Silicon Valley Stays Dominant but Ecosystems Are Rising

Both things are true: Silicon Valley remains dominant in startup funding AND there are more places to "start up" across the US than ever before.

The most common (best?) way to judge startup ecosystems is by total capital invested.

But if you only look at startup ecosystems based on the total capital raised 𝗮𝗰𝗿𝗼𝘀𝘀 𝗮𝗹𝗹 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀, the lists are basically static. Kinda tough for up and coming places to challenge the Bay when a single AI company can raise billions in a day.

Segment the data into startup stages, as in the graphic below, and things become far more interesting.

Data from nearly $100 billion in VC funding raised by companies on Carta since Q1 2024.

𝟭𝟬 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀

• The Bay Area has only 18% share in pre-seed capital (defined as rounds under $2M on SAFEs). But massive 53% share for Series C rounds.

• Miami is well within the top 10 in pre-seed and "seed on SAFEs". This is because young companies raise early rounds and Miami basically only has young companies.

• Chicago does much better in the super early stage than the late stage as well - sleeping giant?

• San Diego outperforms across every stage mostly because it is the quiet home of Biotech outside of Boston and Biotech rounds tend to be quite large.

• People in Seattle should stop downplaying their ecosystem. It's great! It's not the Bay, but it's great.

• Boston is fighting hard for third in the earliest stages but has number 3 on lock for the later ones.

• The seeming randomness of the number 8-15 spots, especially in later stages, points to how precarious startups are generally. It only takes one mega round or massive success to tip an ecosystem into the top 10.

• AI companies are more concentrated in the Bay than anywhere else (and that concentration hasn't slipped much since late 2022). AI companies also raise bigger rounds.

• Some ecosystems start "middle out" (eg mostly seed and Series A funding, then go towards pre-seed, etc). Some start "bottoms up" (pre-seed to seed to A). Kinda just path dependent.

• Late stage mega rounds of the sort that capture headlines will live in the Bay for decades. Other ecosystems have to start smaller.

Share with friends, use in debates, and judge your city based on criteria where progress is actually visible.

Here's to startups 🙏

#startups #fundraising #founders