Venture Capitols: The Most Popular States for Startup Investors

Over the last two weeks, my colleague Alexis Madrigal has been touring nascent start-up scenes across the Midwest, reporting on entrepreneurs in places like Cleveland and Detroit who are both building companies and, hopefully, urban revivals. 

Ideas and Entrepreneurs on the Leading Edge.
See full coverage

The more ambitious people like that we have around the country, the better off we'll be. But where are America's scrappy tech start-ups really finding success today? When measured in venture capital dollar, mostly in just a few, select places. 

In 2011, according to the National Venture Capital Association's annual report, only four states broke the $1 billion in VC investment: California, Massachusetts, New York, and Texas. Together with fifth place Illinois, they claimed 77 percent of all $28.8 billion dollars of VC dollars invested in the United States. About 51 of that money sloshed around California alone.

Venture_Table_Small.PNG

While investment is still concentrated today, it is beginning to spread around a bit. According to the NVCA, companies received venture capital infusions in a record 46 states (47, if you include the District of Columbia). Only Wyoming, Alaska, Arkansas, and Mississippi were left out. 

Venture_Map_Dollars.PNG

Some states are bound to end up as the destination for more VC funding simply because they have larger overall economies. So to create a measure of which parts of the country were the most start-up-oriented,* I looked at total VC funding as a percentage of state GDP. Massachusetts and California still top the list, with total VC investments reaching nearly a full percentage point of GDP, but they're joined by smaller tech hubs such Utah, Colorado, and Washington. Perhaps the most surprising member of the top 10: New Hampshire, where 16 companies pulled in $96 million total in VC funding last year. 

Venture_Capitols_2.PNG

Only 13 states received VC investment equal to 0.1% of their GDP or more. So we're not quite a startup nation yet -- but perhaps we're becoming more of one. 

_______________________________

*Again, I'm talking specifically about the sorts of cutting-edge start-ups with the potential to scale up that VC investors are interested in, not new small businesses, which I've discussed in previous posts. 

Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

The Blacksmith: A Short Film About Art Forged From Metal

"I'm exploiting the maximum of what you can ask a piece of metal to do."

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

Video

The Rise of the Cat Tattoo

How a Brooklyn tattoo artist popularized the "cattoo"

More in Business

Just In