We’d originally hypothesized that “failure” to raise a subsequent round can happen for one of three reasons: It’s easy to see that, in aggregate, these smaller startup cities significantly underperform both the largest startup hubs and the national average. Taken together, these 34 metropolitan regions (plus the cities that weren’t associated with a metropolitan region in our dataset) account for roughly 25% of the startups that received seed funding between 20. What about the rest of the country? There are plenty of smaller (but still vibrant) startup hubs like Austin, Boulder, and Washington D.C., as well as cities like New Orleans that produced only a couple seed funded startups that, taken individually, didn’t have enough data to make any general claims about their performance. Additionally, Chicago and Seattle are the only major startup hubs where companies that raised their seed rounds between 20 didn’t raise beyond Series C in our dataset. The real surprise here is Seattle startups, the round-by-round survival rate of which falls precipitously relative to the national average. Los Angeles and Chicago are at or near the national average across all rounds, faring slightly better in certain places. What about the slightly smaller startup hubs? Smaller Markets In both New York and San Francisco, the round-to-round survival rate is higher than the national average across all rounds, whereas Boston lags behind the average in earlier stages of the fundraising lifecycle but comes out ahead in rounds following Series C. Wherever the blue line is below the red line, that means the city’s startup survival rate is below the national average. The red line shows the survival rate of all 2,011 companies in our dataset, whereas the blue line shows the survival rates of just the companies from a particular city. Both charts on the left and right display the same data, but use different scales. But what about in terms of round-to-round survival of the startups based in these mega-hubs? Let’s find out. In terms of funding event frequency and dollar volumes, inbound mergers and acquisitions activity, and other factors, these hubs stand head and shoulders above the rest. In previous articles on Mattermark, we’ve established that places like San Francisco, New York City, and Boston dominate America’s startup ecosystem. We’ll take a look at each city’s performance, tie our findings here back to previous coverage of cities we’ve done on Mattermark, and try to figure out what all of this means for entrepreneurs, investors, and civic leaders. 1 In rank order, here are the regions: the San Francisco Bay Area, New York City, Boston, Los Angeles, Seattle, and Chicago. Here, we’ll take the six most-represented metropolitan regions from our original set of 2,011 companies and compare their survival rates against the average. Which of America’s top startup hubs have the highest rates of startup survival on a round-by-round basis? In other words, if, in general, the life of a startup (at least with respect to fundraising) is poor, nasty, brutish, and short, where in particular is it less so? This week, we’re asking the same question, but with a bit of a twist. Several weeks ago, we asked: “ If you had 100 startups that have successfully raised a Seed round, how many of them would go on to raise a Series A? Of those that then raise a Series A, how many go on to raise a Series B? (And so on and so forth.)” (Note: This is not the same as asking “What proportion of startups successfully raise a seed round?”) In breaking news, it turns out there is more than one city in the United States. Tl dr : We find out where your startup is most likely to survive from round to round.
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