New US leaderboard: most funding by metro area for pre-seed startups
Lots of talk these days about the best location for startups across the US, driven by a recent WSJ article and the consistent slap-fights among various city proponents on X.
I love a good list! But one of the issues with a broad look at all VC cash is that it obscures the timescale problem.
In order to climb in the broad rankings, you need late-stage companies because late-stage companies raise the big rounds. But if your ecosystem is younger, it's unlikely to have many late-stage companies.
So we can use Carta data (and I think no one else has even close to this level of information) to drill down to the earliest funding on SAFEs and Convertible Notes. Is any place challenging the Bay Area hegemony for early startups?
Nope.
Important note: here we are using the term "pre-seed" rather broadly. This includes all funding on SAFEs or Convertible Notes before any priced round. Many of the rounds included would be "seed on SAFEs" or other such names.
𝗢𝘁𝗵𝗲𝗿 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀
Bay Area (combined SF and San Jose MSAs) comes in first since 2020 with 30% share and nearly $4 billion invested.
Bay Area share actually climbed in 2023 to 34%, as it was the only major market in the top 7 to grow total investment from 2022.
Miami, the most-debated metro, does better in this analysis than in a broad VC view. 3% share since 2020 vs a 1.7% share in broad VC funding. This makes sense! If an ecosystem is going to change, it will start with the earliest part of the market.
Massive booms in pre-seed funding from 2020 to 2021. Some of this is due to our platform making it easier to create and sign SAFEs, but most is just the startup sugar high from that year.
Interesting to see Boston fall to 4th in this list behind both NYC and LA. Probably has to due a little bit with the industry mix being tilted towards biotech and hard sciences which move into named venture rounds quickly.
The next question for us to answer - where is this money coming from? Are startups primarily taking investment from local capital or are the funders still in the mature ecosystems?
But open to your thoughts on next questions as well!
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#cartadata #preseed #startups #founders #SAFEs
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