San Diego Attracts Investment Capital. Could more be Done?

Investment is the lifeblood of our economy that provides nourishment for our cities. Without investment we don’t grow, business doesn’t expand and people don’t get hired. Everything comes to a standstill and in and good fortune ceases. Cities like Los Angeles, San Francisco and San Diego are attracting investments to their unique industry clusters.  Letting the world know what San Diego has to offer in terms of investment opportunities can be a catalyst to greater growth.

Nationally, the last quarter experienced $13.4 billion dollars in investments and about a third of that took place in San Francisco, Los Angeles and Orange County (as cited in Somerville, 2015).  According to the Venture Capital Association and Price WaterhousCoopers a total of 19 San Diego companies received around $270 in late stage venture capital funds (Money Tree, 2015). Not the largest share but certainly a sizable one.

Much of the money comes from large institutional investors that are looking for solid growth opportunities. Of these large investment opportunities around 36% were from hedge funds and mutual funds (As cited in Somerville, 2015).  There is still plenty of room to draw new investments from international investors that are also seeking high probably income outcomes. 

Companies invest in late stage start-ups because they can reduce their risks. Another option is to invest in a basket of companies to hedge the potential of loss on any one entity. The problem is that without knowledge of local investment opportunities investors are unlikely to fulfill to help businesses reach their full potential.  

Ensuring that emerging companies are easy to find and the proper mechanisms for investment are available will help further international investment in San Diego. Ensuring information is on public display via websites, is easily accessible from outsiders and targeted to both small and large investment entities helps to keep new industries budding and growing in a way that encourages local economic development.  

 

Freeman, M. (April 17th, 2015). San Diego start-ups net more venture capital. UT San Diego. http://www.utsandiego.com/news/2015/apr/17/MoneyTree-Dow-Jones-VentureSource-ATyr-pharma/

Somerville, H. (2013). Tech companies continue to land mega VC deals. San Jose Mercury News. Retrieved http://www.mercurynews.com/business/ci_27932457/tech-companies-continue-land-mega-vc-deals

The Money Tree. Retrieved April 18th, 2015 from https://www.pwcmoneytree.com/