H E L P Pittsburgh

A Tale of Two Cities

Actually, it's a tale of one city, Pittsburgh, but if you read two articles published one day apart last week, you would swear they were talking about two different cities.

In Patty Tascarella's article in the current edition of the Pittsburgh Business Times, "Region's VC deals slow after after strong start to the year" she states:

"Second-quarter venture capital investments in Pittsburgh totaled a dismal $11.44 million, spread among three companies, according to a report issued this week.

That was down from the $71.5 million given to 20 companies during the same three-month period in 2005, as well as from the combined $21.2 million raised by 12 companies during the same quarter in 2004. "

While in Cori Shropshire's Bits&Bytes column from Saturday's Post Gazette she states:

"If keeping up with the Joneses, or in this case Austin, Texas, or Denver -- is important, then Pittsburgh should do just fine. . . . . . . Innovation Works [figures] show that 11 tech start-ups landed venture capital money in the first half of this year -- putting the region on pace to top last year's 14 venture capital deals.

"Even more exciting is the fact that six of the companies were first-time VC deals -- which already equals the average number of first-time VC deals that we would expect to see in the region based on the past 10 years' data," M[att] Harbaugh [of IW] said."

OK, so is our glass half-full or half empty? I believe it's actually 3/4 empty. No matter how you interpret these numbers (reference How to Lie With Statistics) they point out that very little money, $11.44M (.0018 % of the national total), was given out to only three companies during the second quarter of this year. This is an 84% drop from the same quarter last year, and almost 50% below the same time two years ago.

Pittsburgh has an abundance of entrepreneurial talent and world-class universities generating lots of commercially viable ideas for companies and products. However, our funding for these activities is on a par with the homeless people who sit beside the interstate ramps.

posted by HELP @ 10:08 AM