Top 15 Cities for Venture Capital

The National Venture Capital Association has ranked the top cities for startup capital investment. Are they what you would have expected? I think Philadelpha & Oakland surprise me with how high they are and I thought Austin & Pittsburgh would be higher, but what do I know? This list is as follows:

1. San Francisco
2. San Jose, Calif.
3. New York
4. Boston
5. Los Angeles
6. Washington, D.C.
7. Seattle
8. Austin, Texas
9. Philadelphia
10.Chicago
11. Oakland
12. Atlanta
13. Pittsburgh
14. Denver
15. Boulder, CO

Comments (36)

 
May 15, 2013 - 11:41am

Denver and Boulder should be combined as it's really one market, particularly since they didn't separate out Menlo Park and Palo Alto from SJ.

 
May 15, 2013 - 1:13pm

I'm a bit surprised Salt Lake didn't make this list.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 
May 16, 2013 - 7:55am

duffmt6:

I'm a bit surprised Salt Lake didn't make this list.

Agreed. Having gone to school in that area, they prided themselves on being known as "silicon slopes"

 
May 16, 2013 - 11:37am

wallmonkey511:

duffmt6:

I'm a bit surprised Salt Lake didn't make this list.

Totally agree. I would've thought for sure it would've come ahead of a few of those...

Colorado and Utah both struggle from a lack of local investors. While both have active startup scenes, access to capital is limited.

 
May 28, 2013 - 5:13pm

orangebull:

I am a total noob but couldn't you consider San Fran, San Jose, and Oakland to be in the same market? I know the list is top 15 cities but top 15 areas make more sense as close cities should have a lot of overlap.

I would. Oakland is feeding off the rise and push in the other areas, particularly b/c it's far more reasonable to run an operation there and gentrification is occurring.

 
May 28, 2013 - 5:16pm

peinvestor2012:

orangebull:

I am a total noob but couldn't you consider San Fran, San Jose, and Oakland to be in the same market? I know the list is top 15 cities but top 15 areas make more sense as close cities should have a lot of overlap.

I would. Oakland is feeding off the rise and push in the other areas, particularly b/c it's far more reasonable to run an operation there and gentrification is occurring.

Should maybe also note that Berkeley is likely lumped into Oakland, as well as a host of well-to-do suburbs with strong access to capital.

“Millionaires don't use astrology, billionaires do”
 
May 15, 2013 - 3:15pm

Possibly. Let them know: http://www.nvca.org/index.php?Itemid=164&id=133&option=com_content&view=article

Commercial Real Estate Developer

 
May 15, 2013 - 4:34pm

CornTrader:

I'm suprised Pittsburgh is so high. What is the driving force there?

Google's presence, CMU, all the healthcare, and the tech startup scene I would assume.

Commercial Real Estate Developer

 
May 16, 2013 - 11:24am

CRE:

CornTrader:

I'm suprised Pittsburgh is so high. What is the driving force there?

Google's presence, CMU, all the healthcare, and the tech startup scene I would assume.

What I've heard is that the Google office is pretty much just a tool to give CMU students internships and get them hired. Having said that, I'm surprised Pittsburgh isn't higher on this list. CMU and the University of Pittsburgh are big driving factors, plus the fact that there are quite a few other high-quality colleges and universities within a few miles of Pittsburgh. Since the steel industry collapse, city leaders have really been pushing technology and innovation, and there are a highly disproportionate number of VC firms and startups for the city's size. A disproportionate number of business heavyweights coming from the city (Tepper, Cuban, etc.) may have something to do with capital availability.

 
May 15, 2013 - 4:48pm

I know people are getting excited about New York / Boston start-up scene, but from an investors perspective, hasn't been fruitful at all so far. When was the last time you heard of a venture-backed company with a billion dollar exit coming from the East coast?

 
May 15, 2013 - 8:30pm

joeiz:

I know people are getting excited about New York / Boston start-up scene, but from an investors perspective, hasn't been fruitful at all so far. When was the last time you heard of a venture-backed company with a billion dollar exit coming from the East coast?

Kayak and Indeed are more or less from NYC.

 
May 16, 2013 - 1:40am

joeiz:

I know people are getting excited about New York / Boston start-up scene, but from an investors perspective, hasn't been fruitful at all so far. When was the last time you heard of a venture-backed company with a billion dollar exit coming from the East coast?


There's less of a consumer focus here and therefore less $1bn valuations thrown around like candy.

In terms of enterprise focused tech companies based on the East Coast, there is Endeca, Demandware, Hubspot (will be $500+ million post IPO), Netezza, off the top of my head. All greater Boston.

When one man, for whatever reason, has an opportunity to lead an extraordinary life, he has no right to keep it to himself.
 
May 16, 2013 - 11:54am

joeiz:

I know people are getting excited about New York / Boston start-up scene, but from an investors perspective, hasn't been fruitful at all so far. When was the last time you heard of a venture-backed company with a billion dollar exit coming from the East coast?

How about Buddy Media? Ok, not a billion dollars, but still a very big exit to a huge player.

 
May 16, 2013 - 2:20am

Sure, a handful of solid companies do exist in the East Coast. I am not debating that. The problem lies in the fact that ~20% of venture dollars are invested in this region, when it nowhere near accounts for that % of returns.

 
May 16, 2013 - 12:00pm

Philly is strong with Drexel and Penn. Ben Franklin Partners is a solid firm, among many others. Being close to NYC both helps and hurts I would imagine.

 
May 16, 2013 - 12:47pm

Chicago is no surprise at all. I am surprised by San Francisco being number one. I would have assumed New York would be number one. I would expect Saint Louis, Missouri, somewhere low on the list, maybe in the top 20.

 
May 16, 2013 - 1:50pm

tap:

Chicago is no surprise at all. I am surprised by San Francisco being number one. I would have assumed New York would be number one. I would expect Saint Louis, Missouri, somewhere low on the list, maybe in the top 20.

Seriously? This is venture capital, not IB/PE/HF/etc. If anything other than SF/Silicon Valley was number 1 I'd be SHOCKED

 
May 16, 2013 - 7:31pm

tap:
I am surprised by San Francisco being number one. I would have assumed New York would be number one.

For VC!? I was partially surprised NYC was even ahead of Boston! This is such a ridiculous notion I couldn't even pick a GIF!



“Millionaires don't use astrology, billionaires do”
 
May 28, 2013 - 5:11pm

alenic:

I'm kind of surprised DC is so far up there. I have not heard of the scene there in great detail and was under the impression Seattle and others were much more developed.

Tons of VC and start-ups in VA (i.e. McLean) and MD (i.e. Bethesda) suburbs. Personally, I think much of it is over-hyped, as someone that experienced some of it first-hand.

 
May 27, 2013 - 10:48am

OP, do you know where the RTP stands on this list? There's a lot of hype in that area about a boom in commerce, so I'm a bit surprised that they're not on there (although I don't know much about the VC market to begin with).

 
Dec 13, 2013 - 3:28am

Haha 14 cities are in the San Francisco Bay Area and #15 is NYC !!

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right." -Warren Buffett
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