State ranks high in jobs seeded by venture financing

Some of Washington’s best-known brands — Starbucks, Microsoft and Amazon.com — got an early lift from venture financing.

Employment and revenue at those companies and many others helped the state rank high in a study released today of the economic impact from venture-capital investment.

Washington was third among all states in 2005 revenues generated by venture-funded companies based here. It had $127.4 billion, behind only California and Texas.

Its venture-backed companies employed 444,463 people nationwide in 2005, more than all but six other states.

The study, by economic analysis and forecasting firm Global Insight, looked at almost 23,476 U.S. companies that received venture funding between 1970 and 2005.

During that period, 654 Washington companies attracted $11.5 billion in venture funding, roughly 3 percent of the national total.

In 2005, that investment resulted in $2.1 trillion in revenue nationally, about 16.6 percent of U.S. gross domestic product, and 10 million jobs, roughly 9 percent of the U.S. private sector.

“Venture capitalists have provided the U.S. economy a reward far beyond their investment of money and time in these companies,” the study’s authors wrote.

Also, from 2000 to 2005, venture-funded companies had faster annual sales and employment growth than companies that had not received venture funding.

The National Venture Capital Association, which funded the study, pointed out the issues it sees as critical to a continued healthy climate for venture investment.

In a statement, association President Mark Heesen listed “support for our capital markets, funding for basic research and development, increases in H-1B visas, and more math and science graduates.”

Benjamin J. Romano: bromano@seattletimes.com