All's well in New Jersey's VC land

Dateline: Princeton, New Jersey

Your roving reporter brings more news from our southern neighbour. With street names such as Sand Hill Road and a development called Menlo Park, it should come as no surprise that New Jersey is one of America’s more successful venture capital centres.  Here’s a precis on why:

• New Jersey has more scientists, engineers, and technicians per capita than any other state
• 40% of all new drugs approved by the US FDA originate in New Jersey
• Approximately $600 million of Federal R&D expenditures are granted annually to New Jersey universities and colleges
• New Jersey has an extremely well-educated work force, with the second-highest per capita income in the country
• New Jersey represented $49.6 billion of national revenues at venture-backed companies in 2003
• Cumulative venture capital investment in New Jersey totals $13 billion

Craig and I were meeting some investors and companies in advance of today’s New Jersey Technology Council Venture Conference. The mood is good, deals are closing again, funds expect to raise new capital in 2010, and portfolio companies are feeling much better post-Summer 2009. And they have every reason to feel chuffed. According to the Q4 2009 PWC MoneyTree report, the region of NY Metro (which includes Northern NJ) came third for new venture capital deployment in the USA, attracting US$466 million across 66 new deals; that’s an average cheque size of US$7 million, well above the national average of US$6.3 million. N.J. snared a 9.3% market share of the US$5 billion of VC capital that was deployed in the fourth quarter.

New Jersey has its own $80 million, 2003-vintage NJTC Venture Fund (now fully-invested), which counted the Royal Bank of Canada and TD Bank as limited partners. Some of the same fellows who are in the 2007-vintage Ontario Venture Capital Fund

Not to mention the fact that New Jersey tech cos and VC firms have their own political action committee, which supports legislators who are supportive of technology initiatives. Although Canada doesn’t allow PAC vehicles, there’s something to be said for Canadian entrepreneurs and VC firms getting better coordinated when it comes to messaging their government representatives.

Something is definitely working. Lots to learn from New Jersey.

MRM