July 8, 2016
When it comes to tech, many will undoubtably tell you that Silicon Valley is the best city to bring your startup to life. And while many major tech companies are stationed in San Francisco, more startups are starting to branch out to other cities across the U.S. In fact, in a report conducted by investment research company Pitchbook, it was found that Silicon Valley isn’t the best city to settle in if you want to get the highest VC return on your startup investment.
While Silicon Valley does have a high number of startups fast growing to the area, Pitchbook’s research found that the number of profitable startups were lower than expected. In fact, cities with smaller number of startups (like New York City and Los Angeles) were found to have a larger number of profitable startups than Silicon Valley.
So, which city in the U.S was found to have the highest number of profitable startups? It turns out that the best city to start your startup is Chicago.
Pitchbook’s research looked at a variety of factors to determine how cities would be considered profitable for startups. They looked at: full exit through acquisition or IPO in the last 10 years; at least $500,000 in VC funding had to be raised before the exit; double checking all funding rounds to verify the total of invested capital and confirming the amount of the exit.
In their findings, Pitchbook writes that: “The results are a bit surprising, with cities like Washington, D.C., and Chicago ranking ahead of the Bay Area and NYC. That said, there are many ways to cut the data that may give alternative results.”
Other cities on the list included: Raleigh, D.C., Philadelphia, and Boston.
Did you like this article?
Get more delivered to your inbox just like it!