Silicon Valley Is Losing Its Edge After Double-Digit Decline in VC Funding Dominance – 5 U.S. Cities Becoming the Fastest-Growing Startup and Innovation Hubs
For many years, Silicon Valley has been synonymous with the startup scene. The area, which generally includes San Francisco-San Jose-Oakland, California, served as a launching point for companies such as Apple Inc., Cisco Systems Inc. and eBay Inc.
Today, Silicon Valley is home to some of the country’s top startups. This includes names such as Wing, Nuro Inc. and Parallel Health. While the region will continue to attract startups and early-stage companies, other cities are becoming well-known as up-and-coming tech hubs.
According to PitchBook’s 2022 US Venture Capital Outlook report, the Bay Area garnered a 22% share of the total venture capital (VC) count in the United States in 2022. This was in line with 2021’s deal count, but a measurable drop from 26% only 10 years ago.
With more VCs spreading their wings outside of Silicon Valley, here are five cities taking full advantage.
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1. Pittsburgh: Go back in time and Pittsburgh was known primarily for its production of steel and iron. Despite its blue-collar roots, Steel City is growing into one of the hottest tech hubs in the United States.
It all started in 2006 when Google opened an office at Carnegie Mellon University. That opened the door to other tech giants, such as Apple Inc., Amazon.com Inc. and Facebook to set up shop in the area.
Today, Pittsburgh is one of the fastest-growing cities for startups, with companies like CleanRobotics calling it home.
2. Atlanta: Atlanta is called the Silicon Peach for a reason. It may not have the same volume of startups as Silicon Valley or its longstanding reputation, but there are a few things that make it one of the country’s top choices among startups.
To start, Atlanta is an affordable city measured both by the cost of living and the cost of operating a business. This is in addition to a large pool of tech talent, thanks in part to the Georgia Institute of Technology’s location in the city.
Mailchimp and Calendly are two of the most well-known companies to launch in Atlanta.
3. Seattle: Seattle VC activity remained strong in 2022, further solidifying its position as a strong alternative to Silicon Valley. There are many reasons for its popularity:
Seattle is home to several large technology companies, including Amazon, Microsoft Corp. and The Boeing Co.
A strong startup community is bolstered by organizations such as Seattle Tech Meetup and the Seattle Angel Conference.
Local and state governments are serious about supporting and incentivizing startups.
When it comes to innovation and entrepreneurship, Seattle is second to none.
4. Chicago: Chicago is home to roughly 6,000 tech companies, making it one of the largest cities for tech employees in the United States. This number includes companies such as Adobe Inc., LinkedIn Corp. and Lyft Inc.
In addition to established companies, Chicago is also doing its part in fostering startups. Some of the things that make it attractive include a flat-rate income tax, a large pool of tech talent and diversity by way of its support such as incentives for women- and minority-owned startups.
5. Miami: As a whole, Florida has become a hotbed for startups, and Miami is the city that’s making the biggest waves.
Miami continues to attract startups, especially in the tech sector, because of its talent pool, local technology centers and multilingual professionals.
Top startups in Miami include MoonPay, Yuga Labs and Pipe.
Summary
Silicon Valley is still king of the startup scene — at least in regard to venture capital investment activity — but other cities are hot on its heels. While it’s a change from the traditional norm, it’s also good news for startups and investors alike.
See Next: Thanks to changes in federal law, everyday investors can now invest in top startups around the country. For example, Miami-based ARKHAUS is a startup using a legal loophole is acquire real estate in some of the most sought after real estate on the market at a fraction of the cost, including some on cities on this list.
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