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New Study: California Has More Startup Funding Than Next 3 States Combined

Posted: August 2, 2017 at 5:34 pm   /   by   /   comments (0)

New tech startups have been a hot and glamorous area for many entrepreneurs over the last several years.

Whether you’ve been watching companies grow into the mega-billions like Facebook, Uber, Twitter, or AirBnB, or you’ve always dreamed about creating your own startup, venture capital funding has grown over the years with massive increases across the U.S.

Fundz, a database of recently funded companies, analyzed their records of over 17,459 startup fundings over the last 2 years.  They found that California has more startup fundings than the next 3 states combined! Meanwhile, California is the most famous startup state in the U.S., according to Nevertheless, the second-state-in-the-US-by-startup-fundings, as well as the 3rd one, are not so well-known.

The top 3 cities for tech startup funding across the U.S. are what you might expect: New York, San Francisco, and Boston.  But you might also be surprised to learn that much smaller cities have proportionally enormous amounts of startup funding, including: Austin, Plano and San Mateo.

When we look at all the tech fundings across the U.S., we find that most hotspots for startup funding appear to be coming from The Northeast, California, Chicago, Seattle, Texas, and Boulder.

One of the most interesting findings from the study is that tech startup funding is being led by the health and medical field, including healthcare, biotech, and pharmaceuticals.

Since big cities like New York and San Francisco have more startup funding simply because they have higher populations, the study took another approach: “In order to normalize for the inherent bias towards states with larger populations and big cities, we broke down the numbers and calculated startup funding per person in each state by dividing total money raised by the state’s population.”

As a result, they found that Oklahoma, Massachusetts and Colorado account for the top three states for startup funding dollar amount raised per person.

More interestingly however, consider that Palo Alto is the 7th largest city in terms of startup funding, yet the city’s total population is only a mere 67,000 people!  Home to some of the most enormous tech companies such as Facebook, Google, PayPal, Hewlett Packard, and more, it’s no surprise that this hotbed of highly successful startups has a massive amount of venture capital chasing the next hot investment.

In which states will the next hot startup fundings be happening?  It’s impossible to say, but by the looks of it Texas, New Jersey, and Virginia seem like they will continue to attract startup funding capital.

But technology isn’t the only industry that is showing great potential for startup funding.  “Despite rapid technology growth, traditional industries such as manufacturing and oil & gas are also demonstrating great potential for startups.”

According to John Dukes, founder at Fundz, “While non-tech fundings are bigger in total dollars raised, the number of tech funding deals are certainly outpacing non-tech deals.”

Where do you think the next hot startup city will be in the U.S.?

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