Entrepreneurship and Venture Capital in New Jersey, Part 1
Beginning to map out The Garden State's Startup Ecosystem
I’m an entrepreneur and investor, and I recently moved out of the city back to my home state of New Jersey (down The Shore!, specifically) during the COVID-19 pandemic. Over the past few weeks I have spent my days speaking to entrepreneurs during the day while looking out over the boardwalk and onto Atlantic Ocean. I’ve gotten to reconnect with my Jersey roots and take in some of the local culture as restaurants and bars slowly begin to open up, serving up the state’s best pizza, pasta, cocktails, and ice cream.
And I find myself thinking: why is there no bustling entrepreneurial hub in New Jersey? This state is awesome. The public schools and Universities here are top tier and the state is extraordinarily dense, packed with some of the most talented engineers and businesspeople in the world. Governor Murphy has made some efforts to attract venture capital (VC) to the state through his New Jersey Innovation Evergreen Fund. The state is highly livable: cheaper than New York, full of great food and cultural landmarks, and close enough for a day-trip to NYC.
And yet the data on New Jersey, VC, and startups is depressing. While New Jersey was among the top five states for venture investment in 2008, by 2018 it had fallen to 15th (NYT). Between 2004 and 2017, New Jersey experienced a 4% increase in VC investment, compared to New York’s 1,910% increase. And in 2017, New Jersey received just $781 million in deal flow investments in 2017, while New York received $8.97 billion (New Jersey Business).
New York City has a lot to offer - but is it really that much more attractive to entrepreneurs? I think of the entrepreneurial hubs that have sprung up over the past decade -- Austin, Texas; Los Angeles, California; Boulder, Colorado. What do those cities have that my home state does not?
I aim to figure this out in the coming weeks, and to propose some solutions to fix it. I’m starting by looking at a a few of the top US states for entrepreneurship and VC, and comparing them to New Jersey. You can check out my first draft below. So far, I’ve aggregated data from the National Venture Capital Association (NVCA) 2019 Yearbook across 7 states plus New Jersey. As you can see, over 2019 New Jersey had a fraction of active investors, VC assets under management, and VC capital raised compared to the other states listed.
You’ll also notice a few empty rows. These are a few categories I hope to dive into in the coming days and weeks. I hope this work will begin to illuminate the obstacles which have prevented New Jersey from evolving into a top tier hub for entrepreneurship, and bring to light some strategies to achieve that goal.
I believe that business and in particular small businesses and startups can be a force for good in the communities in which they are founded. I want to build a strong foundation to support entrepreneurs in bringing this good to the state I love. I look forward to learning and writing in the coming weeks. Please feel free to leave comments and questions below!
Great first post! Excited for the next one