Pittsburgh business leaders have spent years fretting about the dearth of start-up capital to support new companies. After all, if a former Rust Belt region is to give Austin, Boston and Silicon Valley a run for their money, fledgling businesses here would need, well, plenty of money of their own.
Recent reports, including one released last Thursday, show the metro area doing very well at attracting investment, which suggests that entrepreneurial brain power, technology development efforts, national marketing and a positive Pittsburgh “buzz” are having the right impact on deep-pocketed investors.
Last year 107 companies in the region drew $338 million in investments in 148 deals, according to a report jointly produced by Innovation Works, a state-funded investment initiative that supports technology businesses, and the accounting firm of Ernst & Young.
In fact, the CEO of Innovation Works, Rich Lunak, said the rate of growth over the last five years in venture capital invested in Pittsburgh was double the national rate: 112.9 percent versus 54.6 percent. That’s an impressive increase but, compared to the nation’s better-known high-tech corridors, southwestern Pennsylvania is still playing catch-up when it comes to hard dollars. While Pittsburgh measures its annual start-up capital in hundreds of millions of dollars, Boston tallies it in the billions.
Still, Pittsburgh was ranked 13th in the nation last year for start-up capital investment in an index maintained by the National Venture Capital Association in Arlington, Va. That was a substantial jump from 26th in 2012.
The amount of early-stage investment in Pittsburgh may have been small years ago, but now it is taking off. With consistent support from state-backed initiatives like Innovation Works, commercialized technologies spawned at local universities and business policies conducive to start-ups, these dollars committed to the region will continue their upward curve.