Steve Case’s Revolution LLC is predicting the D.C. region will raise about $1.1 billion in venture cash this year, an aggressive forecast that would outpace the VC totals of recent years.
In the first three quarters of 2012, D.C.-area companies raised $630 million, according to MoneyTree data provided by PricewaterhouseCoopers’ and the National Venture Capital Association (NVCA). Even including the fourth quarter fundings — slated to be released this week — it’s unlikely that we’ll hit the $1 billion mark this year, at least by PWC’s calculations (they have a very specific methodology — and often don’t count big-ticket private equity deals). The region hasn’t crossed that threshold since 2008, when it amassed $1.13 billion.
Case, co-founder of AOL, is among D.C.’s most prominent startup investors, both through his early-stage Revolution Ventures and the expansion stage Revolution Growth, a $450 million fund he launched with Ted Leonsis and Donn Davis in late 2011. The latter initiative is dedicated chiefly to non-Silicon Valley deals, aligning with Case’s “Rise of the Rest” philosophy (h/t Fareed Zakaria).
He delivered his prediction for D.C.’s 2013 venture haul, and that of other markets, as part of a presentation and conference call with reporters on Monday. A Revolution spokeswoman said the figure represents an internal projection at the firm, based on the most recent full-year data from NVCA.
Why is Case so bullish? His prediction of a rising tide of non-Valley entrepreneurship is based partly on the idea that technology has broken down old geographic barriers, so founders no longer need to move to Palo Alto, Calif., and can instead build regional startup hubs.
“Before, if you were an entrepreneur growing up in Des Moines for example, you might feel like you had to move to Silicon Valley in order to raise the capital necessary to put your idea on the field,” Case told reporters. “That’s beginning to shift, [and] I think that will accelerate in the years to come as investors start going where the opportunities are, as opposed to forcing the entrepreneurs to go where they happen to be.”
His bullishness is also based on the successful implementation of equity crowdfunding, which, considering SEC rule-making delays, is looking less and less likely to make an appreciable dent in startup fundraising this year. On this matter, you guessed it, Case is also optimistic.
Someone mark their calendar. Remind me to revisit this prediction on Jan. 15, 2014.