More than half of all venture capital dollars invested in small businesses and startups during the first three months of 2018 went straight into the state of California, according to a recent investment report from PwC and CB Insights suggesting the vast majority of business investment in the U.S. is concentrated in only a few states.

Venture capital investments climbed 4 percent during the first quarter to $21.1 billion, and more than $11.5 billion of that funding went to California-based businesses. Given the state's thriving tech scene, large population and access to Silicon Valley and the San Francisco Bay Area, it is perhaps unsurprising to see the Golden State emerge from the first quarter with the country's top spot.

Massachusetts narrowly edged out New York for second place, with the states attracting more than $2.6 billion and nearly $2.4 billion in venture capital investment, respectively. Texas placed fourth with $747 million – roughly one twenty-eighth of the money invested in California businesses.

The San Francisco Bay Area alone attracted nearly $6.4 billion in venture capital funding, while Silicon Valley brought in more than $2.9 billion and the Los Angeles/Orange County region received nearly $1.9 billion. The entire Northwest portion of the U.S., including Oregon, Idaho, Wyoming, Montana and Washington, attracted less than $370 million in venture capital funds.

All told, the four largest states for venture capital – California, Massachusetts, New York and Texas – attracted more than $17.3 billion in funding during the first three months of the year – representing more than 82 percent of all venture capital investment made during the first quarter. Massachusetts has developed a reputation as an innovation hub in New England, and California, New York and Texas each rank among the top five states in the U.S. in terms of population size and economic output.

The report indicated that no venture capital activity was reported in nine states, including West Virginia, Mississippi and Alaska.

"There's all this money seemingly sloshing around, but out of all the small businesses in America, only a very small sliver gets it," Javier Saade, a venture partner at Fenway Summer Ventures, said Wednesday during a small business event hosted by The Hill media outlet in Washington, D.C. "It's New York, Massachusetts – and California is half of the venture capital managed and half of the venture capital invested."

Top 10 States for Venture Capital Funding



State Venture Capital Funding ($ Millions) Individual Deals Average Deal Value ($ Millions) California 11,579 513 22.57 Massachusetts 2,629 110 23.9 New York 2,357 170 13.86 Texas 747 55 13.58 Florida 511 20 25.55 Maryland 405.9 16 25.37 Illinois 375 36 10.42 Colorado 337 37 9.11 New Jersey 314.9 10 31.49 Washington 289 30 9.63



Also worth noting is that of the more than 1,200 venture capital deals announced during the first three months of the year, 513 involved businesses based in California. New York boasted 170 deals, while Massachusetts and Texas followed with 110 and 55 deals, respectively.

Nationally, the average individual venture capital deal was worth more than $17.5 million. California's deals were slightly above average at nearly $22.6 million, but Massachusetts, Maryland, Florida, New Jersey and Oklahoma all had larger average venture capital deals than the Golden State. A single venture capital investment in Oklahoma totaled nearly $43 million, effectively inflating the state's average.