There are three major areas for venture capital investment in the U.S.: California, New York, and Massachusetts. Silicon Valley is by far the dominant center of entrepreneurial activity and as a result many entrepreneurs believe they need to be there to take advantage of the talent and ecosystem that has developed over decades. Facebook famously moved from Cambridge to Silicon Valley; Y-Combinator closed it’s East Coast operations to concentrate solely on Silicon Valley.
But the article in Inc. Why Middle America Can Be Better for Entrepreneurs Than Silicon Valley by venture capitalist Cindy Padnos makes a persuasive case that there are viable alternatives to Silicon Valley that in fact may be advantageous from entrepreneurs.d
She makes a strong case for Pittsburgh as one area entrepreneurs should explore:
Pittsburgh tops our list because what’s happening there best reflects the growth and acceleration of a more supportive climate for entrepreneurs throughout our nation.
The city boasts ten universities (including two of the top 50 research universities in the US and a top-10 ranked business school). It houses the federally funded Software Engineering Institute for research and development and the Super Computer Center.
Its capabilities in robotics and entertainment technologies have led to major financing events–like Ford’s recent billion-dollar commitment to a local tech startup.
With the ninth-most Fortune 500 companies in the country, the local community has shown its commitment to growth through knowledge-economy jobs, attracting companies like Google, SAP, and Autodesk to build teams there. Reflective of this ripe ecosystem is a 19 percent annual growth rate for new VC-backed start-ups in the region.
There are many other areas with well developed entrepreneurial infrastructure, including: Austin, Texas and Boulder, Colorado. The prime ingredients are one) a university or universities that can provide talent for startups and two) angel investors and venture capitalists who can invest in and guide the development of new companies.
The battle for talent as well as capital and support (professional services, office space, etc.) is fierce in Silicon Valley. So if you are mobile, look at moving your startup to a city between the coasts. Check out TechStars programs – an international accelerator and investor – and see what cities they are operating in, including Atlanta, Chicago. and Kansas City.
Another way of entrepreneurial-friendly locations is checking out the National Venture Capital Associations regional groups.
So if you are willing and able to locate your first efforts in market research should go into where to best locate your venture. Of course, if you already have good connections to the entrepreneurial network where you are that may well be the best place to start up.