Massachusetts Reclaims Its Lead Over Texas in Venture Capital (Pioneer Institute)

Summary

• In the second quarter of 2026, Massachusetts startups raised about $4.7 billion in venture capital, well ahead of the roughly $2.3 billion raised in Texas.p.1
• For the first half of the year Massachusetts pulled back in front of Texas, $10.2 billion to $8.4 billion.p.1
• Massachusetts companies raised about $5.3 billion in the first quarter of 2026 and about $4.7 billion in the second.p.3
• In 2018 Massachusetts out-raised Texas by roughly two and a half to one, and by 2025 the margin had narrowed to roughly 1.4 to one.p.3
• In the first half of 2026, U.S. venture investment reached a record $412.7 billion, with 87.5 percent of all dollars going into rounds of at least $100 million.p.4
• About 86 percent of all U.S. venture dollars in the first half, some $355.9 billion, flowed to artificial intelligence.p.4
• From January 2020 to September 2025, the Massachusetts business base grew just 13.0 percent, compared with 31.1 percent in North Carolina.p.2

Key insights

1. Massachusetts performed about 7.3 percent of all U.S. business research and development in 2023.p.1
2. Between 2010 and 2019 Massachusetts had the second-highest average quarterly net formation rate in the country, and its decline since 2020 is more than five times larger than that of the next-closest state.p.2
3. Net business formation gains of 69 in the fourth quarter of 2024 and 519 in the first quarter of 2025 recover only about 3.4 percent of the nine-quarter shortfall.p.2
4. Manufacturing employment in Massachusetts fell from about 244,200 in 2019 to about 226,600 in 2025, roughly 7 percent.p.3
5. In the first quarter of 2026 Texas out-raised Massachusetts, $5.8 billion to $5.3 billion.p.3
6. A National Venture Capital Association study of more than 67,000 venture-backed companies found employment growing about 960 percent from 1990 to 2020.p.4
7. The Massachusetts first-half total of $10.2 billion is about 2.5 percent of national venture investment.p.4
8. Only about 0.5 percent of new startup businesses turn to outside equity such as venture capital.p.5
9. North Carolina cut its flat personal income tax rate from 5.8 percent to 3.99 percent and its corporate rate from 6 percent to 2 percent.p.6