture capital ecosystems have grown and new hubs have emerged worldwide. Although the past decade has seen strong growth, the VC landscape has experienced a shift over the last two years contributing to a decrease in available capital.

As securing capital has grown more difficult, LPs, GPs, and founders are carefully considering where to invest their resources for long-term success. Macroeconomic factors are influencing these decisions and various locations present promising investment opportunities. This article highlights the District of Columbia’s ranking in this ecosystem based on overall development and relative growth rates.

Researchers assessed and assigned each primary market a development score and a growth score. The development score was given based on size and maturity, and out of the top VC markets, D.C. ranked No. 12 globally and No. 5 in the U.S. The table below details the evaluation data for the period from September 2017.

	Deal Value (US $bn)	Deal Count	Exit Value (US $bn)	Exit count	Fund Value (US $bn)	Fund Count
Washington, D.C.	$34.7	2,609	$24.9	275	$14.3	181

Major markets were also given a growth score, which captures relative growth rate activity. D.C. fell just outside of the top 20 globally. See the table below highlighting the top 10 VC markets overall based on development and growth score.

Location	Global Region
San Francisco	North America
New York	North America
Shanghai	Asia
Los Angeles	North America
London	Europe
Beijing	Asia
Boston	North America
Berlin	Europe
Shenzhen	Asia
Seoul	Asia

As the VC market continues to recover and the cost of capital falls, D.C. is positioned to grow into a market leader. The Capitol is the center of innovation in cybersecurity and national-security ventures and has become more robust with significant educational tech, financial tech, and property tech communities.

Research sourced from Patel, Nalin. “Global VC Ecosystem Rankings.” PitchBook, October 10, 2023.

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