On Monday night I went to a holiday party for a Boston-based VC firm, which was held in New York, and without warning the managing partner approached me and began promoting the Boston venture capital market.  He brought up the recent Endeca acquisition, he pointed out the long legacy of Boston IPOs, and he finished his monologue with the comment that Boston is the hottest venture market on the east coast.

I looked at him and said, “Then why are you holding your holiday party in New York City?”

Boston and New York are longstanding rivals, particularly in baseball, but only recently has the competition intensified in the venture capital business.  I have a point of view because I have spent an equal amount time living and working in both markets over the last 15 years.  I lived in Boston from 1997-2004, went to college in Boston, and spent three years working for a Boston-based VC fund.  I moved to New York in 2004 for graduate school and have been here since, working for Greycroft.  Prior to that I grew up in Ohio so I have no particular bias for either city and I have an irrelevant sports affiliation (“Go Cleveland Indians!”), so you will have to trust that I am a semi-impartial observer who just happens to live in New York.

Boston has a long track record for building great start-ups, and the venture industry there is much larger than the venture business in New York.  I spent three years in Boston covering all sorts of industries, from fuel cells to biotech to networking components.  I had meetings in head-to-toe hazmat suits while companies manufactured optical switches in the next room.

Seven years ago I traded in the hazmat suit for a tailored suit and as a New York VC I have met with thousands of companies in adtech, ecommerce, marketing software, financial services, and consumer Internet.  These sectors enjoy specific advantages in New York, and as a result we are capturing a lot of this innovation here.

For those who doubt the advantages of being based in New York, here are a couple data points:

1.) 70% of the media in the US is purchased from the island of Manhattan. I have not seen an adtech company (or an ad-supported business) become successful without opening a New York office.

2.) 45 of the Fortune 500 companies are based in New York City (by comparison Boston has only two).  You can build a field sales team anywhere, but there are advantages to seeing your clients more frequently.

3.) While Boston is generally regarded as a college town, there are 40 more colleges in New York City than there are in Boston. Google and Facebook both set up engineering offices in New York for that reason.

This is not to say that New York doesn’t have challenges, including high cost of living and competition with a lot of other industries (notably financial services) for talented developers.  But we are seeing the first crop of major companies formed in New York, with Gilt Groupe, Buddy Media, FourSquare, Tumblr, Collective, Huffington Post, AppNexus, etc.  And there are more to come.

With all this said, the only data that matters is investment performance.  The return data chronicling New York’s rise is just coming out now, and as a result many out-of-market funds are setting up shop here (Accel, General Catalyst, etc).  It is way too early to say that New York will displace Boston as the epicenter of east coast venture, but at the moment it is as hot as can be.