Things are picking up in venture capital, and nowhere is that more true than in Silicon Valley.
Venture firms nationwide invested $7.8 billion in 1,005 startups in the third quarter, according to the latest MoneyTree Report, compiled by the National Venture Capital Association and PricewaterhouseCoopers using data from Thomson Reuters.
That was a 12 percent increase in terms of dollars and a 5 percent hike in the number of deals compared with the second quarter.
Nearly half that money went to companies in Silicon Valley, whomping runner-up New England's 11 percent of the haul. No other region broke double digits.
With that trend holding true year after year, it may be time to retire long-voiced worries that the Bay Area, plagued by high costs and heavy traffic, could be overtaken by other tech hubs like Austin or New York.
"I don't see any risk that what makes the valley special is going away," said Ashu Garg, a partner at venture firm Foundation Capital.
Garg spent years working for Microsoft and, as a VC, has done a number of deals in India. Despite robust educational systems and large consumer markets, Garg said, Seattle and Mumbai lack what he called the valley's most unique ingredient.
"When a founder or CEO needs advice, there are 10 or 12 people they can call who have seen the movie," he said. "No other area has that concentration of talent."
Jeanne Harris, a managing director at Accenture's Institute for High Performance in Chicago, spent three months in the valley trying to quantify what keeps it churning out new companies.
Harris, who's often asked by officials in other countries how they can create their own Silicon Valleys, was surprised by how extensively the attitudes of tech workers here vary compared to elsewhere. "On a list of 50 variables, people in the valley differed from the rest of the country on 47," she said.
Those factors range from higher-than-average levels of optimism and ambition to the valley's famous celebration of failure.
Harris also noted the region's mix of ethnicities and nationalities: About 50 percent of science and engineering professionals here, she said, speak a language besides English at home. The resulting melting pot is both welcoming of new ideas and hard for other places to copy.
Not that others haven't tried. In recent years, for instance, the coastal neighborhoods of Los Angeles have recast themselves as Silicon Beach. It's now home to hot startups like Snapchat and The Honest Co., launched by movie star Jessica Alba.
"You're not competing with Google (GOOG), Facebook and everyone for talent," said Darren Berkovitz, co-founder of a Marina del Rey startup called TeleSign that helps large Web companies verify users' identifies via mobile phone.
"The flip side," he acknowledged, "is there's less talent." Indeed, TeleSign just opened a Sunnyvale office because so many of its clients are valley-based.
While Berkovitz decries the valley's outsized costs and "more cutthroat" pace, tech investor Salil Deshpande said he's backed companies all over the world and hasn't found anyplace that beats the Bay Area for innovation.
"It's the mindset, the thought process," said Deshpande, a managing director at Bain Capital Ventures in Palo Alto. "That's why although successful, feasible, realistic ideas come from all over, the crazy, wonderful, delightful, brilliant, stunning, brash ones come from the valley."
Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.