Business - Access to Capital

Massachusetts continues to rank first in the nation for Venture Capital awarded on
a per capita basis.

Massachusetts companies have ample access to capital.  Whether through the Small Business Innovation Research (SBIR) Program, federal R&D expenditures, or venture capital, Massachusetts companies are able to access high levels of capital.

Massachusetts companies were awarded over $242 million in Small Business Innovation Research (SBIR) Program in 2005, accounting for 12.5% of the total grants awarded.  There were 512 phase one grants awarded as well as 231 phase two grants, creating an average per capita value of $2.9 million and $922,000 in Massachusetts respectively.  On this per capita basis, Massachusetts outperforms Virginia by a factor of 2.5 and California by a factor of 3.5.  As such, Massachusetts companies attract a major share of R&D funds available under the program. 

Federal R&D expenditures are also at a disproportionately high level in Massachusetts.  In 2003, Massachusetts’ share of federal R&D expenditures represented 5.6% of the total, increasing in absolute terms to a new high of $5.2 billion.  Massachusetts has the highest per capita percentage of federal academic nonprofit research and health and human service R&D expenditures in the nation.

Venture capital also helps to drive Massachusetts’ innovation technology.  In 2006, over $2.8 billion of venture capital was invested in Massachusetts in 368 separate deals.  This high level of venture capital in Massachusetts represents 11.1% of all investment and 10.8% of all venture capital deals in the United States.