10 Top Cities for Tech Startups

1. San Francisco, Calif.

Number 1 on our list is the San Francisco Bay area. A number of big-time companies grew their roots here with the help of a vibrant startup community–Pandora and Craigslist, for example. “The City of San Fran has become a lot more attractive to the IT startups due to young people wanting to live in [such] a vibrant city. These days it costs less money to create an IT business with the accompanying infrastructure so you can afford to do it in the city and not have to schlep into the valley and be a part of a bigger operation,” says Heesen.

No. of Deals: 495
No. of Startups: 431
Sum of Equity Invested (USD millions): 4,243.52

2. San Jose, Calif.

The birthplace of countless Internet startup companies, Silicon Valley has been and continues to be a dominant force in the tech market. It has a strong and robust IT start-up community. Many big players in IT like PayPal, Facebook and Google call this area home. Between the major players in IT and the VC community, it’s rife with talent, entrepreneurs, and venture capital money.

No. of Deals: 327
No. of Startups: 276
Sum of Equity Invested (USD millions): 3,251.12

3. New York, NY

Mayor Michael Bloomberg has made great strides in making NYC attractive to the media and entertainment industries. Coming in at No. 3 NYC has it all and is fast becoming a top market and IT hub for these industries. “Bloomberg has gone full-throttle to attract entrepreneurial companies to his city,” says Heesen. He’s rolled out the red carpet to make it amenable to entrepreneurs to live and work in the city. Being close to the major media conglomerates on Madison Avenue helps make these small agile companies successful. It’s a city that’s really come into its own as a result of leadership, according to Heesen.

No. of Deals: 271
No. of Startups: 238
Sum of Equity Invested (USD millions): 1,640.65

4. Boston, Mass.

Boston, a traditional venture capital hub, is seeing a lot of growth in healthcare, which is good for HIT startups. HIT is a growing sector, since the recent Supreme Court decision on healthcare. Up to that point, many companies were waiting on the sideline to see how recent healthcare legislation would pan out. On the IT side, Boston continues to be an important player in the VC markets. With its proximity to the prestigious MIT, many of the startups located here are created by MIT graduates who wanted to stay in the New England area, according to the NVCA.

No. of Deals: 212
No. of Startups: 179
Sum of Equity Invested (USD millions): 1,335.90

5. Los Angeles, Calif.

Not normally known as being a hotbed for IT venture capital, one area has really begun to heat things up. You guessed it: the media and entertainment industry. Like New York City, the LA/Long Beach area has become an IT hub for media and entertainment, making it sizzle for startups that operate in these avenues.

No. of Deals: 150
No. of Startups: 121
Sum of Equity Invested (USD millions): 754.88

6. Washington D.C.

D.C. and the surrounding metro area are home to the federal government and this drives a lot of the trends in this busy market. The VC market is heavily connected to the government, specifically the department of homeland security and defense industry, according to the NVCA. “Many small IT companies have been sprouting up in the DC region due to the federal government presence and the strong interest in security,” says Heesen.

No. of Deals: 92
No. of Startups: 79
Sum of Equity Invested (USD millions): 397.00

7. Seattle, Wash.

Hi-Tech companies like Microsoft and others are headquartered in this region and the NVCA has seen a large number of entrepreneurs come out of some great companies based here. “There has been a maturation of that market as folks leave these venture-backed large companies and go off to create their own,” says Heesen. Many of the startup companies created here are acquired by the same large companies that the founders left.

No. of Deals: 82
No. of Startups: 69
Sum of Equity Invested (USD millions): 671.43

8. Austin, Texas

Austin has a robust and thriving startup market. According to NVCA stats, Austin has seen its share of successful startups, like RetailMeNot and NetSpend. A strong university, a vibrant young crowd and a beautiful backdrop are the driving forces behind this trending market. “It has a vibe and community that is very conducive to start-ups,” says Heesen.

No. of Deals: 64
No. of Startups: 53
Sum of Equity Invested (USD millions): 475.51

9. Philadelphia, Pa.

The City of Brotherly Love clocks in at No. 9 on our list. Philly is another city within Pennsylvania where many startups have used state programs to get their companies moving forward. It’s also home to several top-notch schools like Wharton, Drexel and others making it a good place to find talent.

No. of Deals: 61
No. of Startups: 55
Sum of Equity Invested (USD millions): 140.98

10. Chicago, Ill.

Chicago, while not typically considered a high tech hub, has been gaining a lot of traction thanks in part to businesses like Groupon and Orbitz. “Groupon has been a major player in that city. It’s spurred a lot of entrepreneurial activity,” says Heesen. Chicago also boasts a lower cost of living and working than many other large cities. It is home to a number of other startups like cars.com and grubhub, to name a few. BuiltinChicago.org says there is a new startup here every 48 hours.

No. of Deals: 56
No. of Startups: 53
Sum of Equity Invested (USD millions): 330.71

Source:cio.com