# California still dominates technology’s nectar: venture capital

> Source: <https://www.mercurynews.com/2026/07/17/california-still-dominates-technologys-nectar-venture-capital/>
> Published: 2026-07-17 14:42:01+00:00

**Getting your**

[Trinity Audio](//trinityaudio.ai)player ready...One reason California’s economy succeeds despite the numerous hurdles it puts in front of industry is that it’s the king of venture capital, the nectar of big-scale business breakthroughs.

Investors offered young U.S. companies a total of $589 billion in much-needed seed money in the year ended in June, according to my trusty spreadsheet’s [peek at PitchBook reports](https://pitchbook.com/news/reports/vc).

During those 12 months, Bay Area-based companies got $411 billion of these investments, primarily to fund the battle for artificial intelligence supremacy. That’s 70% of all VC funding, which spurs immediate business activity that could produce the next corporate giant or two.

Meanwhile, Southern California got $21 billion, or 4% of all venture capital investments. That may seem small, but only New York City got more: $45 billion, or 8%. Boston was No. 4 at $20 billion, or 3%.

This cash inflow seems to be a ringing endorsement from smart investors taking rather large risks: California ain’t perfect, but if you want to change the business world, it’s the place to be.

#### Fast growth

Look at the impact of this innovation mindset on California’s economy, as reflected in the [calculation of gross domestic product](https://www.bea.gov/data/gdp/gdp-state).

California has averaged 3.7% growth in this broad measure of business output over the last 20 years. That’s the seventh-fastest jump among the states and well above the nation’s 2.1% expansion pace.

The “information” industry, an economic niche dominated by tech-savvy folks who attract all that venture capital, accounted for 30% of California’s GDP growth since 2006. Nationally, information was only 16% of U.S. GDP growth.

The information industry was more important to growth in just two other states: Connecticut, with a 45% share of its meek 0.8% historic annual expansion pace, and Washington state, with 35% of its 3.7% growth – second-fastest among the states.

And in 2026’s first quarter, when California’s 3.7% GDP growth ranked second-best among the states, [the highest ranking since 2013](https://tinyurl.com/ca24gdp), information was tied to 36% of the Golden State’s business output.

*Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com*