Feb 26, 2025
The US East Coast is emerging as a key hub for experts launching their first VC funds
Allocator One aims to anchor the top 3% of emerging venture managers globally, with a sharp focus on first- and second-vintage funds. We achieve this by tapping into one of the world’s largest and most alpha-rich pipelines of emerging fund managers—where "alpha" stems from their ability to consistently outperform the market through superior deal flow, deep industry insight, and the pattern recognition that comes from years of hands-on experience and highly connected networks.
In just 12 months, we have had the opportunity to evaluate 149 funds from the United States alone—something we are truly grateful for, as it allows us to recognize and support emerging venture talent. These talented GPs bring fresh perspectives, domain expertise, and a relentless drive to identify and back transformative companies. They are usually former operators, industry insiders, or experienced investors with a unique ability to access high-quality deals, build strong founder relationships, and navigate complex market dynamics with agility. This depth of insight allows us to spot the most promising emerging fund managers before the rest of the market even knows their names.
While California—the edge of America—has long been the epicenter of entrepreneurial ambition, a new trend is reshaping the landscape: the U.S. East Coast is fast becoming a powerhouse for company building and venture activity. The landscape is shifting, and we are ahead of the curve.
Our proprietary data, which covers 75% of the world’s emerging funds (defined as sub-$50m first- or second-time funds launched by specialist managers) in 2024, shows that the East Coast is home to 8% of all first-time funds. New York and Boston are each home to around a third of these funds, while the remaining funds are dispersed among smaller cities.
Even more interestingly, the number of emerging funds we hear from that are based on the East Coast is skyrocketing, rising 3,500% between Winter 2023 and Winter 2025. This tells us that the East Coast is becoming a serious contender against the historically dominant West Coast — and that the time to invest is now. While New York and Boston’s venture capital scenes remain smaller than US West Coast hubs, they also have the opportunity to capture more value, identifying the best local deals and with limited competition for them — for now.
The signs are pointing in the direction of growth. In early 2023, Washington, DC and New York became the hottest markets for tech hiring, with more job openings for software developers than California, according to the Wall Street Journal. A report by SignalFire, meanwhile, found that workers leaving the San Francisco Bay Area were most likely to move to New York, while a network of founders from Europe — who feel more at home on the East Coast than the ultra-American west — has also been growing.
Here are some of the highlights from our research, as well as the emerging trends we’re seeing.
Data highlights
32% of emerging East Coast funds are based in New York.
45% of emerging East Coast funds are managing between $10-25m, reflecting the US’s significant capital availability compared to other regions.
AI and automation in industry is a focus for 15.4% of new funds launching.
"The East Coast is rapidly becoming a hub of emerging fund managers. With a deep talent pool, strong institutional backing and a thriving startup scene, it’s no surprise more GPs from the region are launching their first funds." — Iliana Oris Valiente, Allocator One Investor, and Managing Director and head of NA Innovation Centers at Accenture
1. First-time funds start with a bang on the East Coast
While the West Coast is home to the world’s largest VC brands, Allocator One data shows that the East Coast is defined by smaller, specialised funds. These emerging GPs still enjoy the might and network effects of the US startup ecosystem though, and first-time funds are typically larger than we see in other markets. While the majority (85%) of funds focus on pre-seed, seed and Series A stage startups, we also see a significant chunk of funds (45%) managing between $10-25m. This puts them in a sweet spot for early-stage investing — with enough capital to drive competitive deal making, but not so much that they are competing with large, institutional funds. They can also act quickly, with 85% of all emerging East Coast funds being run by solo or partnership GP teams.
2. Cutting-edge applications drive interest among East Coast GPs
On the East Coast, emerging funds demonstrate a clear preference for technologies and applications that push the boundaries of innovation.
AI and automation in industry: Startups that apply AI to business functions like supply chain operations, logistics and finance are a focus for 15.4% of emerging fund managers.
Fintech and blockchain: More than 11% of emerging funds are interested in backing financial infrastructure startups that are modernising the financial system, including those working on digital banking and blockchain.
Health and biotech: A number of emerging funds are leveraging proprietary AI to identify biotech startups with solutions that could be as scalable as SaaS, with 15.4% citing health and biotech as a focus.
Consumer technology and the creative economy: The East Coast is already a hub of creative industry activity, and 11.5% of emerging funds are looking for media, entertainment and tech-enabled consumer brands that leverage the cultural trends emerging from influential cities like New York.
Deeptech and dual-use technology: One in 10 emerging funds on the East Coast is investing in deeptech and dual-use technologies at the intersection of advanced technology and government applications.
3. Impact and high-tech solutions are top of mind across multiple sectors
Beyond the core sectors outlined above, East Coast VC strategies are defined by their interest in impact, efficiency and sustainability, cutting across the themes they invest in.
AI for the physical world: AI-driven automation for industries like healthcare, finance, and supply chain management is a growing priority.
Sustainability and supply chain resilience: There is a focus on de-risking logistics from both a sustainability and a geopolitical lens, using AI and data-driven solutions.
Early-stage commerce infrastructure: Investors are looking for the next wave of B2B commerce infrastructure startups.
Impact investing: Funds like Harper Ventures in Boston are leading investments in projects that contribute to improving economic mobility, education outcomes and healthcare advancements for all consumers.
GPs at emerging funds backed by Allocator One have invested in East Coast startups working in specialist themes such as the agentic AI startup Beam, and Better & Better, a consumer products brand focused on oral health.
“The future of tech is decidedly outside Silicon Valley. Ecosystems like New York, Boston, Miami and Toronto have all seen incredible growth from emerging managers over the years; it’s great to see the A1 continue to scale its platform in these important regions.” — Alex Lazarow, Managing Partner of Fluent Ventures, a global VC, and author of Out-Innovate (HBR Press)
4. Case study: Dark Pool Capital
Dark Pool Capital is an example of the new wave of high-calibre emerging venture funds launching out of the US. Founded by Jay Aurora and Eve Denton in 2024 and still operating under the radar, the fund specializes in direct secondaries in scaled businesses across software (including AI), fintech, marketplaces, and consumer internet.
Before starting his own VC fund, Aurora was a senior investor at G Squared, a $5B late-stage VC fund based in the US that he began working with in 2018. Prior to that, he was an investor at Industry Ventures, an $8B secondaries focused VC fund, and an investment banker at Moelis & Company in NYC.
At Dark Pool Capital, Aurora will leverage his expertise to invest in top decile venture backed companies that are 1-4 years away from IPO, opportunistically investing via secondaries by providing liquidity to early employees and investors, and execs.
“The East Coast continues to be the epicenter of institutional capital, with a growing interest in emerging managers, who bring fresh perspectives and innovative approaches to investing,” says Aurora. “The region also continues to be a growing market opportunity for us as the startup ecosystem matures. Many funds invested in high-profile unicorns and early employees are seeking liquidity given the lackluster IPO market.
