District of Columbia leads with 1 in 326 odds of starting a High-Growth Company. Providence is the city with the worst odds—1 in 3,297.
A High-Growth Company is defined as achieving $2M+ in revenue with 20% annualized growth over a 3-year period. This definition comes from page 10 of the 2017 Kauffman Index of Growth Entrepreneurship.
The data table below shows the odds of starting a High-Growth Company in each major city in America. This data serves as a baseline for the ecosystem innovation fund model that I introduced in Innovation Casino. I am sharing my research notes here so that you can incorporate this data into your angel investing or venture capital models.
United States Metro Area | 1 in X companies High-Growth; X= |
Washington-Arlington-Alexandria | 326 |
Austin-Round Rock-San Marcos | 420 |
Atlanta-Sandy Springs-Marietta | 523 |
Columbus | 631 |
Nashville-Davidson-Murfreesboro-Franklin | 645 |
San Diego-Carlsbad-San Marcos | 674 |
Denver-Aurora-Broomfield | 696 |
Phoenix-Mesa-Glendale | 727 |
Boston-Cambridge-Quincy | 738 |
Cincinnati-Middletown | 780 |
Seattle-Tacoma-Bellevue | 792 |
San Francisco-Oakland-Fremont | 797 |
Orlando-Kissimmee-Sanford | 821 |
Dallas-Fort Worth-Arlington | 828 |
Cleveland-Elyria-Mentor | 840 |
Indianapolis-Carmel | 853 |
Tampa-St. Petersburg-Clearwater | 862 |
Portland-Vancouver-Hillsboro | 871 |
Baltimore-Towson | 890 |
Philadelphia-Camden-Wilmington | 929 |
Kansas City | 978 |
Minneapolis-St. Paul-Bloomington | 980 |
Charlotte-Gastonia-Rock Hill | 995 |
Chicago-Joliet-Naperville | 1,053 |
San Jose-Sunnyvale-Santa Clara | 1,059 |
Los Angeles-Long Beach-Santa Ana | 1,104 |
Houston-Sugar Land-Baytown | 1,158 |
Miami-Fort Lauderdale-Pompano Beach | 1,241 |
United States (total country average) | 1,265 |
Jacksonville | 1,283 |
New York-Northern New Jersey-Long Island | 1,327 |
Virginia Beach-Norfolk-Newport News | 1,399 |
Detroit-Warren-Livonia | 1,480 |
Milwaukee-Waukesha-West Allis | 1,591 |
Sacramento-Arden-Arcade-Roseville | 1,815 |
Las Vegas-Paradise | 2,024 |
St. Louis | 2,101 |
Riverside-San Bernardino-Ontario | 2,283 |
San Antonio-New Braunfels | 2,452 |
Providence-New Bedford-Fall River | 3,297 |
The underlying data for this analysis comes from the field on the Kauffman Index called “High-Growth Company Density.” This field is a measure of how many High-Growth Companies out of every 100,000 companies exist in a metro area. I divided 100,000 by the High-Growth Company Density field to obtain the above values. My research can be found in this Google sheet. I used this research to answer the following questions on Quora:
- What is the best city in the US to start a business?
- What are the pros and cons of using bootstrapping rather than the other types of start-up funding?
- Should voting rights equal equity shares when incorporating a startup?
Sources: Morelix, Arnobio, and Josh Russell-Fritch. 2017 Kauffman Index of Growth Entrepreneurship. Ewing Marion Kauffman Foundation, pp. 10 www.kauffman.org/kauffman-index/reporting/-/media/e37f4200462347dbb0d385e01e656be2.ashx. “Metropolitan Area Rankings.” The Kauffman Index, Ewing Marion Kauffman Foundation, Oct. 2017, www.kauffman.org/kauffman-index/rankings?report=growth&indicator=growth-rate&type=metro