Start me up: Tech start-ups in the Midwest
In recent years, tech start-ups have made big headlines for massive rounds of funding by venture capitalist firms looking to invest in the next Facebook or Twitter. In a geographic sense, Silicon Valley receives by far the most start-up funding, according to data from PricewaterhouseCoopers and the National Venture Capital Association.
But the Midwest has two metro areas—Chicago and Minneapolis-St. Paul, Minn.—with considerable start-up funding. Comparing the tech start-up financing in these two regions shows that Chicago has a considerable lead over the Twin Cities in an absolute sense, with more than $3 billion in start-up funding from 2010 to 2013, according to local sources in each region (see Chart 1).
However, viewed on a per-capita basis, there is more balance (see Chart 2). While Chicago still holds a considerable edge, Minneapolis-St. Paul has been slowly gaining some momentum in start-up funding over this period. Much of Chicago’s funding in 2011—easily the largest annual gap between the two metros—is also due to a single start-up, when Groupon raised $972 million.